If you’re an investor or even just an observer of the crypto world, you might have heard of smart contracts numerous times. In our earlier blogs, we explained the concept and meaning of smart contracts and how they work.
But the question arises – are there any real-world use case of smart contracts beyond the domain of crypto? It’s the question often being raised by crypto skeptics. So, today, we’ll have a look at the real-world use case of smart contracts and how they’re changing the world one sector at a time.
Since it’s an established fact that smart contracts have changed the way we deal with financial instruments with the exponential growth of DeFi (Decentralized Finance) built on blockchains with smart contracts facility. Let’s have a look at the use-cases of smart contracts beyond the scope of finance.
Before we proceed further, let’s revise the concept of smart contracts and understand what are smart contracts once again.
What are Smart Contracts?
By definition, smart contracts are self-executing computer code that carries a set of instructions and are written and verified on a blockchain. In simple language, smart contracts are similar to real-world contracts but stored digitally.
Anyone with an understanding of blockchain development can build a smart contract and once the smart contract is deployed, it is available for everyone to interact with it and it executes without any human intervention when its predefined conditions are met.
To understand the working of smart contracts and how they interact with the real world, check out our blog – Smart Contracts & Oracle Networks Explained.
Now, let’s have a look at the real-world use case of smart contracts.
Top 3 Real-World Use Cases of Smart Contracts
Governance
Gone are the days when a platform can make major changes without consulting its users and go ahead with it. It’s time for a governance model that takes input from all the stakeholders. In web 2.0 where the corporations own the platform and talk about “users” and “viewers” being “acquired” is a thing of the past.
It’s a brave new world and smart contracts are facilitating a new governance model with the rise of web 3.0 where we instead talk about “owners” and “members” who “join” and “participate.”Smart contracts are the backbone of these new governance models and hopefully, we’ll see these new models in the real world too.
A new ecosystem and a new world built around purposeful action.
Real Estate
Not only the digital world, smart contracts, and tokenization are also changing the way we deal with real estate transactions. Thus enabling fractionalized ownership and lowering the barrier to entry for investment.
Smart contracts are reworking the complete transaction process with new blockchain-based land registry models while getting rid of greedy rent-seekers and value-leaching intermediaries adding additional fees through broke fees, title transfer fees, and whatnot.
Digital Identity
With smart contracts and zero-knowledge proofs, the world is going to change faster than we can anticipate. Individual identity is our biggest and most important asset that often ends up in hands of malicious actors or being sold through multiple parties, thanks to large tech monopolies holding all the power.
Well, not anymore. With new emerging technological solutions built on top of zero-knowledge proofs and smart contracts, we’ll soon be able to take the power back from big corporations and deal with decentralized identity solutions.
Besides, these top three real-world use cases, we’ll be seeing many more use-cases of smart contracts in our daily lives. Supply chain management, insurance, financial data recording, loans & mortgages, escrow, clinical trials, and many more use cases are building as we speak.