Published 15 October 2018

Advantages and disadvantages of a smart contract

What is a smart contract and examples of its use

What is a smart contract and examples of its use

Smart contract is a self-executable code that has a broad purpose, one of which is automation of payment operations in the performance of contractual obligations.

Examples of use:

  • ICO organization;
  • Payment transactions;
  • Betting, gambling;
  • Purchase of a real estate object;
  • Cryptocurrency exchange;
  • Insurance services;
  • Unmanned taxi;
  • Medicine, access to information about patients;
  • Organization of voting.

Features of smart contracts

Features of smart contracts

  • multiple conclusion and execution of the transaction in automatic mode by means of the program code;
  • payment by electronic money;
  • reduced staff costs, no need for a lawyer, contract manager.
  • secure asset exchange.

Advantages and disadvantages of smart contracts, their limitations

Advantages and disadvantages of smart contracts, their limitations

Advantages of smart contracts

  • absence of third parties, carrying out of transactions without intermediaries, who can act as guarantors;
  • minimum commissions - when performing smart contracts, the transaction fee is minimal.
  • security and privacy, the terms of the transaction are encrypted and stored in blockchain, it is impossible to change the terms and make changes to the smart contract;
  • Instant asset exchange, transactions are performed automatically when the terms of the transaction are met.

Disadvantages of smart contracts

  • possible errors, incorrect operation of the smart contract as a result of errors in the program code;

Limitations of smart contracts

  • a smart contract is limited by the capabilities of the platform on which it is executed.
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