Advantages and disadvantages of a smart contract
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
- 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 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.