What is The Blockchain
Blockchain is a record keeping technology that is a digital system for recording transactions and related data in multiple places at once. Instead of using traditional methods of storing data, such as in rows or columns, the data is stored in blocks and is decentralized. This means that every participant on the network has access to the data. Because of this, blockchain creates greater security and transparency for transactions. Every transaction may only be recorded once, and any changes to the transaction must be recorded as new, for everyone on the network to see. Blockchain is designed to be nearly impossible to hack. Each record is chained to each other, meaning the hacker would have to hack every part of the chain, and not just one piece of information.
Smart Contracts
There are many ways in which blockchain technology is changing how the world conducts business. One way is the implementation of “Smart Contracts” into everyday business. Smart contracts are programs that are stored on a blockchain that run when predetermined conditions are met. They work by following simple “if/when… than” statements. A simple example would be, If A releases funds to B, then B will automatically authorize the shipment of a product to A. Smart contracts are completely self-executing and are typically used to automate the execution of an agreement so that all participants can be completely certain of the outcome, without any involvement from a third party.
There are many reasons to implement smart contracts into your business. For starters, it increases the speed, efficiency, and the accuracy of the deal, because there is no time spent filing, no human error, and no paperwork. There is much greater transparency and trust because encrypted records are shared amongst participants. Just like other things on a blockchain, it cannot be altered. If there is an error, a new transaction must be added to correct the error, and all of it is visible to both parties. It is also a huge money saver because you can save time where you would have been billed by someone to execute the agreement.
Some common industries that smart contracts are being utilized are trade and finance, real estate, and most notably, massive corporations are using smart contracts to better track and stay updated on products moving through the supply chain. At Jolley Law Group, we want to keep you updated on the lasted technology for your business. Contact us with any questions you have regarding contracts.
