With smart contracts’ rapid growth, IT leaders should understand the role those contracts could play within an enterprise technology ecosystem. Smart contracts on blockchain have the potential to streamline certain business processes and some business and IT leaders are looking at the potential use cases, such as in the area of advertising and healthcare. But smart contracts also have downsides, including scalability and security issues, so leaders need to weigh the advantages against the drawbacks. A smart contract is a self-executing program based on if-then logic. For example, vending machines are a ubiquitous presence in everyday life. It’s also a simple model of a smart contract: If someone inserts $2 and then presses B4, then the machine dispenses the package of cookies held in the B4 slot. In other words, if the vending machine receives the required item of value, it performs the requested action. Smart contracts can run on various architectures, such as distributed ledger technology and blockchain. In the latter case, the program is stored on a blockchain and executes when specific conditions trigger the next action. For example, a service could trigger a payment or service delivery. Smart contracts are one of the most popular blockchain use cases, and for many, the term smart contract connotes smart contracts on the blockchain.
Read more : 10 examples of smart contracts on blockchain.
