DASCOIN SMART CONTRACT

What is a Smart Contract ?

A general definition of a smart contract is a computer programme that can automatically execute the terms of a contract. They extend the utility of blockchains from simply keeping a record of financial transaction entries to automatically implementing terms of multiparty agreements. A smart contract can be encoded on any blockchain.

Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way, while avoiding the services of a middleman.

The best way to describe smart contracts is to compare the technology to a vending machine. Ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop a bitcoin into the vending machine (i.e. ledger), and your escrow, driver’s license, or whatever drops into your account. More so, smart contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations.

Example

Suppose you rent an apartment from me. You can do this through the blockchain by paying in cryptocurrency. You get a receipt which is held in our virtual contract; I give you the digital entry key which comes to you by a specified date. If the key doesn’t come on time, the blockchain releases a refund. If I send the key before the rental date, the function holds it releasing both the fee and key to you and me respectively when the date arrives. The system works on the If-Then premise and is witnessed by hundreds of people, so you can expect a faultless delivery. If I give you the key, I’m sure to be paid. If you send a certain amount in bitcoins, you receive the key. The document is automatically cancelled after the time, and the code cannot be interfered by either of us without the other knowing, since all participants are simultaneously alerted.

You can use smart contracts for all sort of situations that range from financial derivatives to insurance premiums, breach contracts, property law, credit enforcement, financial services, legal processes and crowd funding agreements.

Difference between traditional contracts and smart contracts:

Smart Contracts Use Cases/ Applications :

Blockchain based smart contracts offer many benefits for a wide range of applications.

Decentralised process of execution eliminates the risk of manipulation, since execution is managed automatically by the whole network, rather than an individual party.

Autonomy – You’re the one making the agreement; there’s no need to rely on a broker, lawyer or other intermediaries to confirm. Incidentally, this also knocks out the danger of manipulation by a third party, since execution is managed automatically by the network, rather than by one or more, possibly biased, individuals who may err. Smart contracts reduce or in some cases can completely eliminate reliance on third-party intermediaries that provide ‘trust’ services such as escrow between counterparties.

Trust – Your documents are encrypted on a shared ledger. There’s no way that someone can say they lost it.

Backup – Imagine if your bank lost your savings account. On the blockchain, each and every one of your friends has your back. Your documents are duplicated many times over.

Safety – Cryptography, the encryption of websites, keeps your documents safe. There is no hacking. In fact, it would take an abnormally smart hacker to crack the code and infiltrate.

Speed – You’d ordinarily have to spend chunks of time and paperwork to manually process documents. Smart contracts use software code to automate tasks, thereby shaving hours off a range of business processes.

Savings – Smart contracts save you money since they knock out the presence of an intermediary. You would, for instance, have to pay a notary to witness your transaction.

Accuracy – Automated contracts are not only faster and cheaper but also avoid the errors that come from manually filling out heaps of forms.

• Lower cost

Less human intervention results in reduced costs.

• New business models

Smart contracts, through their lower costs for ensuring reliable transactions, enable new kinds of businesses like automated access to vehicles and storage units. This can be in conjunction with other emerging IT trends like IoT and Deep learning.

And also many more such as the following:

Real Estate

You can get more money through smart contracts. Ordinarily, if you wanted to rent your apartment to someone, you’d need to pay a middleman such as Craigslist or a newspaper to advertise and then again you’d need to pay someone to confirm that the person paid rent and followed through. The ledger cuts your costs. All you do is pay via bitcoin and encode your contract on the ledger. Everyone sees, and you accomplish automatic fulfillment. Brokers, real estate agents, hard money lenders, and anyone associated with the property game can profit.

Healthcare

Personal health records could be encoded and stored on the blockchain with a private key which would grant access only to specific individuals. The same strategy could be used to ensure that research is conducted via HIPAA laws (in a secure and confidential way). Receipts of surgeries could be stored on a blockchain and automatically sent to insurance providers as proof-of-delivery. The ledger, too, could be used for general health care management, such as supervising drugs, regulation compliance, testing results, and managing healthcare supplies.

Digital Identity

Smart contracts can allow individuals to own and control their digital identity containing data, reputation and digital assets. It permits individuals to decide what data to disclose to counterparties, providing enterprises the opportunity to seamlessly know their customers. Ledger protected e-voting as well.

Counterparties will not have to hold sensitive data to verify transactions. This reduces liability while facilitating frictionless know-your-customer requirements. It also increases compliance, resiliency and interoperability.

Records

Smart contracts can digitize the Uniform Commercial Code (UCC) filing

and automate their renewal and release processes. They can also atomically perfect a lender’s security interest loan creation.

They can automate compliance with rules that require destroying records at a future date. They also make possible UCC liens that auto-release, auto-renew or automatically request collateral. In performing such functions, smart contracts reduce legal costs.

Securities

Smart contracts can simplify capitalization table management. They also circumvent intermediaries in the chain of securities custody and facilitate the automatic payment of dividends, stock splits and liability management, while reducing operational risks.

With securities on a distributed ledger, smart contracts digitize work flows.

There are considerations with securities.

The cryptographic signature of the State of Delaware can require enabling legislation to clarify that Delaware corporate law permits registration on a distributed ledger.

While issuers will welcome visibility into who owns their securities, some buy-side firms protect this information.

Trade Finance

Smart contracts can streamline international transfers of goods via fast Letter of Credit and trade payment initiation, while enabling a greater liquidity of financial assets.

They can also improve financing efficiencies for buyers, suppliers and institutions.

There are trade finance considerations. Industry standards for smart contract procedures are needed for wider acceptability.

The legal implications in case of an execution fall-out has to be determined, particularly in the cases of disputes and defaults.

The integration of settlement systems, technology requirements and off-chain ecosystems are important to success.

Derivatives

Smart contracts can streamline post-trade processes, removing duplicative processes executed by each counterparty for verifying trades and conducting appropriate trade events. They enable a standard set of contract conditions and optimize post-trade processing of over-the-counter derivatives. They also enable real-time valuation of positions for monitoring and reducing errors.

When considering derivative smart contracts, it is important to address protocol changes related to regulatory reform.

Financial Data Recording

Financial organizations can utilize smart contracts for accurate, transparent financial data recording. Smart contracts allow for uniform financial data across organizations, improving financial reporting and reducing auditing costs.

By improving data integrity, smart contracts support increased market stability. They also reduce accounting costs by allowing cost sharing among organizations.

Interoperability among the distributed ledger network and legacy systems is important in financial reporting.

Mortgages

Smart contracts can automate mortgage contracts by automatically connecting the parties, providing for a frictionless and less error-prone process. The smart contract can automatically process payment and release liens from land records when the loan is paid.

They can also improve record visibility for all parties and facilitate payment tracking and verification. They reduce errors and costs associated with manual processes.

Digital identity is a key requirement.

Land Title Recording

Smart contracts that facilitate property transfers can deter fraud, improve transaction transparency and efficiency, and strengthen confidence in identity. They also reduce auditing costs.

Common protocols need to be developed for electronic record filing.

Supply Chain

Smart contracts can provide real-time visibility for every step in a supply chain. Internet of Things devices can record each step as a product moves from a factory floor to the store shelves.

They facilitate granular-level inventory tracking, benefitting supply chain financing, insurance and risk. Such enhanced tracing and verification reduce the risk of theft and fraud.

The identities of supply chain players have to be attested over time, including companies, institutions, individuals, sensors, facilities and products.

Auto Insurance

There’s no doubt that we’re progressing from slothful pre-human vertebrates to super-smart robots. Think of a future where everything is automated. Google’s getting there with smart phones, smart glasses, and even smart cars. That’s where smart contracts helps. One example is the self-autonomous or self-parking vehicles, where smart contracts could put into play a sort of ‘oracle’ that could detect who was at fault in a crash; the sensor or the driver, as well as countless other variables. Using smart contracts, an automobile insurance company could charge rates differently based on where, and under which, conditions customers are operating their vehicles.

Smart contracts can improve the disjointed car insurance process. A smart contract can record the policy, driving record and driver reports, allowing Internet of Things-equipped vehicles to execute claims shortly after an accident.

They automate claims processing, verification and payment. Each policy holder’s repository includes driving record, vehicle and accident report history. Eliminating duplicated reporting will yield savings.

Cross-industry collaboration is needed to address technological, regulatory and financial challenges.

Clinical Trials

Smart contracts can improve clinical trials through increased cross-institutional visibility. Privacy-preserving computation improves data sharing between institutions while automating patient data.

They can streamline processes for trials, improve access to cross-institution data, and can increase confidence in patient privacy.

Authentication, authorization and identity remain open issues for smart contracts executed on blockchain-enabled networks.

Cancer Research

Smart contracts can facilitate the sharing of cancer data. They can facilitate the patient consent management process and aggregate data contribution and data sharing while protecting patient privacy.

New forms of blockchain technologies may be needed to provide real-time access and protection of data confidentiality.