Smart contracts have elevated in importance across many industries since 2020. Smart contracts are programs stored on a blockchain that activate when predetermined conditions are met. They are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without the involvement of intermediaries. This makes the technology efficient and easily adaptable to global trade. For many industries, smart contracts have become a real solution to questions that had plagued businesses in regards to security, trust, transparency, and action.
Blockchain technology promises to deliver security using immutable records. Applied optimally, blockchain is helping businesses reduce costs, enhance processes, track customer data, ensure product safety, and protect companies and customers against fraud and counterfeiting. When applied, blockchain is streamlining business processes, improving transparency, and boosting the power of digital technology.
In the coming year, it is expected that more businesses will adopt blockchain technology. It will be used in many industries such as banking, real estate, logistics, manufacturing, and healthcare. The technology is used to:
- secure sharing of medical data
- on cryptocurrency exchange
- as voting mechanism
- track anti-money laundering tracking system
- monitor real-time IoT operating systems
- analyze advertising insights
- track music royalties
- manage cross-border payments
- provide personal identity security
- monitor supply chain and logistics
- manage original content
- processing real estate documentation
The Top 5 Trends
Decentralized Finance (DeFi): DeFi is the term given to the shift away from traditional, centralized financial systems, controlled by governments on national levels and conglomerates and large companies on international fronts. The decentralized systems, such as brokerages, exchanges, and banks, utilize smart contracts on blockchains.
Central Bank Digital Currency (CBDC): CBDCs are digital currencies issued by a central bank and based on blockchain. This legal tender, created by governments and backed by a central bank, is a type of cryptocurrency. Many CBDC pilot projects are ongoing around the world, including China, India, and Ecuador. China is looking to go one further, making virtual currency the natural replacement of paper currency. Earlier this year, the Indian government released its National Blockchain Strategy and is discussing a bill to launch a national digital currency.
Blockchain-as-a-Service (BaaS): BaaS is the third-party creation and management of cloud-based networks for companies that build blockchain applications. BaaS – based on the software as a service model – gives clients access to cloud-based solutions to build, host, and operate blockchain apps. BaaS is a fast-growing industry that is promising to provide value-adding services for businesses to access blockchain technology without massive outlays, the same way SaaS has done.
Verifiable Credential & Self-Sovereign Identity (VC & SSI)(Universal Identity): SSI offers verifiable, globally resolvable, and privacy-preserving credentials that are stored and managed from personal devices. The ID credentials stored on a blockchain can be accessed by the person who owns the device and the ID, which is immutable and stored on a blockchain. While the system poses some questions about personal security and the right to anonymity, it seems likely that blockchain technology will be used to secure personal details for personal identification purposes so people can claim benefits, open a bank account, request a loan, apply for insurance, access healthcare services and more.
Non-Fungible Tokens (NFT): A NFT is a cryptographically generated token issued via blockchain technology that links an item with a unique digital signature. NFT will give artists, writers, content creators, musicians, and other creatives a way to ensure that their work can be securely registered so that any plagiarism can easily be proven according to detail stored on the blockchain and verified by hash.
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