Smart Contracts: will they defeat the lawyers?
What kind of sandwich you got? I give you a cookie for a piece of it. Without knowing it, since we were little, we were signing contracts and doing agreements with our classmates.
If we look back, there were contracts that determined the course of the history. Secret agreements that led to historical sales or alliances that broke all of the above. In short, we live surrounded by contracts.
Due to the technological revolution, a new way of understanding these agreements, known as Smart Contracts, appears. If you have heard about them but still have doubts about what they are, keep reading.
Contracts free of intermediaries
A Smart Contract works by its own, without the need of intermediaries. Again, the blockchain technology is involved in this. Thanks to the blockchain, this system, which automates agreements between people or machines without the participation of third parties, has been implemented.
In these types of agreements, computers play a key role. Besides electronically treasuring documents or making e-signatures, they can manage everything by themselves.
The oracle’s power
The oracle has never had so much influence. The oracles are programs that verify all the information on the internet. In this way, these systems manage to keep the contracts updated. But is there any limitation? No. An oracle can confirm that anything is included in the Smart Contract.
Currently, one of the main challenges related to these programs is to achieve their decentralization and link the legal universe with the technological.
Therefore, Smart Contracts favor businesses without resorting to intermediaries. This powerful software can automate much of the process. Meanwhile, the blockchain guarantees that this step is transparent without a doubt.
The challenge goes beyond transferring the legal language to the computer network, but advancing the legality of these contracts. In short, achieving the standardization of the industry.
This type of agreements forces both parties to provide a blockchain address in which the funds will be deposited for the fulfillment of the contract.
This fact strengthen each part fulfillment of the contract. Otherwise, these funds will disappear. This type of procedures have been followed in some markets. Bithalo and Blackhalo are examples of it.
What are Smart Contracts for?
We have to keep in mind that as well as platforms like Ethereum and the blockchain technology, Smart Contracts are innovative agreements. So, their current uses aren’t even half of what they may be in the future.
These contracts may be used virtually in all the areas. The benefits are marvellous. The autonomy of these agreements characterizes them and the costs are reduced. Likewise, all contracts are in the blockchain, which means transparency and trust. In addition, the speed and security of the processes increases considerably. Thanks to this technology, new business models are emerging.
These could be in the future some of the possible uses of the Smart Contracts:
- Financial sector: loans, bonus compensation, microinsurance and inheritance.
- Health sector: records and health monitoring.
- Energy sector: autonomous vehicle charging stations.
- Public sector: votes and bets.
The future of the legal profession
The reality is that these Smart Contracts will allow to close business between strangers in a reliable way and without a third person. That’s the reason why the role of advocacy could change.
It’s important to know that Smart Contracts are an evolution of the legal system, the don’t pretend to modify it at the point to not recognize it. Lawyers could focus on creating Smart Contracts templates. Change or die.
OneUP stands for technology
Our team is working on implementing these types of agreements. Smart Contracts are the future. Cost and time savings put contracts on the ropes.
Written by OneUP Team
OneUP team is working and growing everyday to offer you the best content and to keep you updated.