The original concept behind the invention of blockchain technology is still a great application. Money transfers using blockchain can be less expensive and faster than using existing money transfer services. This is especially true of cross-border transactions, which are often slow and expensive. Even in the modern U.S. financial system, money transfers between accounts can take days, while a blockchain transaction takes minutes.

2. Financial exchanges

Many companies have popped up over the past few years offering decentralized cryptocurrency exchanges. Using blockchain for exchanges allows for faster and less expensive transactions. Moreover, a decentralized exchange doesn’t require investors to deposit their assets with the centralized authority, which means they maintain greater control and security. While blockchain-based exchanges primarily deal in cryptocurrency, the concept could be applied to more traditional investments as well.

3. Lending

Lenders can use blockchain to execute collateralized loans through smart contracts. Smart contracts built on the blockchain allow certain events to automatically trigger things like a service payment, a margin call, full repayment of the loan, and release of collateral. As a result, loan processing is faster and less expensive, and lenders can offer better rates.

4. Insurance

Using smart contracts on a blockchain can provide greater transparency for customers and insurance providers. Recording all claims on a blockchain would keep customers from making duplicate claims for the same event. Furthermore, using smart contracts can speed up the process for claimants to receive payments.

5. Real estate

Real estate transactions require a ton of paperwork to verify financial information and ownership and then transfer deeds and titles to new owners. Using blockchain technology to record real estate transactions can provide a more secure and accessible means of verifying and transferring ownership. That can speed up transactions, reduce paperwork, and save money.

6. Secure personal information

Keeping data such as your Social Security number, date of birth, and other identifying information on a public ledger (e.g., a blockchain) may actually be more secure than current systems more susceptible to hacks. Blockchain technology can be used to secure access to identifying information while improving access for those who need it in industries such as travel, healthcare, finance, and education.

7. Voting

If personally identifiable information is held on a blockchain, that puts us just one step away from also being able to vote using blockchain technology. Using blockchain technology can make sure that nobody votes twice, only eligible voters are able to vote, and votes cannot be tampered with. What’s more, it can increase access to voting by making it as simple as pressing a few buttons on your smartphone. At the same time, the cost of running an election would substantially decrease.

8. Government benefits

Another way to use digital identities stored on a blockchain is for the administration of government benefits such as welfare programs, Social Security, and Medicare. Using blockchain technology could reduce fraud and the costs of operations. Meanwhile, beneficiaries can receive funds more quickly through digital disbursement on the blockchain.

9. Securely share medical information

Keeping medical records on a blockchain can allow doctors and medical professionals to obtain accurate and up-to-date information on their patients. That can ensure that patients seeing multiple doctors get the best care possible. It can also speed up the system for pulling medical records, allowing for more timely treatment in some cases. And, if insurance information is held in the database, doctors can easily verify whether a patient is insured and their treatment is covered.

10. Artist royalties

Using blockchain technology to track music and film files distributed over the internet can make sure that artists are paid for their work. Since blockchain technology was invented to ensure the same file doesn’t exist in more than one place, it can be used to help reduce piracy. What’s more, using a blockchain to track playbacks on streaming services and a smart contract to distribute payments can provide greater transparency and the assurance that artists receive the money they’re owed.

11. Non-fungible tokens

Non-fungible tokens, or NFTs, are commonly thought of as ways to own the rights to digital art. Since the blockchain prevents data from existing in two places, putting an NFT on the blockchain guarantees that only a single copy of a piece of digital art exists. That can make it like investing in physical art but without the drawbacks of storage and maintenance.

NFTs can have varied applications, and ultimately they’re a way to convey ownership of anything that can be represented by data. That could be the deed to a house, the broadcast rights to a video, or an event ticket. Anything remotely unique could be an NFT.

12. Logistics and supply chain tracking

Using blockchain technology to track items as they move through a logistics or supply chain network can provide several advantages. First of all, it provides greater ease of communication between partners since data is available on a secure public ledger. Second, it provides greater security and data integrity since the data on the blockchain can’t be altered. That means logistics and supply chain partners can work together more easily with greater trust that the data they’ve provided is accurate and up to date.

13. Secure Internet of Things networks

The Internet of Things (IoT) is making our lives easier, but it’s also opening the door for nefarious actors to access our data or take control of important systems. Blockchain technology can provide greater security by storing passwords and other data on a decentralized network instead of a centralized server. Additionally, it offers protection against data tampering since a blockchain is practically immutable.

14. Data storage

Adding blockchain technology to a data storage solution can provide greater security and integrity. Since data can be stored in a decentralized manner, it will be more difficult to hack into and wipe out all the data on the network, whereas a centralized data storage provider may only have a few points of redundancy. It also means greater access to data since access isn’t necessarily reliant on the operations of a single company. In some cases, using blockchain for data storage may also be less expensive.

15. Gambling

The gambling industry can use blockchain to provide several benefits to players. One of the biggest benefits of operating a casino on the blockchain is the transparency it provides to potential gamblers. Since every transaction is recorded on the blockchain, bettors can see that the games are fair and the casino pays out. Furthermore, by using blockchain, there’s no need to provide personal information, including a bank account, which may be a hurdle for some would-be gamblers. It also provides a workaround for regulatory restrictions since players can gamble anonymously and the decentralized network isn’t susceptible to a government shutdown.

Blockchain is in its infancy

Blockchain technology has only been around for a dozen years, and businesses are still exploring new ways to apply the technology to support their operations. With the growing amount of digital data used in our lives, there’s a growing need for the data security, access, transparency, and integrity blockchain can provide.

Source: The Motley Fool

The code and the agreements contained therein exist across a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible.

Smart contracts permit trusted transactions and agreements to be carried out among disparate, anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.

Smart contracts are made possible by blockchains, a network of computers that work together to enforce rules on the network without requiring the help of an intermediary.

How smart contracts work

Smart contracts work by following simple “if/when…then…” statements that are written into code on a blockchain. A network of computers executes the actions when predetermined conditions have been met and verified. These actions could include releasing funds to the appropriate parties, registering a vehicle, sending notifications, or issuing a ticket. The blockchain is then updated when the transaction is completed. That means the transaction cannot be changed, and only parties who have been granted permission can see the results.

Within a smart contract, there can be as many stipulations as needed to satisfy the participants that the task will be completed satisfactorily. To establish the terms, participants must determine how transactions and their data are represented on the blockchain, agree on the “if/when…then…” rules that govern those transactions, explore all possible exceptions, and define a framework for resolving disputes.

Then the smart contract can be programmed by a developer – although increasingly, organizations that use blockchain for business provide templates, web interfaces, and other online tools to simplify structuring smart contracts.

With conventional contracts, a document outlines the terms of a relationship between two parties, which is enforceable by law. If one Party A violates the terms, Party B can take Party A to court for not complying with the agreement. A smart contract fortifies such agreements in code so the rules are automatically enforced without courts (or any third party) getting involved.

Benefits of smart contracts

• Speed, efficiency, and accuracy: Once a condition is met, the contract is executed immediately. Because smart contracts are digital and automated, there’s no paperwork to process and no time spent reconciling errors that often result from manually filling in documents.
• Trust and transparency: Because there’s no third party involved, and because encrypted records of transactions are shared across participants, there’s no need to question whether information has been altered for personal benefit.
• Security: Blockchain transaction records are encrypted, which makes them very hard to hack. Moreover, because each record is connected to the previous and subsequent records on a distributed ledger, hackers would have to alter the entire chain to change a single record.
• Savings: Smart contracts remove the need for intermediaries to handle transactions and, by extension, their associated time delays and fees.

What can smart contracts be used for?

Some common ways of using smart contracts are:

• Multisignature accounts: Funds can only be spent when a required percentage of people agree.
• Encoding financial agreements: Manage agreements between users. Say, if one person buys insurance from an insurance company, the rules of when the insurance can be redeemed can be programmed into a smart contract.
• Agreements based on the outside world: Pull in data from the outside world (financial, political, or whatever) with the help of oracles.
• Provide the third party: Similar to how a software library works, smart contracts can work with other smart contracts in a chain.
• Storage: Store information about an application, such as domain registration information or membership records. Storage in a blockchain like Ethereum is unique in that the data is immutable and can’t be erased.

Examples of blockchain platforms supporting smart contracts

• Bitcoin: Provides a Turing-incomplete script language that allows the creation of custom smart contracts on top of Bitcoin like multisignature accounts, payment channels, escrows, time locks, atomic cross-chain trading, oracles, or multi-party lottery with no operator.
• Cardano: A blockchain platform for smart contracts, using proof of stake
• Ethereum: Implements a Turing-complete language on its blockchain, a prominent smart contract framework.
• EOS.IO: A blockchain platform for smart contracts
• Tezos: A blockchain platform modifying its own set of rules with minimal disruption to the network through an on-chain governance model