In this article we will go down a bit On the ground – we pass from theory to practice, we will analyze the concrete S advantages of smart contracts, we will model three examples of the use of corporate smart contracts and touch on the shortcomings of the infrastructure. In addition, let's talk about the difficulties that can arise when implementing smart contracts and how we deal with them in Jincor.
What for To use smart contracts? What does this give?
Compared to conventional paper contracts, smart contracts have a number of fundamental advantages:
Autonomy. You independently conclude all agreements – there is no longer any need to contact brokers, banks, notaries, lawyers and other intermediaries to confirm or confirm the transaction. By the way, this also excludes the possibility of manipulation by these persons, since the contract is executed automatically by the network, and not by one or more people.
Trust and Preservation Cryptography, data encryption and storage in the block are responsible for the safety of your documents. There are hundreds of duplicates, and no one will be able to say that they have lost your documents. Blocking and its decentralization also make it almost impossible for hacker attacks and the substitution of your smart code.
Speed. It usually takes a very long time to work with paper documents and accompany them. The software code for smart contracts automates these tasks, thereby freeing you from personal involvement in many business processes that are usually performed manually.
Savings. Smart contracts save your funds, as they eliminate the intermediaries mentioned above from the business processes. The cost of notarial assurances of transactions can reach hundreds of thousands of dollars. And after all, notarizing a contractor sometimes requires not only the contract, but every transaction on it. I think that each of you has already experienced this in your work and understands the amount of money involved.
Accuracy Automated contracts are not only faster and cheaper than conventional ones, they also help to avoid mistakes that occur when documents are manually filled out and exclude the human factor when carrying out contract transactions.
Few examples from the economy:
Investment banking: corporate syndicated loans trading with smart contracts could count on shorter settlement cycles. Instead of the current 20 or more days, smart contracts can provide payment cycles lasting 6-10 days. This can lead to an increase in demand for data trading by 5%, which will result in additional income of $ 2-7 billion per year for professional traders.
Insurance. The use of smart contracts in the consumer insurance sector can lead to an annual savings of $ 21 billion due to automation and reduction of overheads for processing claims. Consumers can also expect higher insurance premiums, because insurers can use part of the savings just for this.
Banking services: the industry of banking instruments and lending (corporate, consumer, mortgage, etc.) Can get a huge benefit when implementing smart contracts. Automating the procedures for concluding banking contracts and executing transactions on them, and excluding people who process and fill out documents from the process, banks can expect savings of between $ 480 and 960 for each loan – this will result in savings of $ 3 to 11 billion in year. For consumers, this savings can be expressed in lowering the points for interest rates of lending, as well as reducing transaction costs for bank commissions and transactions.
* Smart contracts can be used even with a popular vote. In this case, the protection against all kinds of hacking will be ensured by the fact that the burglars will need the computing power of the Lord God himself to crack the blockade and substitute the necessary transactions for voting.
Now to the shortcomings and the solution for them we see in Jincor:
Lack of environment and infrastructure. As we said in the first article, blocking technology reminds us of the Internet of the 1990s, when there were hardly 20-30 worthy programs and services on the whole network. As a consequence, many opportunities have not yet been realized. In the case of smart contracts, for example, there are no oracle programs that could provide the binding of the digital world to the real world and provide smart contracts with all the necessary input to execute their business logic. This creates certain obstacles to the integration of smart contracts into the daily life of organizations. Most contracts in one way or another are related to the outside world – shipments, customs, logistics and so on. All these data require a strong network of oracles that will provide them in a safe and reliable manner.
Decision. Accelerated development of technologies and participation in their development of such giants as Linux, IBM, Intel, Microsoft and many others, allows us with reasonable confidence to say that solving this shortcoming is just a matter of a couple of years.
The unchangeability of smart contracts. Another possible obstacle may become the unchangeability of smart contracts. Smart contracts are programmed business logic stored in Blockchain and not available for changes. But in real life contracts have properties to be reviewed, they often make additions or changes by agreement of the parties. Future smart contracts should be able to keep free entries, to which the smart contract will be able to access and check its code for relevance, or use the data from the supplementary agreement to fulfill contractual obligations.
Agree, looks terrible and incomprehensible to the majority. In fact, the picture is the work of a system of smart contracts with a proxy smart contract. A proxy smart contract is a contract that allows customers to perform indirect requests to other smart contracts. Thus, if you, for example, have a working smart contract with your employee with a salary payment system and you want to transfer it to a contractual system, then it will be enough for you to develop an additional agreement in the form of a separate smart contract and replace in a proxy contract Address on the actual.
The shortage of qualified specialists. For the development of smart contracts, their deploy and the resolution of potential disputes over them, any organization will require the support of specialized firms, or the availability of so-called codelawyers in the state. Codelawyers is a new vivid term applicable to people with a very rare set of competences, including the programming of smart contracts and legal education with experience of legal practice.
Decision. The way out of this situation can be a significant simplification of procedures for creating simple template smart contracts for solving typical business problems. To do this, we develop our own designer of smart contracts in Jincor, which will make the process of creating and expanding smart contracts no more difficult than making purchases in the online store.
Regulation of smart contracts. The speed of technology development is really impressive. In this field, mankind rushes at super speeds, and regulators simply do not have time to develop a legislative framework for new technologies.
Decision. Progressive society, if it wants to further develop technology, must independently develop a new foundation and reach a public consensus that the code is the law by which it should be regulated. We in Jincor plan to actively participate in public and legislative hearings and offer our options for regulatory acts that open the use of smart contracts for all businesses and individuals.
The secrecy of smart contracts. Currently, all used for the recording of smart contracts, blockrooms are public, and transaction records are open and can be analyzed by any Internet user, which creates certain limitations. Banks, financial services and other companies are not too eager to disclose their corporate connections, and most large companies generally have a regime of commercial secrecy regarding corporate interactions, which makes public blockades unfit for corporate smart contracts.
Resolution. To hide these data from third parties, companies need to be able to build smart contracts on a closed enterprise block that will preserve the confidentiality of all data and transactions. The development of such a block is occupied by Jincor specialists.
Jincor launches an ICO to collect the funds needed to further develop the ecosystem and enter the global market.
Beginning on August 21, you will have a unique opportunity to buy JCR tokens under pre-ICO twice cheaper than the starting price of the token (ICO will begin on November 1).
JCR tokens in the future will be necessary for the full use of the platform by organizations. Despite the fact that the use of the Jincor ecosystem for organizations will be free, some of the functionality will be paid on a fee basis, and JCR tokens will be accepted as payment for settlements with Jincor. In particular, the creation of smart contracts and their arbitration will be chargeable.