What We Have Covered in This Article
Last Updated on July 10, 2018 by Editor Futurescope
Quite often, Ethereum is termed as the second generation of the Blockchain. The first is Bitcoin, but; its capabilities are limited to cryptocurrencies. Ethereum is a whole new world that allows the scripting of its Blockchain. This gives power to developers to come up with different DApps on the Ethereum Blockchain, something that doesn’t happen in the Bitcoin network. One of these projects that are carried on Ethereum is the smart contracts.
Vitalik Buterin- the brain behind Ethereum– demonstrated how the Blockchain has advanced coding opportunities for developers. You can turn completeness or even script smart contracts on the Blockchain. The smart contracts on the Ethereum Blockchain make the network feasible in today’s technological arena. The following are some of the real life applications of Ethereum smartcontracts.
Financial Contracts
The banking sector has several ways they can make use of the Ethereum Blockchain’s provision for smart contracts. These include insurance claims, bonds and mortgages. For instance, if a party fails to honor a payment without the notice of the loaner, rules and conditions can be scripted instead executing a foreclosure.
Again, if a state bond maintained and well written on smart contracts, it will be disbursed to the bearer upon maturity.
ICOs and DAICOs
Without Ethereum’s smart contracts, managing ICOs would probably be a difficult process. It has not only made the sale of tokens easier, but also effective, fair and transparent. A DAICO is a hybrid method of using DAO and ICO as recommended by Vitalik Buterin. DAICOs involve the launching of a ‘tap’ smart contract on Ethereum. It starts with a Contribution Mode which allows investors to fund the project using Ether (ETH) in regard to the rules of the ICO.
The developing team benefits from their work as they receive their Ether. The total amount that each person deserves is calculated by the DAICO smart contract’s tap in units of Wei per second. The tap limit that a developer can withdraw is regulated by the DAICO contributors themselves. This is critical in public projects because it prohibits developers from withdrawing all the contributed amount. In extension, it also acts as a check for transparency within the ICO as no one can run away with the money or get what they don’t deserve. So, Ethereum smart contracts are key to a transparent token sale.
Prediction
The betting and gambling world also benefits a great deal from the Ethereum Smart contracts. Some of the platforms on the Ethereum platform that have been successful in utilizing the prediction market are Augur and Gnosis.
The main idea is to let people make predictions and then pay those that do it right. For instance, you may need to know which team will win in the next world cup or who will become the next US president. Or, it could be the price determination during a public auction. In any of these situations, the smart contracts will be necessary.
The organizers invite participants to make predictions. Those who make correct predictions, are rewarded using the trustless contracts on the Ethereum Blockchain. The prediction capabilities of Ethereum smart contracts makes them important in helping companies know whether to start providing new products.
Escrow
Did you know that you can trade with strangers without involving escrows and middlemen? Well, all you need is to have a smart contract that is equipped and thoroughly tested. Then, you can use it to replace the work done by escrows and thus reduce the costs incurred in such procedures.
The replacement of human escrows by Ethereum smart contracts has been witnessed in LocalEthereum, a peer-to-peer exchange for Ether. Other instances include the real estate sector as well as inheritance issues. Again, marketplaces such as Craiglist, Upwork and Fiverr can implement the use of smart contracts to act as the escrow. This would rid the centralized platform of delays and technical hiccups.
Managing Digital Identity
Did you know that the theft of identity is the most committed cybercrime in Europe? Well, it is, according to Europol. Smart contracts can solve this problem by managing digital identities which by solving the challenges associated with data monopoly. Ethereum smart contracts provide a ‘self-sovereign’ all the users.
A good case study is uPort. The uPort mobile app safely stores your personal data on the Ethereum Blockchain and acts as an inbuilt passport. This allows you to pass through different international checkpoints such as at the airport without exposing your confidential information. The good thing about this is that no one can access the information unless you allow the app to do that yourself.
Winding up
Ethereum is a wide platform that supports the scripting of smart contract. It provides a space onto which companies, governments and individuals can build apps for secure management of data. Today, the Ethereum Blockchain has more than a million accounts. It also has over 1300 DApps and the number continues to soar. This is a good indication that Ethereum smart contracts are the next big thing in the technological world!
