Looking to hire developers or outsource smart contract development for your blockchain idea? Here’s your 3-step guide on what to do prior to diving into smart contract development Smart Contracts developed using blockchain technology are outsmarting traditional contracts. Who thought contractual governance could be robotized one day. Well, it has happened already. But.. Do you fully understand the capabilities of a smart contract? Here’s a 3-step guide to help you with getting your business ideas developed on smart contracts.
Step 1: Understand the difference between Smart Contracts & Digital Contracts
Smart Contracts are similar to their predecessors like traditional paper based contracts, digital contracts or software systems in that they ratify a set of stipulations of a legal, technical, or a data-conditions contract between multiple people or entities. However, that is where the similarities end. In stark comparison with existing forms of contracts, smart contracts are deployed on a shared infrastructure that runs the blockchain, making them far more sophisticated than any other type of digital contract. That’s enough jargon, here’s a layman summary:
- Smart contracts are not affected by the subjective thoughts of humans
- Smart contracts use “intelligence” or automated code to implement conditions once programmed events “trigger” various parts or all of the terms and conditions encoded on the contract.
- As terms of a smart contract are satisfied, each phase of the contract will be executed whether or not anyone agrees.
- Multiple copies of smart contracts are secured across a distributed network of computers (known as the underlying blockchain infrastructure), providing immutability to the execution of the contracts.
- Money is saved since there is no third-party involvement
- Free from manual errors
- Smart contracts promote transparency and are visible to everyone
- Smart contracts are not vulnerable to forgery
Step 2: Choosing the right blockchain platform
Smart Contracts can be developed on various platforms – for example Ethereum, Hyperledger, EOS and others. It is absolutely critical to choose the right platform before hiring developers to start smart contract development. If you leave the decision of blockchain platform selection to your developers, well, your efforts are going to fail! Decision on the underlying blockchain platform has a lot to do with your company goals. Here are some questions you should have answers to prior to getting smart contracts developed:
- Are you planning to raise funds via a crowd funding campaign or equity based?
- Are you looking for a public blockchain infrastructure?
- Do you want transaction privacy with permission controls?
- What is your time to market?
- How many stakeholders are involved in your process?
- Do you need high transaction throughput?
- Why can’t you use a Web2.0 stack with a database instead?
- Do you really need a smart contract?
These are some critical blockchain-platform questions that need consulting before diving into smart contract development.
Step 3: Learn about the types of smart contracts being used in the industry
Assuming you’ve decided the underlying blockchain platform, here’s a list of most common smart contract types. You should know about these before the developers start with their technical rant
Types of Ethereum Smart Contracts
- ERC-20: The most common smart contract standard for fund-raising. According to Investopedia, “As of April 16, 2019, more than 181,000 ERC-20-compatible tokens exist on Ethereum main network.” This smart contract is Ethereum’s technical standard for crypto-tokens implemented on its blockchain.
- ERC-721: These non-fungible tokens (NFTs) are designed for digitizing unique assets with digital scarcity. High in demand as of mid 2019.
- ERC-777: Dubbed the Lucky Contract, the ERC-777 token contract is an extension of the ERC-20 token. It has been derived from the Ethereum Improvement Proposal. According to its proposal, “This EIP defines standard interfaces and behaviors for token contracts.”
- ERC-1132: A token standard developed by Team Somish, it’s an “extension to the ERC-20 standard with methods for time-locking of tokens within a contract.” Basically, think of ERC-1132 as an escrow that can replace banks
Type of EOS and Hyperledger Smart Contracts
Coming soon on the blog!
Need ideas for inspiration? See what the world is creating
Real Life examples of how smart contract development is being done across industries are being used globally.
- Crowd Funding. Startups globally have found a love for crowd funding via Initial Coin Offerings (ICOs), Initial Exchange Offerings (IEOs), Security Token Offerings (STOs) in order to raise capital and circumvent traditional investment models and regulatory hurdles.
- Peer to Peer Lending (#defi). More than half a billion dollars are locked in #defi (decentralized finance) startups offering true peer to peer lending, all built using smart contracts without any intermediary between two transacting parties.
- Insurance. Be it flight delay insurance, smart contract cover or co-insurance, InsurTech startups are leveraging smart contracts right, left and center to build peer-to-peer insurance alternatives. Huge disruption seen already.
- Real Estate. Realtors and landlords are restoring trust in the real estate sector by adopting smart contracts for fractional ownership of land. More than 50% state governments in India are engaged in deploying blockchain based land record management solution.
- Supply Chain Workflow Automation. The biggest disruption in the enterprise sector is being witnessed in supply chain. Smart Contracts are leveraged for invoice discounting, material track and trace, escrow of payments, data exchange between un-trusted parties and many such use-cases.
- Oil & Gas. O&G companies are aiming for more than 5% reduction in their cost of freight bill audit and pay process, which runs in millions of dollars annually – all by using smart contracts between multiple stakeholders
- Aviation Industry. Avionics equipment maintenance and it’s A-check, B-check, C-check log is one of the biggest pain points in the aviation industry today as it involves multi-party interaction between OEMs, MROs, Airlines, Airports and Aviation Authorities. Once the toughest industry to adopt new technology, Aviation Industry is on the brink of implementing smart contracts.
Smart Contract Development isn’t rocket science. You can start today!
At Somish, we have worked with Fortune 500 companies, startups and governments across the globe, over the last 3 years – developing smart contracts for various industries. Our 3 years of blockchain expertise, combined with over 100 years of team experience across industries has proved to be of high value to our esteemed clientele. Get started with smart contract development. Ask for our testimonials.
Ish Goel established the ‘Blockchain Centre of Excellence’ at Somish in 2016. Through the Somish Group, he has worked with the Government, Real Estate, BFSI, Manufacturing, Retail, Agriculture and Logistics industry over the past one decade.
Ish is one of the key blockchain architects at Somish and has led delivery of multiple blockchain products using platforms like Ethereum and Hyperledger globally. Key product offerings include: DEF (Data Exchange Framework powered by blockchain, getdef.io), GovBlocks (Decision Making Protocol, govblocks.io) and Certy (Issue Certificates on Blockchain, certy.io)