The term ‘Ethereum Smart Contracts’ was first proposed by Nick Szabo in the early 1990s. It refers to the set of protocols to support the execution of specific tasks. He envisioned an automatic digital marketplace where transactions happen smoothly without intermediaries through these Smart Contracts.
Ethereum is the second generation of Blockchain technology with Smart Contract functionality. Smart Contracts are the specific protocols that execute on Ethereum. Smart Contract development services can use Ethereum to build decentralized applications.
We will discuss the real-time use cases of Ethereum Smart Contracts in this blog.
What are Smart Contracts?
Smart Contracts are digital agreements that operate on simple “if/when…then…” statements. These statements are written into code on Blockchain and executed to perform a particular task when the predetermined conditions are met or verified.
Smart Contracts can be used to perform various actions like fund release, issuing a loan, vehicle registration, sending notifications, or issuing a ticket. After the task is executed, the Blockchain is updated with the outcome.
Smart Contracts are typically used to automate the workflow and eliminate the intermediary’s involvement. Also, the transaction cannot be altered and is visible to only the authorized parties.
Best Use Cases of Ethereum Smart Contracts
- Streamline Banking and Financial Procedure
Smart Contracts in the banking and finance sector can be used to speed up the transaction and simplify procedures. Automation in the banking sector will eliminate human intervention in the trade and ensure a more accurate transmission of information.
For instance, Smart Contracts can be used to carry out automatic insurance redemption workflow by coding its protocols.
- Decentralized Games
Decentralized games operate fully or partially on Blockchain technology. Built with the same principles as DAOs and combined with Blockchain technology, decentralized games enable transparency and proof of ownership.
Such games use collectibles that hold real-world value to face off other players in computer-simulated environments.
Another example in this category can be decentralized gambling games; Smart Contracts are revolutionizing and increasing confidence in transactions in such applications.
- Digital Identity Management
Identity theft is one of the widespread malicious activities online. People usually hesitate to provide their data on unreliable, especially susceptible details like credit card and debit card information.
Moreover, the manual verification method is slow, lacks flexibility, and is prone to mistakes. However, Ethereum Smart Contracts resolve this issue due to its automation to dynamically record and verify the data.
- Create and Distribute NFTs
Non-fungible tokens (NFT) are revolutionizing the digital art and collectibles world. NFTs are used to represent the ownership of unique items like art, collectibles, and even real estate. Smart Contracts power NFTs on the Ethereum blockchain to showcase anything remarkable as a digital token and deal with transferability of ownership.
More people are spotting new opportunities in this market by hiring Blockchain development companies with excellence in Smart Contracts to fabricate an NFT marketplace.
The substantial market opportunities make this a promising field. According to Statista, Blockchain solutions are projected to reach approximately 19 billion U.S. dollars by 2024, increasing from 6.6 billion dollars in 2021. The increasing numbers are a clear indication that solutions composing Ethereum Smart Contracts will soon be part of our daily lives.