Earlier this week, representatives of David Zahra & Associates Advocates attended a BitMalta workshop centred around the practical and user-orientated benefits of Smart Contracts.
The blockchain technology on which smart contracts are based is not to be deified or painted as a solution for every modern-day problem in the business sector; it does however represent the next step in customer efficiency, particularly in the way that the technology promises to traverse the “trust gap”.
The trust gap is a recently coined term, which represents perhaps the core issue with many business conflicts and disagreements – the lack of full transparency, and the possibility that a party is being less than honest in its transactions. This can lead to not only cases of fraudulent conduct, but situations where economic activity is restrained out of caution, and in consideration of the risk involved in engaging with a party who is not fully known.
Smart contracts and the ledger system they implement will remove, if implemented correctly, even the merest possibility of fraud or deceit, with the promise of a contract which will self-execute precisely, entirely and exclusively the terms contained within that same contract. This promises to allow for agreement to self-execute with no further involvement from the parties involved, and to resolve issues which would normally take many hours of dispute and conflict resolution within seconds. Furthermore, individuals will be able to fulfil contracts with parties that may be completely unknown, safe in the knowledge that the contract will self-execute and thereby eliminating the need to trust in the competence and good faith of the other party.
One must however keep in mind that the legal infrastructure implemented to prevent money laundering and funding of terrorism must be respected in all cases, and the improved facilitation of smart contracts should not replace the typical due diligence requirements intended to ensure that neither party is unknowingly enabling illicit activities.
The potential of smart contracts harkens back to the impact of the internet revolution on the worldwide economic sector. As always, David Zahra & Associates is striving to be at the forefront of introducing and implementing smart contracts in the economic sector with the goal of maximum customer service and efficiency.
