With growing technologies, use of digital money is growing day by day. Smart contracts and Blockchain has become a center of interest. Cryptocurrencies are growing fast and have opened a new world of possibilities. According to etherscan, about 49% of total Ether cryptocurrency transactions use smart contracts.
But the most important question that comes to mind is what a Smart Contract is?
Smart Contract is a computer program running on the Blockchain. It facilitates transactions of digital currencies and assets between various parties. It allows transactions without the intervention of any third party. Smart Contract defines a set of rules and penalties of an agreement in the same way as a traditional contract does.
Businesses create a contract in such a way that if parties fulfill all the agreements/conditions, the smart contracts execute themselves automatically.
Also, if something goes wrong, the contract is revoked without completing the transactions between the parties. Smart Contract development secures the assets of all the parties involved in the transaction and ensures no one incurs any loss.
One of the most important benefits of a smart contract is that it does not depend on any third party for the fulfillment of the contract. They have the potential to soon replace some of the functions performed by lawyers and notaries. Eventually, industries will have to adjust to this new technology and will soon need to upgrade to keep up with the pace.
Contracts can be very complex at times, involving multiple transactions in various fields. The examples of complex contracts are insurance premiums, like Fizzy from AXA, or crowdfunding (for example, WeiFund app).
In this blog, we will learn about the steps you need to follow for the contract development.
Best tools for smart contract development:
Points to consider before developing a Smart Contract
Let’s discuss the key points to consider before we start developing a Smart Contract:
1. Will Smart contract development make sense for your business
Before going ahead with Smart Contract, the first question that one needs to ask is whether it works for us or not. Smart Contact runs on Blockchain technology and uses digital currencies for payment. If the business is already running on a Blockchain platform, then it is very simple to implement these contracts. But if you haven’t dealt with Blockchain, then it would be better to learn a bit more about it before implementing and using it.
2. Keep in mind the shortcomings and limitations of Smart Contract
Smart Contract has come a long way from 1994 to the present year. But there are still some things which are off limits.
- Smart Contracts are for the digital world. Anything out of the digital world cannot implement these contracts. Therefore you can apply these contracts only to something that is completely on the internet. The Blockchain is a decentralized system and is there is no legal regulation. Therefore, it cannot bind the system not running on the internet.
- Smart Contracts are fact driven and do not depend on subjective judgments of parties. They completely depend on the facts provided.
- The business develops smart Contract on “if-else” form or any other conditional form similar to it. It does not leave much space for more complex and sophisticated changes.
Planning is one of the most crucial stages of smart contract development. After identifying the limitations and requirement of the contract for your business, start planning for its development.
It is important to plan how you are going to proceed with smart contract development for your business There are various jobs for which you can implement the smart contract. It includes the transfer of payment for any service used, cryptocurrency exchange, verify transactions and so on. For this take idea by either exploring or researching the market. Otherwise by looking into an already developed project.
4. Find a Smart Contract Developer
Finding a smart contract developer is one of the most important tasks as the basis of the blockchain smart contract development. Therefore you need to look for a developer with some knowledge of Blockchain development. You need to explore and put effort into finding a person or a team for this. It should be someone who understands your business requirement. Moreover, he/she must have good knowledge of Blockchain and related areas.
Testing is one of the most important phases of the complete smart contract development process.
Many researchers from Singapore and the UK have revealed that there are around 34,200 smart contracts present that are vulnerable to hackers. Therefore it becomes more important to test the contract built for any defects and bugs.
Any error with the contract development means loss of time and resources for both customers and your company. It can also prove catastrophic for the reputation of the business. QA tests and Audits can prove helpful in successful smart contracts development for the business and can add a lot more value to it.
Smart contracts have become more appealing to the business because of the security and automatic execution of them. It is because of their business appeal that smart contract development is sure to be continued. It is a completely new way of doing traditional business between parties and involves digital currencies.
However, there are few issues with the smart contract development services like loose code which makes it vulnerable for hackers to attack it. Also once you deploy the smart contract code, it cannot be edited. Therefore it becomes necessary to pay attention during the smart contract development and testing phase.
So, depending on whether you are going to use smart contract or not it is better to have complete knowledge about the same. It is better to be up to date with this new technology and to work with the best professionals in the field to have a desired and error-free contract.