Real-time applications of Etherum Smart Contracts
Are you interested in Ethereum? According to market capitalization, it is one of the most used cryptocurrencies on the market. Its fascinating technology allows the creation of smart contracts and decentralized applications. How about knowing more?
History of Etherum
Ethereum is a platform proposed in late 2013 by Vitalik Buterin. It was created through online financing that took place between July and August 2014. The financing was made with Bitcoins, in exchange for some Ethers, the system's currency.
Ethereum is one of the greatest inventions of mankind since the internet. Perhaps, it is more impactful and important in the long run than the internet itself. It takes the technology used in Bitcoin and brings it to other means, not just to the monetary system.
Basically Bitcoin's security and decentralization are implemented in any possible systems, through smart contracts. Ethereum is an open platform (Open Source) focused on the creation and distribution of decentralized applications. Applications that do not need intermediaries are able to interact with social, financial, game interface and anything else.
Just as Bitcoin makes financial institutions obsolete, Ethereum can make any social institution obsolete. This is very striking and surreal, unimaginable a few years ago. This takes all corruption and bureaucracy together. Because of this many use cases are possible today. It is true that Etherum makes everything safer, more efficient, less centralized and less corruptible. Meanwhile, let’s discuss how Etherum smart contracts can present very useful use cases.
Use cases for Etherum smart contracts
The list of apps that can be created on Ethereum seems endless, and in this section we will explore some of the top use cases for smart contract platforms, ranging in various industries. Without further ado, let's get started.
- Banking and financial service contracts – Ethereum smart contracts have many use cases in the banking and finance industry. To date, these contracts can be applied in areas such as government bonds, mortgages, insurance claims, payments and settlement.
For example, imagine a government bond that is about to expire - if it is written and held under a smart contract, the funds will be paid to the bearer only upon maturity.
Also, imagine a situation where an individual does not pay a certain amount of EMI continuously without notifying the bank. In that case, instead of exclusion, smart contracts can be written that can impose rules and conditions. Also, Ethereum has other use cases in the financial field, such as contract-oriented smart loans, decentralized exchanges and even the creation of stable coins.
- ICO and DAICO – Etherum smart contracts have made the entire ICO process much easier, as well as the sale of tokens. They bring efficiency, transparency, democracy, and justice. Recently, Vitalik Buterin suggested a new model that stems from the union of a DAO (autonomous decentralized organization) and an ICO, and results in a hybrid model called DAICO.
As for a DAICO, the development team launches a DAICO smart contract called tap. This is slightly different as compared to the old ICO contract, but it also starts in "Contribution mode" as in the old ICO contracts where investors can contribute to Ether in accordance with the ICO rules.
But, in the DAICO contract, the tap determines how much and Ether developer can withdraw the contract per second and this tap limit is governed by DAICO taxpayers. This maintains control over the developers since they cannot withdraw the entire amount contributed at the same time and escape with the money.
In this way, ICOs and token sales can have become more efficient with Ethereum smart contracts.
- Predictive Market – Predictive markets are another use case that can benefit from Ethereum contracts. So far, we have platforms like Augur and Gnosis, which are using the Ethereum blockchain to run forecasting platforms.
The predictive market is an idea that can be applied in places where you need to know the future outcome, such as in a football match, an election campaign, price of auction discovery, the possibility of Elon Musk succeeding in the colonization of Mars, etc.
In these situations, the participants are encouraged to participate in the predictions and when they are correct, they are rewarded with the smart contracts that run on the Ethereum blockchain. These predictions can be used in betting or in the decision of a company to launch a new product, making the whole process cheap and rewarding.
- Trusts – Contracts can be used when a custody service and an intermediary are needed because you can now replace them. The only thing that in this case should be a really smart contract programmed with all the conditions and scenarios, that is to say that it is very well tested.
For example, we can have a custody service in a p2p exchange using smart contracts. Also in the real estate industry, it could be very useful, as with wills and inheritances, and in places where there are nominees.
Another example could be the use of smart contracts on platforms that offer jobs like Upwork. There the contracts would replace the centralization of the platform that takes a commission for each work done.
- Digital Identity Management – Digital identities can also be managed through smart contracts and thus it can solve a million dollars theft problem and information monopolies. Through these Ethereum blockchain tools, projects such as uPort that offer the sovereign identity option to their users are possible.
Let's look at the example that we travel abroad and have our passport in uPort. We pass through the checkpoints and this reveals the details chosen and required at the airport to be seized.
No one can see or copy this information unless you authenticate through the uPort app on your mobile and this information will always be stored in the Ethereum blockchain, which is a trusted source of information for the applicant as well.
In summary, the Ethereum platform is well underway; in addition, its adoption is increasing over time. Its success will depend on the ability to execute projects based on the technology proposed by the platform.