Smart Contracts Spell The End of Lawyers And Intermediaries

One of the most promising blockchain technology creations comes in the form of smart contracts.  Whether or not smart contracts will only work with Bitcoin as a payment method, remains to be seen, but there is a lot of excitement surrounding this technology.  In fact, smart contracts could very well replace any type of middleman, including lawyers.

It’s About Bitcoin Technology, Not The Bitcoin Price

Bitcoin news is often dominated by talks and articles about the current Bitcoin price and how that price will carry on (upwards or downwards) for the next week or so.  As is the case with a free market situation, there is no necessary trading “logic” to be applied to the Bitcoin price.  Good news or bad news does not always have an effect on the price.

It is a good thing then that most companies and investors are looking beyond the aspect of the Bitcoin price and are taking a liking to the underlying blockchain technology.  After all, without the blockchain, there would be no Bitcoin.  Yet the blockchain can exist without relying on Bitcoin, even though that was its original purpose.

One of the more exciting developments in terms of blockchain technology comes in the form of smart contracts.  Agreeing to a contract between two parties without any intermediary or lawyer sounds very attractive to a lot of people right now.  No human element involved in the equation, means no room for corruption, outside influences or indifference to the truth.

Assuming a smart contract implementation gets some form of mainstream traction in the future, there would be (technically speaking at least) no more need for lawyers.  After all, smart contracts are handled by computers, who only deal with “yes/no” statements, with no “and, if or maybe” to take into account.  And money being held in escrow until the recipient of the goods or services declares everything is in order can be done by the same computer system as well.  Plus, computers don’t charge a commission, whereas lawyers and other intermediaries do.

No Security Risks Due To Transparency And Decentralization

Whenever people hear about a revolutionary new technology in which computers play a central role, there is an immediate distaste for such a service.  Computers present a massive security risk because they are connected to the internet.  And what if one of the parties to the smart contract decides to hack the computer acting as an intermediary?

This is where educational efforts will play a key role in the years to come.  Smart contracts are decentralized, meaning there is no central point of failure, or no “single computer to hack”.  Any smart contract can have as many intermediaries as needed and even if one of them would be hacked, a majority vote is still needed in order to come to a different decision.

Additionally, blockchain transactions are recorded on a public ledger, reducing the chance for fraud to zero.  Any transaction on the blockchain is publicly available, and anyone can see who the recipient of the money was.  Because of this, there is no way to cheat out of a smart contract because it is way easier to hold someone accountable by using blockchain technology.

Even though smart contracts will cost a fair few people their jobs as an intermediary, blockchain technology is evolving at such a pace that more and more jobs will be created within this space.  As a result, the paradigm of jobs will shift slightly while saving companies and businesses billions of dollars every year.  And that money can be invested in new projects, which requires additional jobs, etc.

Source: HP Matter

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