With Smart Contracts is automated, digital representations of contracts. The rules contained in a contract, such as "If the delivery is made properly, the amount will be transferred to XYZ" are executed directly in a smart contract. So it is not a separate implementation in a software system or manual intervention of the people necessary. The French AXA insurance puts Smart Contracts an example for some time in the travel industry. How to Obtain Travelers about Fiz zy automatically have completed a travel policy, a compensation payment when their flight is more than two hours late.
This example shows the growing importance of smart contracts for businesses and organizations. Therefore, scientists from the Universities of Munich and Würzburg-Schweinfurt have investigated in a study what expectations and possible uses European companies have with Smart Contracts. The scientists interviewed several European experts who use smart contracts and have already gained experience with them. The results of the researchers were presented at the renowned Business Informatics Conference PACIS in Japan.
Industry experts expect smart contracts to change many traditional business models in depth. Therefore, it is essential for companies to engage in smart contracts. Smart contracts are not a question of the industry (such as only for insurance companies or credit institutions). Rather, smart contracts can be used in many different industries and across industries.
The experts see the main benefit of Smart Contracts in the fact that contracts and their execution can be carried out in a standardized and automated manner. In this way, significant efficiency advantages should be realized.
Lower costs with higher speed and quality
Another important area of application is according to the experts Industry 4.0. Here, smart contracts help automate agreements that use devices of the Internet of Things. In this way, value chains in the Internet of Things can be established significantly faster and more cost-effectively.
In general, the experts believe that the use of smart contracts can massively save costs and improve contract processes in terms of speed and quality. Previously problematic documentation gaps in the contract process can be closed.
New business models can therefore be developed on the basis of smart contracts, especially if excessive transaction costs have hitherto made the formation of cross-company value chains uneconomic.
Lack of professionals and mature technologies
The Smart Contracts study also looked at the challenges of implementing Smart Contracts. Here, as an example, the implementation effort can be cited. This should not be underestimated, although frameworks or open source projects are already available. Often there is a lack of specialists in this area. Furthermore, from the point of view of the surveyed experts, the technologies are not yet fully developed.
The team of scientists led by Rainer Schmidt, Barbara Keller and Michael Möhring also found out which approaches were beneficial for the introduction of smart contracts. So it's important to start with test cases. Following this, the experience from these smaller projects should be actively used and this knowledge incorporated into larger projects. Instant solutions are virtually non-existent given the early development of smart contracts. Critical issues are issues of compliance and the difficulty of making changes. Both aspects have yet to be clarified. Here there is a lot of catching up to do in practice.
In summary, Smart Contracts provide a great opportunity for companies to sustainably improve contract processes and increase competitiveness. The effort and the knowledge needed to implement it should not be underestimated. The introduction should be carefully planned to avoid irreversible mistakes.
