Blockchain technology is set to replace the concept of signing a contract. In this video we will explain the benefits of using blockchain to replace the old paper contract system. Contracts expressed in computer code are ideally suited to govern digital services that can be described meticulously and unambiguously. This means that there is no discrepancy between parties regarding the implications of these so-called contracts.
Secure signing via smart contracts
There are plenty of real life cases where these new smart contacts have obvious benefits, such as with IT services that are sold with a guaranteed uptime (known as a Service Level Agreement). Smart contracts can monitor whether the service meets this requirement or not, and the customer can rest assured that the code that supports this can’t be manipulated.
Another benefit of using smart contracts is that you can easily prove the existence of the contract to a third party: supplying a life insurance contract when applying for a mortgage, for example. Today this is a manual task and prone to error as the contracts are often scanned, and so cannot be interpreted by a computer. Smart contracts can solve this problem without requiring costly certificates from external certificate authorities to be valid. Parties can identify each other and sign digitally as they would sign on paper: with their own digital signature, generated themselves.