Making the Case for Smart Contracts on Blockchain

Smart contracts have been in existence for some time now. This was developed to solve the issue of mistrust between parties and business partners. For a wide range of industries, smart contracts pose the advantages of reduced unnecessary expenditures, time, and costs. These make the contracts programmable, have no ambiguity as each party to the contract knows the rules (and therefore codes), and are faster to execute. Upon meeting a few pre-conditions defined in the program, the contract is automatically executed and settled. And when it comes to storing smart contracts, blockchain becomes the ideal choice as it is immutable and secure.

Why Blockchain

The data from smart contracts is encrypted on a shared ledger. This is the usual process which makes it more-than-difficult to lose the information stored in the blocks. The advantage of using blockchain here is its flexibility. The data that is stored can be of any type, and developers can select from myriad transaction options.

Besides reducing transaction costs, blockchain-based smart contracts make transactions and other business processes more secure, efficient, and cost-effective. This makes it perfect for large-scale deployments in industries such as finance, life science, and art.  In fact, any organization that must deal with high volume of transactions and longer mean time to resolve issues should opt for block-chain based contracts.

The Many Industry Applications

• Ensuring end-to-end visibility across the supply chain : Nowadays, it takes weeks for a payment to be settled once a good is received in a warehouse due to the different parties involved in verifying the receipt of the good, inspecting the condition of the good received, and then approving the payment to be made to the vendor.

Now imagine if we can create a code wherein the warehouse/drone can verify the receipt of goods (quantity, condition, and so on) using images that can be automatically programmed to verify the preconditions. Once those preconditions are met, the code can automatically trigger the payment to the vendor. Blockchain can ensure visibility for all parties involved, wherein everyone will be aware of the status of the transaction.

• Saving time and costs in real estate: Here property contract execution involves the buyer, seller, bank, notary, and government to ensure that all parties are satisfied per the contract. In most cases, once payment is made, it takes anywhere from two to six weeks for the payment to reflect in government records.

If the entire process could be programmed and executed based on preconditions being met, the entire duration could be reduced to 30 to 60 minutes, and most disputes would be automatically resolved.

• Boosting fan engagement and loyalty in sports: Popular sports clubs today can easily monetize on fan engagement by offering them a say in certain key decisions with respect to the club in exchange for fan tokens (crypto). This say can be proportionate to the amount of crypto they hold; and their vote on such decisions can be captured on blockchain. These clubs can also offer special moments that matter as part of their club history – offering digital memorials of those moments on a blockchain.
• Offering customer loyalty programs across industries: We have been observed many organizations embarking on this journey, wherein they offer loyalty points to their customers in the form of smart tokens (cryptos). And this entire user engagement through the use of loyalty tokens is further enhanced using blockchain.
   

Tech Mahindra and Blockchain

At Tech Mahindra, we offer blockchain-based smart contract services that include solutions like cross border payments, invoice discounting, trade finance, VIN based tracking, and smart treasury. We have further developed platforms that help in:

• Contracts and rights management to trace the content rights distribution and royalty management
• Invoice discounting to help importers, exporters and their banks to verify and validate transactions, ownership, payments in real time
• Loan securitization to generate a quality score that can help investors take apt decisions  
• Consent as a service to capture customer’s consent to use data for specific purposes only
• Port to store for freight management, supply chains across shipping, logistics, and similar industries

In 2021 we partnered with Singapore- and Hyderabad-based digital supply chain solutions provider to implement VaccineLedger. We wanted to roll out blockchain-based traceability solutions for vaccine delivery as well as prediction and prevention of supply chain failures like expired vaccines, counterfeiting, stockouts.

In the Middle East, we enabled a new service called the digital deed that secures data in a smart application design by the local municipality. We deployed a blockchain-based solution which uses a smart contract to verify document sharing procedure and provides ease of sharing documents with citizens and entities with a time cap. You can read more here.

The NXT for Blockchain

Blockchain has all the characteristics to be building block of Web 3.0. This technology will lead to the proliferation of decentralized applications— starkly different from the centralized offerings that we consume today from big techs. Truly, the advent of blockchain has been the most significant innovation since the internet.

Smart contracts are one of the biggest use cases for blockchain. As a company, we foresee that most consumer grade contracts (telephone, insurance, bank accounts, credit cards, remittance) will move further towards blockchain. While most organizations within the B2B space will use smart contracts in pockets today, over time this is expected to become mainstream in this space as well.

Through NXT.NOW ™ we are constantly working with customers and partners to be at the forefront of this important industry development. We have been included in the 2021 Forbes Blockchain 50 Companies, and rated as the top 10 famous blockchain development companies in India by TopAppDevelopmentCompanies.com in 2021-2022. We continue our work towards building frameworks, model contracts, and user journeys that ensure our customers are able to leverage the power of smart contracts to offer a differentiated offering to their customers.