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SMART CONTRACT: What is it?

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As an architect and a real estate consultant, I got informed about blockchain, a distributed ledger to store contracts (an underlying technology) some years back. It breathed some new ideas to me as i thought to apply its principles to my dealings to make the world an easier and more functional place.

In my quest to do that, I came across a smart contract which is a decentralized application using blockchain and a technology platform like ethereum.

Why Is It Called Smart Contract?

Now the word “smart” doesn’t really mean that something or someone has to be extraordinary and the word “contract” doesn’t certainly mean that you have to secure lots of pages of documents to sign at the bottom. A smart contract in simple representation clearly means that it is just a certain computer code built into a blockchain that nodes execute and once completed, they update the ledger.

Imagine that you need to sell a car; It’s a rather complicated and daunting process which entails a lot of paperwork, communicating with different people. That’s why the absolute majority of car owners decide to find agents that deal on cars, who deal with all the paperwork, and act as an intermediary when the negotiations begin, overseeing the deal until it’s closed.

 Another example is a vending machine; every vending machine has a rule that if you insert a certain amount of coin you’ll get a snack of choice. So when you go and insert an amount, it goes through verification and after that you get your snack.  

It’s situations like this where smart contracts could really come in handy and effectively revolutionize an entire industry, all the while making the process a lot less of a burden. Perhaps most importantly, they would solve a trust issue. Smart contracts work on an ‘If This-Then that’ principle, which means that the ownership of the car will be passed on to the buyer only when the agreed upon amount of money is sent to the system.

PROBLEMS SMART CONTRACT SOLVES

This is how blockchain works, it executes automatically, there’s no agent, intermediary, lawyer or government. Smart contracts are very small pieces of code that are secured and self- execute. Tampering with it becomes almost impossible because it can be programmed into a special programming language called SOLIDITY. It solves problems that has been in existence for ages,

 Storing data — Government records are a very important and authentic source in data because they contain useful information in marketing, management, humanities, and social science reports. These records can be taken and stored in a blockchain anonymously using contract.

Trust — No one can take, steal or misplace any of your documents, as they are scrambled and securely stored on a shared ledger. Moreover, you don’t have to trust people you’re dealing with or expect them to trust you, as the unbiased system of smart contracts essentially replaces trust.

Identification — Smart contract saves you the stress of lining up, showing your identity and completing forms manually. It stores your information and allows you to perform transactions with ease.

Safety — The coding of websites when applied correctly, smart contracts are extremely difficult to break or hack.  smart contracts are protected with complex cryptography, which will keep your documents safe.

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Backup and Speed—It helps you record and keep your files or document for backup. Imagine that your bank lost all your savings details, but on the blockchain, your documents are duplicated many times over. And the speed used in recovering the document would Save you lots of time and paperwork. Smart contracts use software code to automate tasks.

 SMART CONTRACT AND REAL ESTATE

 In the real estate application, a verified example of where a smart contract could be applied would be for the transfer of a property title. For transfer of title tied to payment between buyer to the seller, smart contracts will, in most cases, require an oracle to communicate between banking systems and a property registry.

There are now a small number of places where property registries have been digitized and are held on a blockchain. In situations where some property companies have migrated completely to the internet and are attainable to outside users, a smart contract can complete a land sale transaction, potentially saving property investors significant time and fees.

 Real estate transactions take a long time and are detailed oriented. With smart contracts, there is a neutral central coordinator. This is a system that people cannot manipulate. In it, all interactions, transactions and conditions are unequivocally divided. In the future, as this system evolves, we might not even need the real estate agent. At least not for the transaction.  Transferring a home will go from weeks to minutes. In the best case, even seconds, if everybody has already fulfilled their parts and are ready to sign. Due to the trust protocol, parties need not meet face to face to sign documents.

IMPORTANCE OF SMART CONTRACT IN REAL ESTATE

1.   All the house details are stored into a database / blockchain.

2.   The information can’t be lost.

3.   Information can’t be doctored.

4.   It is faster, secured and reliable.

5.   It promotes collaboration, agreement and cooperativeness.

6.   It promotes trust  as there is no interference of a middle man and fear wouldn’t be a factor.

SMART CONTRACT AND ARCHITECTURE.

Architecture as we all know is the practice of carefully designing and constructing buildings and other physical structures. Building prestige on the blockchain is another potential application. In architecture, smart contracts can be programmed to enhance building performance. With a censor, a smart building component can send information about its performance to a distributed database.

Becoming an architect with the use of blockchain grants you the power to find solutions to the problems that we face. From finding ways to providing shelter in the world, to making hospitals more efficient, to designing buildings that bring cultures together. Smart contracts in architecture help in maintenance and repairs patterns unsupervised.

Presently, the system is hostile to sharing more information than necessary out of fear of legal consequences in case of low performance. This shouldn’t be the case, what is necessary is to provide accurate qualitative information as a basis for continuous learning and development. 

One advantage of this career is that your work would hold its place on this earth for a very long time. Architecture school teaches you how to deal with problems quickly and blockchain helps you save time and takes the trouble away so it doesn’t have a reason to arise by storing your work and making executing documents legally relevant to the actions according to terms of a contract or an agreement.


This article was written by Ayoyinka Adebiyi (GED) – CEO of Hagglex Limited

For more blockchain insights follow GED on Twitter

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