Blockchain technology is revolutionizing virtually every aspect of our society. And it is that, beyond cryptocurrencies, blockchains have driven the development of multiple products and services. Which, applied to the different industries, have generated great improvements in their efficiency. Reason why the World Bank investigates smart contracts, as a mechanism to improve the international financial system.
Smart contracts and the Blockchain revolution
Eleven years have passed since the birth of Bitcoin, the cryptocurrency created by Satoshi Nakamoto. Since then, it has led to the emergence of hundreds of other virtual currencies with different capacities. However, the creation of BTC not only fueled the process of developing more crypto assets, it also kicked off what can be considered a true Blockchain revolution.
Thus, blockchains have served to create dozens of products and services in all sectors of society. Positively impacting from agriculture to industry, through finance and commerce. Improving efficiency in the economic process, and generating millions of dollars in profits for companies and organizations that have known how to take advantage of this technology.
And among the most important applications born from this revolution, smart contracts occupy a special place. Well, they consist of contracts that instead of being written on paper, are programmed directly on a Blockchain. Being executed automatically without the intervention of any person.
Thanks to this, the intervention of the State and the justice apparatus would be unnecessary in many cases to guarantee the execution of a contract. Well, it runs itself as soon as certain conditions specified in the smart contract code are met. And that, being protected by Blockchain technology, they are immutable.
World Bank research
The possible advantages that the large-scale application of smart contracts would bring are precisely the reason why the World Bank would be investigating them. Writing for this a study known as “Smart Contract Technology and Financial Inclusion”, in which possible applications of smart contracts in the economy are analyzed.
Thus, according to World Bank research, these products could be used mainly in two sectors. On the one hand, in unsecured short-term loans, despite the fact that the organization itself recognizes that in this case, the usefulness of smart contracts would not be much. Well, lending of this type is already quite automated, and a smart contract can do little to improve a borrower’s credit rating.
And on the other hand, the issuance of insurance, where smart contracts could have a greater impact. Helping to determine what is the type of insurance indicated for each situation. As well as increasing trust between companies and policyholders, automating the process of executing policies.
In this way, an institution like the World Bank would be recognizing the value of a Blockchain product such as smart contracts for the future of the world economy. Leaving the door open for further research, and its adoption by companies and organizations. What makes this study our Today’s Data here at CryptoTrend.