The relevance of smart contracts, which are self-executing contracts written into lines of computer code, is anticipated to expand as blockchain use spreads. The market for smart contracts worldwide is anticipated to reach $300 million by the end of 2023, growing at a 32 percent compound annual growth rate (CAGR) between 2017 and 2023, according to Market Research Future, a business that does market research. Amanjot Malhotra, country head India of the cryptocurrency exchange Bitay, discusses the advantages of smart contracts and how it might affect the Indian banking system in an interview with FE Digital Currency. (Excerpts with Edits)
Every time a transaction is carried out via a smart contract, the data is recorded on the blockchain network. The proof-of-work (PoW) mechanism, which is a way to validate and keep track of blockchain transactions, is used in this procedure. All timestamps, or the digital record of an event, relating to transactions based on smart contracts are stored on the blockchain.
Because they are examined by blockchain validators, who are in charge of confirming digital transactions inside the network, smart contracts can assure transaction transparency. Contrarily, transactional contracts have problems with falsification, secrecy, and middle-party participation.
I think industries like healthcare, supply chain, and education, among others, can leverage blockchain for a variety of purposes and have already begun to deploy smart contracts. The primary problem at the moment is the $1 transaction charge for blockchain transactions. Smart contracts provide several advantages in the financial industry.
I believe smart contracts are not entirely trustworthy. Since smart contracts are evaluated by security professionals who look for flaws, they generally entail a lower risk of fraud. The procedure is still underway.
Because smart contracts are Internet-based codes, it is not conceivable. Then, if a decentralized exchange or protocol wishes to establish a base of operations in another nation, it must abide by that nation’s financial laws. Otherwise, as they lack a Know Your Customer (KYC) method, smart contracts are exempt from the legislation.
The blockchain environment in India is similar to that of the rest of the world. India serves as the home base of operations for nearly all of the leading blockchain networks. If the one-dollar cost is reduced, the volume of transactions focused on smart contracts will increase in the Indian blockchain industry. Smart contracts can ensure that it is simple to lend and borrow money in the Indian financial system and that loans can be completed more quickly. I believe that the introduction of central bank digital currency (CBDC) will be beneficial to the Indian financial industry in the long run.
