Innovation

Smart Contract

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  • Smart contracts are the transformation of the traditional contract into the digital world. More precisely, the smart contracts are contracts programmed through application code (for example, Solidity on Ethereum) that allow to execute automatically the contractual terms without human intervention

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  • Smart contracts generate important business benefits, optimizing processes, reducing errors and potentially eliminating disputes between the parties. At the same time, smart contracts present risks, due to the possibility of errors in the application code and the presence of security holes

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  • Business Changers help its customers mitigating the risks linked to the smart contracts adoption, writing the application code and verifying / certifying that the digital version of the contract is actually consistent with the agreements reached between the parties

In an increasingly digital world, any contractual relationship between parties can be automated through the use of smart contracts. The regulation is only in its infancy, but the Smart Contracts are destined to spread pervasively in the economic world


Any kind of relationship between parties in the economic world is regulated by contracts. The contract, as per its Latin etymology (comes from the verb “contrahere”, which means to put together, bring together), represents the agreement between one or more parties to settle a legal constraint. Contracts must not only be drawn up, but must also be executed, i.e. the parties must carry out actions based on the content of the contract (for example, billing and payment as a result of the supply of certain goods or services).

Smart contracts are the transformation of the classic concept of contract into the digital world. More precisely, the smart contracts are contracts programmed through application code that allow to execute automatically the contractual terms without human intervention, using the features made available by the blockchain.

The smart contracts allow to memorize the business logic related to the management of an asset on the blockchain, becoming custodians of the asset and eliminating the need for any intermediation by third parties. Assets are represented on the blockchain using a token.

There are many use cases for the adoption of smart contracts, below are analyzed only some of the most significant ones:

  • Insurance: sometimes the payments execution (following a specific event covered by insurance policy) can require months, generating inefficiencies for customers and reputational impacts for the insurance company.The smart contracts could greatly simplify the process, automatically initiating the payment due to a specific event
  • Supply chain: smart contracts can record the history of goods through the different steps of the value chain (geographical position, responsible person, status of goods, etc.). A further synergistic effect is achieved thanks to IoT (Internet of Things), which, thanks to specific sensors, can verify automatically and digitally the status of the goods
  • Human resources: the economic conditions of an employee could be coded in the recruitment phase, allowing to minimize time and inefficiencies related to the payment of contributions, any payable bonus for the achievement of predetermined objectives, the reimbursement of expenses and so on
  • Intellectual property: any object produced by human creativity could be safeguarded and protected with smart contracts and the blockchain, ensuring that copyrights are paid automatically to the actual authors of the product without requiring the help of any intermediaries

The potential of smart contracts lies in the fact that they could automate a very large number of business processes without human intervention, thus minimizing the management costs. The advantages in terms of commercial, legal and operational efficiency are evident; at the same time, the smart contracts hide risks too.

If, on the one hand, thanks to automation, it’s possible to avoid human errors in the execution of the contract, on the other side significant side effects can generate in case of the presence of bugs in the development of the code and, even worse, security vulnerabilities that could be used in a malicious way. These potential weaknesses have already emerged evident in 2016 when the equivalent of 60 million dollars in Ether were stolen (Ehter is cryptocurrency of Ethereum, one of the most widespread platforms for the implementation of smart contracts).

In addition, the smart contracts execution must be able to handle exceptions, in the case any of the automated operations, for whatever reason, is not successfully completed (e.g. failed payment due to the lack of funds of one of the counterparties). In this case, who would be called to settle the resulting dispute between the parties? The regulation of smart contracts by traditional justice is only in its infancy. In order for smart contracts to be widely adopted, it is necessary to have a regulation and procedures for the certification of the smart contract itself, i.e. certification of the fact that the written application code is actually consistent with the agreement reached between the involved parties.

Although undoubtedly there are some critical issues to be addressed, smart contracts are destined to spread pervasively. Business Changers offers its clients services related to smart contract writing and verification of the application code produced by others in terms of coherency with the agreement between the parties.

In an increasingly digital world, any contractual relationship between parties can be automated through the use of smart contracts. The regulation is only in its infancy, but the Smart Contracts are destined to spread pervasively in the economic world


Any kind of relationship between parties in the economic world is regulated by contracts. The contract, as per its Latin etymology (comes from the verb “contrahere”, which means to put together, bring together), represents the agreement between one or more parties to settle a legal constraint. Contracts must not only be drawn up, but must also be executed, i.e. the parties must carry out actions based on the content of the contract (for example, billing and payment as a result of the supply of certain goods or services).

Smart contracts are the transformation of the classic concept of contract into the digital world. More precisely, the smart contracts are contracts programmed through application code that allow to execute automatically the contractual terms without human intervention, using the features made available by the blockchain.

The smart contracts allow to memorize the business logic related to the management of an asset on the blockchain, becoming custodians of the asset and eliminating the need for any intermediation by third parties. Assets are represented on the blockchain using a token.

There are many use cases for the adoption of smart contracts, below are analyzed only some of the most significant ones:

  • Insurance: sometimes the payments execution (following a specific event covered by insurance policy) can require months, generating inefficiencies for customers and reputational impacts for the insurance company.The smart contracts could greatly simplify the process, automatically initiating the payment due to a specific event
  • Supply chain: smart contracts can record the history of goods through the different steps of the value chain (geographical position, responsible person, status of goods, etc.). A further synergistic effect is achieved thanks to IoT (Internet of Things), which, thanks to specific sensors, can verify automatically and digitally the status of the goods
  • Human resources: the economic conditions of an employee could be coded in the recruitment phase, allowing to minimize time and inefficiencies related to the payment of contributions, any payable bonus for the achievement of predetermined objectives, the reimbursement of expenses and so on
  • Intellectual property: any object produced by human creativity could be safeguarded and protected with smart contracts and the blockchain, ensuring that copyrights are paid automatically to the actual authors of the product without requiring the help of any intermediaries

The potential of smart contracts lies in the fact that they could automate a very large number of business processes without human intervention, thus minimizing the management costs. The advantages in terms of commercial, legal and operational efficiency are evident; at the same time, the smart contracts hide risks too.

If, on the one hand, thanks to automation, it’s possible to avoid human errors in the execution of the contract, on the other side significant side effects can generate in case of the presence of bugs in the development of the code and, even worse, security vulnerabilities that could be used in a malicious way. These potential weaknesses have already emerged evident in 2016 when the equivalent of 60 million dollars in Ether were stolen (Ehter is cryptocurrency of Ethereum, one of the most widespread platforms for the implementation of smart contracts).

In addition, the smart contracts execution must be able to handle exceptions, in the case any of the automated operations, for whatever reason, is not successfully completed (e.g. failed payment due to the lack of funds of one of the counterparties). In this case, who would be called to settle the resulting dispute between the parties? The regulation of smart contracts by traditional justice is only in its infancy. In order for smart contracts to be widely adopted, it is necessary to have a regulation and procedures for the certification of the smart contract itself, i.e. certification of the fact that the written application code is actually consistent with the agreement reached between the involved parties.

Although undoubtedly there are some critical issues to be addressed, smart contracts are destined to spread pervasively. Business Changers offers its clients services related to smart contract writing and verification of the application code produced by others in terms of coherency with the agreement between the parties.

    1

  • Smart contracts are the transformation of the traditional contract into the digital world. More precisely, the smart contracts are contracts programmed through application code (for example, Solidity on Ethereum) that allow to execute automatically the contractual terms without human intervention

  • 2

  • Smart contracts generate important business benefits, optimizing processes, reducing errors and potentially eliminating disputes between the parties. At the same time, smart contracts present risks, due to the possibility of errors in the application code and the presence of security holes

  • 3

  • Business Changers help its customers mitigating the risks linked to the smart contracts adoption, writing the application code and verifying / certifying that the digital version of the contract is actually consistent with the agreements reached between the parties