Integrating a Smart Contract
During the last few decades, brands and retailers have been tackling the digital transformation and the new technologies that come with it. Each new technology is created with the goal of reducing friction and empowering both you as the seller and your buyers. Brands and retailers have never had as much insight and data into their customers’ behaviors, and consumers now have infinite amounts of product information.
The next big technology to transform the way we do business is Smart Contracts. Smart contracts are coded agreements between two or more parties and stored on a decentralized blockchain server. If AI-enabled, they can analyze past contracts to identify loopholes and create more effective and reliable contract templates moving forward. AI agents can even act on behalf of each party and negotiate terms based on specific parameters set by the parties.
Finance, insurance, real estate, and shipping industries have all started to make use of smart contracts. For example, in the ecommerce world, you rely heavily on a positive shipping experience to retain customers. Smart contracts will reduce the risk of undelivered packages, lost product, and reimbursements. Additionally, you can use them to track shipments, inventory, and economic activity to predict market behaviors. You can also create an escrow smart contract that the customer can deposit into. The payment only goes through if the customer receives the package.
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To integrate smart contracts with your B2B ecommerce site, you will need a blockchain platform. The platforms are typically layers on top of existing blockchain networks. Many blockchain integrations use Ethereum as its blockchain network. The network is open-source, which allows developers to create a market, store registries of debts or promises, and move funds without a middleman.
Other blockchain networks include Stellar and EOS. Stellar focuses on cross-border transactions that only cost fractions of a penny. EOS aims to be a decentralized operating system that can support industrial-scale decentralized applications. The EOS team claims to have the ability to conduct millions of transactions per second—all with zero transaction fees.
Blockchain is still a very new technology—as a result, there are not many integrations for ecommerce sites. However, there are a few that recently launched or will launch in the near future: Jincor, Agrello, and Zap.
Jincor is set to launch in November of 2018 but already has thousands of businesses using its beta platform. The platform allows businesses to work with smart contracts and cryptocurrency payments with no legal, technical, or operational complications. Jincor target customers range from small and medium size businesses to large enterprises that handle international activities.
The Jincor team created a simple and intuitive interface for creating and signing contracts using the Ethereum blockchain network as its base. The platform includes a library of smart contracts templates that are applicable for various types of businesses and countries legislation. As a user, you can modify the templates by setting parameters and contract terms. Similar to banks, the Jincor team offers legal support for cryptocurrency transactions.
Once your company registers with Jincor, you receive a profile, which is verified by its partner companies including banks and law firms. The verification provides proof that the company exists in real-life. After Jincor officially verifies the company, you would receive access to enterprise cryptowallets, smart contracts templates, and other features.
In addition to the smart contract templates, Jincor offers cryptocurrency payment integration and digital arbitration system work. The digital arbitration system provides judgments on unclear matters related to smart contracts performance. According to its site, the development costs range from $5,000 to $10,000. They plan to reduce the cost per contract by $100 to $500 by removing the need to program each contact and making it easy to use if you are a non-technical user.
Agrello, another platform that uses Ethereum, enables you to negotiate and execute legal smart contracts just by using your mobile phone. You can integrate the platform using an API, allowing you to formalize and sign documents with a few clicks.
To use Agrello, you need to create a reusable virtual avatar which acts as your representation on the internet. The Agrello ID is a cryptographically secured digital identification solution supported by an advanced identification process. To create the virtual avatar, you need to provide a picture of a valid government-issued document, such as a passport or driving license, and a video of you holding the identifying document.
The identification process uses the image, video, user location, and device fingerprint to ensure the authenticity of the application and minimizes fraud. Once granted, Allegro stores the ID in the blockchain. You would then create a six-digit signature code which is used to authorize actions and sign agreements. The server computes a hash based on your signature and signed agreement using algorithms and placed into the blockchain.
Similar to Jincor, Agrello has a template library where legal experts share best practice contract templates. Because the team uses legal experts, this ensures high standards of legal practice through reputation and review mechanisms. You pay a fee to the creator after the contract template is proven successful—creating a strong system of incentive. You can also adapt the templates to fit your exact needs.
Unlike the other two platforms mentioned above, Zap smart contracts can be triggered by real-life events (typically, outside events cannot affect what is happening inside the blockchain). Zap uses oracles, which provide the connection between real-world data and the blockchain. The oracles turn the external data into a format that smart contracts can understand, enabling smart contracts to trigger tasks based on outside events.
Non-technical users can use Zap, making it an ideal platform if your business benefits from robust real-time data feeds. While you do not need coding skills to publish or subscribe to data, you do need the technical know-how to create smart contracts that use oracles.
The platform uses the Web3 API, which allows you to interact directly with your Ethereum wallets and removes the need to hold other users’ funds. IPFS (hosted server) acts as the decentralized file storage mechanism, and WebRTC provides real-time P2P communication and routing of data.
Smart contracts are poised to transform the way we do business and experts believe the new technology is here to stay. By integrating smart contracts, you will likely reduce friction in fulfilling agreements, reduce legal fees, and prevent future contract issues. This provides B2B companies an opportunity to grow and scale their businesses, simplify day-to-day operations, and shift resources to higher priorities.
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