Blockchain Smart Contracts—Removing the Middleman

Not a day goes by that we don’t deal with a promise to someone. We have to make a car payment, a rent of a mortgage payment, or we have to make an insurance payment. All are examples of dealing with contracts every day. Even when you pay for parking, you are given a receipt which stipulates your right to park and the parking lot owner’s terms of the agreement on their side.

Entering into a contract can be as simple as receiving a receipt for a purchase, or highly complex and expensive when dealing with a home purchase transaction, or when selling a business. And, there’s always cost and complexity of having to use an attorney.

What if the entire process could be simplified to reduce time, costs, remove lawyers from the process, or simplify the process by removing the need for such things like escrow, or having to be physically present to sign a contract—wouldn’t life be simpler?

That is the promise of smart contracts.

Image Source:
Image Source:

What are Smart Contracts?

“In the management of a relationship or as part of an agreement, business and all parties involved often put a contract in place. The contract defines the terms and conditions that apply in the partnership or relationship like Purchaser/merchant, tenant/Owner, subscriber/service provider.”  (Osetskyi, Victor)

A Smart Contract in the digital space is code that includes scripting language used to evaluate the terms of an agreement to meet a particular condition. In simple terms, it uses a conditional code logic to translate the agreement. “The code translates a set of rules that are automatically executed and validated.” (Medium)

“A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract.” (Wikipedia)  The smart contract enables the performance of trusted transactions without the need for a third party. (Wikipedia) It can help a user exchange money, property, or anything of value “in a transparent, conflict-free way while avoiding the services of a middleman.” (Ameer Rosic)

And—they contain the terms of the agreement between the buyer and the seller. The terms are written directly into the lines of the code. With the distributed ledger technology, the code and the terms of the agreement exist across the distributed, decentralized network.

In the end, smart contracts allows transactions and agreements to be completed among various and unknown parties without “the need for a central authority, legal system, or external enforcement mechanism,” (Investopedia) Trust is built in the smart contract because they can always be traced, and they are immutable—that is they cannot be altered.

Use Cases for Smart Contracts

While there are many areas of use case, for this article, I’ve highlighted four areas of finance and investments reviewed by Dolare.

Banking and Financial Services—Presently, smart contracts are part of the blockchain technology. They allow for faster cryptocurrency transfer. While many examples exit today, one example is IBM’s Batavia, completed two complete cycles of trades: one from Germany to Spain and the other from Austria to Spain. One banking use case, as reported by Capgemini, is the ability for smart contracts to cut mortgage costs cut costs from $3 billion to $11 billion annually. And—it’s estimated that adoption of smart contracts by mainstream banks could happen in 2020.

Insurance—One issue with insurance is the time needed to process a claim, which can take months. If policies were written into a smart contract, the manual work could then be automated.   With all the conditions recorded onto a blockchain—the smart contract can ensure all requirements are met. In the end, the insurance claim is automatically processed, without human involvement.

Real Estate and Land Titles Recording—Smart contracts can be used to purchase real estate. With blockchain, property records can be accessed with centralized registry. This will help to prevent fraud—thereby providing transparency and automating trust in the transaction.

Zap, a widely used online real estate platform, partnered with New York’s Bapple Realty to allow their real estate agencies to use blockchain smart contracts. The intent for to collect and divide commissions.

Authorship and Intellectual Property Rights—Artists may never see royalties because of piracy. More and more, artists and galleries are looking to blockchain as a registry for fine art. With smart contracts–Ownership rights can be registered on the blockchain.

When anyone uses the artist’s work, the smart contract would be used to make sure payments are made to the right owner, and to any other party, such as the gallery, as defined in the smart contract. .


When it comes to contract law it can be confusing, intimidating and costly. Smart contracts have a tremendous amount of promise in industry today.  It has the potential to remove many of the middlemen, reduce costs, and increase efficiencies.

Whether it’s for a landlord who can use a smart contract to rent their summer cottage in Pacific Beach, California from Miami, Florida, or it’s a struggling artist who need to insure proper payment for their art, smart contract, as a use case can help to simplify the lives of many business owners and entrepreneurs.



Dolare, “8 Smart Contracts Use Cases”,, , September 2018.

Osetskyi, Victor, “What is Smart Contracts Blockchain and Its Use Cases in Business”, Medium, June 2018.

Rosic, Ameer, “Smart Contracts: The Blockchain Technology That Will Replace Lawyers”, Blockchain Geeks, 2016.


Eric W. is a self-educated ghost writer who for the past seven years has been involved in Blockchain, Cryptocurrency, and Digital advertising sectors as Project Director, Miner, and NRA (Network Resource Application).

Contact Eric


Recommended Stories

New Coronavirus Stimulus Bill Introduces Digital Dollar And Digital Dollar Wallets

WHO Encourages Use Of Contactless Payments Due To COVID-19

Blockchain Digital ID — Putting People in Control of Their Data

Why Bitcoin’s Safe-Haven Narrative Has Flown Out the Window

Unknown miners take over Bitcoin SV blockchain

CasperLabs Pivots Away From Ethereum to Fundraise With Its Own Blockchain

New Coronavirus Stimulus Bill Introduces Digital Dollar And Digital Dollar Wallets