The Global Smart Contracts Market is expected to grow at a steady rate of 32% as per forecasts by the year 2023. As a market highlight, the market for smart contracts is expected to rise steadily. Today, the importance and popularity of smart contracts in the global payment industry especially like the gem & jewelry supply chain are increasing with leaps and bounds. The working principle of smart contracts is very efficient and does not require the involvement of third parties and lawyers to validate the same transactions. The introduction of smart contracts ensures that no middlemen are involved in the entire transactional ecosystem.
A brief summary of how a smart contract works –
The two parties being involved in the entire contracting process have to match the terms and conditions being set for the transaction to get validated. Such contracts are registered with a database and all the legal standpoints are automated within it. The asset concerned in the contract is completely digitized and the payments are conducted through crypto-currencies or digital assets.
The smart contract endows the user with unmatched autonomy, speed, accuracy, safety, and backup. Thus, the smart contracts mitigate a significant amount of risks involved in the payment process which would otherwise expose the system to potential threats.
What are the risks involved in going for alternative methods of payments using the remittance model
- Rise in cost of transactions
- Access to sensitive customer information from third parties
- Risk of hacking and other fraudulent activities increase along with the Third Party Payment clearance models
- High risk of money laundering and other financially disruptive activities
How smart contracts would transform the complexion of the gem & jewelry industry
There have been several pain areas identified within the ecosystem of the gem & jewelry industry which need to be addressed through a technological transformation. The incorporation of the smart contracts market will bring about a major transformational effect through a secured transactional model.
The secured ecosystem will help in establishing a unique – Blockchain-powered
- Trust chain – The trust chain established by the smart contracts with the usage of Distributed Ledger Technology would incorporate a smart ambient trust chain. The trust would be carried forward from the previous buyer to the next buyer. However, all buyer related information would remain intact within the ecosystem of the blockchain.
- Continuous Distributed Ledger – The continuous distributed ledger technology ensures that all transactional details are stored within the ecosystem of the DLT. It ensures minimal fraudulence and duplication across the length and breadth of the gem & jewelry market.
- Traceability – The DLT network with Smart Contract mechanisms ensure complete traceability. A purchaser and a retailer can mutually trace every transaction right from its root. Thus, there can be no duplication and fraudulence down the supply chain.
- Authenticity – The smart contract mechanisms ensure maximum authenticity and transparency in the gem & jewelry trade. It becomes one of the most full-proof mechanisms available in the market to authenticate valuable gemstones and jewelry.
Smart Contracts will bring about a major transformational experience to the entire gem & jewelry supply chain.