Scams have become an ongoing problem as of late for every sector. Technological advancements and societal improvements also provide new ways for hackers and fraudulent activities to disrupt businesses. To combat this, the rapid growth of blockchain technology has allowed the financial world to experience a sense of decentralization and transparency.
In order to challenge the potential trend of scams in the world of blockchain, experts at international law conferences, notably Law 2.0 Conference, have provided vital insight into the ongoing advancements of smart contracts.
Smart Contracts: An Introduction
Smart contracts refer to self-executing agreements with the terms of the deal written into the code. This particular code is stored on a decentralized blockchain, making it transparent to all parties involved and providing enhanced security. Deconstructing it further, the code for the agreement defines the terms upon which the contract can be executed to complete the transaction. The blockchain's decentralized nature provides a faster and more secure way to automate transactions.
A comparative example of a smart contract would be to analyze an investment opportunity. In said contract, funds would be held in escrow until the required criteria are met. The investor can utilize the ability to allocate funds in an automated & personalized manner:
- How Funds Should Be Distributed
- How Funds Are Utilized
- An Exit Plan For The Investment
The most pivotal factor is smart contracts provide an enhanced sense of transparency to the users. Being surveyed by blockchain validators responsible for varying the transactions within the network, smart contracts can ensure transparency of transactions. Being a transparent ledger in nature, blockchain transactions enable all parties involved to track and audit the execution of the contract easily.
Panel discussions at top international law conferences play host to industry leaders and law professionals, providing insight into the transparency of smart contracts, and explaining that the enhanced transparency makes it easier to detect and present scams as all parties involved can monitor transactions in real-time. Failing to meet the contract criteria would disable either party from committing scams & fraudulent activities, as they can be monitored by all parties involved.
Revolutionary Supply Chain
As a buyer, seeing the current supply chain grow and incorporate various sectors supplying to each other has been a welcome development. However, with an enormous supply chain, both figuratively and geographically, buyers have struggled to track all the incriminating details regarding orders that go out. Verifying every little detail can prove to be both inconvenient and costly. Although scams in major financial institutions tend to get more media coverage, supply chains are also riddled with fraudulent activities. Due to the complexities and unaccountable human error, supply chains are prone to scammers infiltrating transactions.
With the introduction of blockchain technology, upcoming conferences for lawyers, notably Law 2.0 Conference, are anticipated to help buyers regain assurance when it comes to verifying their transactions. With the ability to monitor every step of the way, the blockchain provides the following benefits to existing supply chains -
- Being immutable, blockchain technology is almost impossible to manipulate & alter.
- The origin of the product is easily trackable due to enhanced transparency via blockchain. This prevents blatant counterfeiting.
- Being a decentralized network, blockchains allow buyers & sellers to execute transactions seamlessly and in a secure manner, as the technology eliminates the risk of hacking and makes it challenging for any theft of assets/funds to occur.
Counterfeiting has been an ongoing global problem for as long as it can be remembered. Luxury goods, the food industry, pharmaceuticals etc. have been victims to the scam of counterfeit across multiple levels. Addressing the issues concerning authenticity and quality can prove to be a challenge with the complex and lengthy processes composing the traditional supply chain.
Transactions recorded on blockchain are immutable as they cannot be altered or tampered with. The code used to ready a smart contract cannot be altered once entered into the blockchain, making the possibility of scammers altering the initial code to manipulate the agreement impossible. Before any valid data can be uploaded onto the network, all users must verify every transaction, and only then can the contract be accepted, making it tamper-proof.
Replicating an identical product in the form of counterfeiting will only allow scammers to upload a separate asset of their own without affecting the existence of the original product already on the blockchain. Being able to track the origin of a product and its ownership history further solidifies the prevention of counterfeits being made.
With a reported $6.1 billion loss reported globally via identity theft in the year 2022, countless individuals and organizations have suffered. The finance industry, in particular, has tried using preventative measures for early detection of scams and fraudulent activities, unfortunately leading to inconclusive improvements, if any. Amongst a number of ways identity theft is committed, the three major ones are -
- Financial identity theft
- Medical identity theft
- Online identity theft
With the integration of blockchain technology, major sectors, especially the finance sector, hope to eradicate the ongoing issue of identity theft. Two major changes blockchain can help in erratically reducing the possibility of identity theft can be classified -
- Digital Identity- Seeing as blockchain is a fully monitored and decentralized ledger, any transactions or activity can only be updated once approved by all parties involved. This enables users to create a more secure and personalized verification process for access to personal information.
- Permissioned Networks- Creating global anticipation, legal professionals and experts engaging in innovative discussions at international law conferences have provided insight into the revolutionary introduction of permissioned networks. One of the biggest concerns for digital users today is the increasing exploitation of data privacy at the hands of big tech companies. Allowing users to determine the conditions for their personal data: where, how and for what purpose it may be used, blockchain can quite potentially change the game altogether when it comes to the protection of user data.
World leaders, such as Dubai, have a very stemmy road for users looking for justice involving some cases of identity theft. This has been brought to notable attention through the hosting of some of the most anticipated law conferences in Dubai, notably Law 2.0 Conference. Legal experts and researchers present at such conferences provide an insight into how, of the 76 percent of users who suffer monetary losses due to cyberattacks, only a minuscule percentage end up recouping a notable amount back. With the introduction of blockchain technology being accepted on a global stage, experts at upcoming conferences for lawyers hope to provide positive news regarding the rejuvenation of the justice system when it comes to data theft in countries such as Dubai, reassuring users to indulge in the technological advancements with a heightened sense of security.
Smart contracts are self-executing by design, enabling the agreement to be automatically executed once the terms are met. This eliminates the need for human intervention and decreases the possibility of human errors. In traditional supply chains, many buyers and sellers go through cases where one party does not fulfill their end of the deal, rendering the contractual terms void.
Chasing after said party can be not only costly and time-consuming but also very inconvenient with how global the manufacturing network has become. Being left to hang in a deal across a different sector in a different country makes the accountability factor very vulnerable when it effectively comes down to tracking a scammer down.
With smart contracts, both parties involved can ensure the execution of the agreement in a seamless and time-efficient manner. Seeing how these contracts function on a tamper-free code, buyers and sellers can be assured of a secure transaction, one where execution on one end is only valid once the other party complies. Automation of any kind, especially in such a secure way, is bound to excite legal professionals, as the amount of paperwork to be dealt with in their industry seems never-ending.
Secure Escrow Services
Another significant use of smart contracts is their ability to secure escrow services, as these contracts are immutable, and funds are only deployed once all conditions barring the contract are met. By acting as a neutral party, smart contracts decrease the risks of scammers intervening in escrow agreements and provide efficient escrow logic execution. With all steps of the transaction being fully transparent and monitorable by all parties involved, the need for an intermediary third party becomes nil, avoiding any scams by reintroduction of said third party.
Highlighting all the key benefits that smart contracts provide for escrow service executions, industry veterans taking the stage at international law conferences seem sure about the revolution smart contracts are already promising.
As businesses and technology continue to grow at a rapid rate, the loopholes in transactions for scammers and hackers to exploit increase as well. Having exposed deficiencies in traditional security and preventative measures over the last couple of decades, the introduction of blockchain and its use cases has the potential to completely revolutionize industries globally, especially from a security and privacy standpoint.
Although still in the early stages of integration, the promise shown by a decentralized network has been nothing short of remarkable. Problem-solving when it comes to helping users regain access to their data and having full consent over its monetization and use, one of the most notable ongoing problems globally, will be a development industry experts and leaders from all over the world will be touching base upon at upcoming conferences for lawyers, notably Law 2.0 Conference. Hosting a three-day event in the USA & Dubai, this conference will play host to some of the most renowned legal experts and veterans globally, engaged in keynotes and panel discussions, making it one of the most anticipated law conferences in Dubai!