Smart Contracts Improve Data Quality, But Limits Data Availability: Study
The use of Blockchain smart contracts by organizations will potentially benefit from associated increase in the overall data quality, but will also reduce the data availability, according to a study conducted by research firm Gartner, Inc. It will be the same for both externally imposed or voluntarily adopted smart contracts.
Gartner predicts that organizations using blockchain smart contracts will increase overall data quality by 50 percent by 2023, but reduce data availability by 30 percent.
Smart contract is a computer program or protocol, typically running on a blockchain, that facilitates, verifies or executes business processes triggered by events, on-chain transactions or interactions with other smart contracts.
However, the terms and conditions within the smart contract and the governance frameworks for blockchain participation dictate the availability of the data generated from the smart contract transaction.
The study shows that the decrease in overall data asset availability would have a negative effect on participants on the blockchain and they could be better off without participating in the blockchain, having access to all data.
Meanwhile, the adoption blockchain smart contract should enhance transparency, speed and granularity of analytical decision making as the data on the blockchain is more accurate, reliable and trustworthy due to its continuous verification.
Blockchain smart contracts are immutable and irrevocable through nonmodifiable code, which enforces a binding commitment to do or not do something in the future. They promise a near certainty of trusted exchange.
Smart contracts eliminate third-party intermediaries and their fees, as smart contracts perform the intermediary functions automatically.
Gartner analysts recommend that organizations begin to pilot blockchain smart contracts to automate a simple business process, such as non-sensitive data distribution or a simple contract formation for contract performance or management purposes.
For a start, Gartner says organizations should use smart contracts to automate multiparty contracts within a well-defined ecosystem, such as banking and finance, real estate, insurance, utilities, and entertainment.
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