Smart Contracts and Blockchain

Authors:

Gary Rowe – CEO / Principal Consulting Analyst

John Myracle – Principal Consulting Analyst

Abstract

This is a level-set for enterprises assessing smart contracts and possible synergy with blockchain. Blockchain has advanced from being a foundation for Bitcoin to a platform supporting a wide variety of distributed services. This transformation has been driven, in part, by the introduction of smart contract programming methods and techniques. Smart contracts have also advanced dramatically in the past few years and starting to be evaluated by large enterprises.

Blockchain-based smart contracts are designed to automate and provide an immutable record for the exchange of a broad spectrum of assets without requiring a third party. Cloud providers such as IBM and Microsoft are investing heavily in this area. Areas such as electronic health records access, insurance claims processing, royalty distribution, securities trade clearing, and supply-chain management have all been touted as potentially benefiting from being built on these Blockchain-as-a-Solution (BaaS) platforms.

This report describes smart contracts and highlights some of the current opportunities as well as barriers to be navigated for enterprises considering investments in this area. We’ll examine the current and expected future state for smart contracts and define the steps enterprises can take to be prepared to move into this space.

This report provides is an introduction to the concept of smart contracts, describes the synergistic relationship with blockchain, describes a few early enterprise use cases, and explains how smart contracts are intended to operate. We’ll also describe key areas of caution as both the technology and supporting systems are immature and largely unproven at scale. We include a set of specific recommendations as to how organizations can effectively and efficiently move forward with smart contracts and blockchain and be prepared to act quickly when the time is right.