Top 12 Smart Contract Use Cases


Do you want to know about smart contract use cases? If you do, then you have come to the right place.

Smart contracts are the digital version of legal papers.

Doesn’t this sound interesting? Of Course, it does.

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If you are new to smart contracts, you might not be sure of what it is capable of.

In this article, we will try to clear your confusion by sharing the best smart contract use cases out there.

Smart contracts are the result of blockchain evolution. With the invention of blockchain via bitcoin, it was clear that it is the primitive type of blockchain technology. However, it did introduce the powerful concept of decentralization and how it can be used to solve a multitude of problems across different industries.

With time, Ethereum was released by Gavin Wood and Vitalik Buterin in 2015. It started the second generation of blockchain technology which introduced new concepts and techniques to handle distributed ledgers. One of those techniques included smart contracts that brought automation to the whole blockchain network.

To facilitate the process of writing smart contracts, it also introduced scripting. One such language that can be used to write smart contracts in Solidity. Other smart-contract languages also let a developer write and deploy a smart contract.

Let’s define smart contracts to get a better understanding.

What are Smart Contracts? And, How Do They Work?

Smart contracts can be defined as a paperless digital code that offers a set of promises on predefined conditions that the parties have agreed to.

In simple words, the parties can set a condition which when met can start an action or a series of actions.

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Smart contracts can be used in a real-estate deal. Both the parties (buyer and seller) can create a smart contract that can automate the deal once the buyer pays the property value to the seller. To make all of these happen, the property first needs to be digitized on blockchain technology. Once done, both parties can carry their deal using smart contracts.

This simple idea is more than enough to automate tasks or the whole network such as decentralized autonomous organizations that utilizes a set of smart contracts. However, this idea always doesn’t end well. The DAO event didn’t end well as a hacker stole $50 million. To curb the problem, the chain was split using a hard fork. You can read more about it here: Does the recent DAO hack of Ethereum mean that the blockchain is not as secure as we thought?

If you want to learn about DAO, then check out Define DAO -The Decentralized Autonomous Organization.

Finally, if you want to learn more about smart contracts, then read Smart Contracts: The Ultimate Guide for the Beginners.

Benefits of Smart Contracts

Our next section deals with the benefits of smart contracts. By learning about its benefits, you will be able to make the most out of what smart contracts have to offer and hence get a better understanding of smart contract use cases.

The key benefits of smart contracts include the following:

Autonomous: The biggest benefit of smart contracts is the automation that it offers. In simple terms, it means that it is interruption-free and no third party can make changes in the agreement and decision. This automation can go a long way as it helps organizations to automate certain aspects of their business. Not only that it resolves issues in some processes where trust is an issue.

Secured: Another aspect of smart contracts that makes them amazing is its security. It enables processes to work in a secure manner. The encryption also makes smart contracts work as intended. As smart contracts run on networks with immutable data, the data generated by them cannot be changed or altered in any way. This way, all information is kept secure.

Interruption free: Smart contracts are interruption-free. This means that once they are started execution, they cannot be stopped or interrupted.

Trustless: The whole system is trustless. This means that there is no need to trust other parties. Sounds counter-intuitive? Well, in simple words, it means that there is no need to trust the parties to carry out a transaction. A transaction or a trade does not require trust as its integral part. As smart contracts run on a decentralized network, this means that the whole network is trustless.

Cost-effective: Smart contracts make transactions more cost-effective. This is done with the removal of intermediaries from the process. By doing so, it makes the transactions faster and also removes the cost associated with it.

Fast performance: The autonomous smart contracts executed way faster compared to the old fashioned traditional approach. As all the parameters are already defined within the smart contracts, it only needs to match them before it starts executing.

Accurate and error-free: Lastly, smart contracts are error-free and accurate. The only issue is that they need to be coded correctly so that they execute error-free. For example, if you are filing your taxes, you can make errors while doing so. However, if you use a smart contract to do it for you, then it will be an error-free approach.

Smart Contract Use Cases

smart contract use cases

Digital Identity

One of the most obvious smart contract use cases is Digital Identity. Individual identity is one of the biggest assets for that individual. It contains reputation, data, and digital assets. The digital identity, if used rightly, can bring new opportunities to the person. Also, digital identity can also help protect the identity from counterparties and enable him to share it with companies that he intends.

For now, the internet allows you to connect to multiple services, but at the same time, unknowingly sharing your identity with the companies and they’re associated with having your identity mapped.

In this case, smart contracts can help counterparties to learn about the individual without the need to know their true identity or verify transactions. This frictionless KYC can help improve interoperability, resilience, and compliance — all with the use of smart contracts. 


Another useful smart contract real use cases include securities. With smart contracts, capitalization table management can be simplified and improved. This means that there are no intermediaries between the parties including security custody chains. It can also be used for dividends, automatic payments, liability management, and stock splits.

Also, smart contracts can help reduce operational risk and make workflows digitized.

Trade Finance – International Trade / Cross border Payments

Trade Finance can also be revolutionized with the help of smart contracts. There is no doubt that it can help in international goods transfer and trade payment initiations with the use of a Letter of Credit.

Clearly, using smart contracts will improve the liquidity of the financial assets, in return, improving the suppliers, buyers, and institutions’ financial efficiencies.

To make smart contracts work in Trade finance, especially in cross-border payments and international trade, it is necessary to find an industry standard and implement it accordingly.

With proper integration, it can surely solve legal complications and offers a better way to solve disputes among parties.

Financial Services – Like Loans And Mortgages

Smart contracts can also help improve financial services including mortgages and loans. To do so, it can connect the parties and ensure that the whole process can be completed in a friction-less way. Moreover, it also provides an error-free process. For instance, the smart contract set up to handle a mortgage can manage it by tracking the payments and releasing the property when the whole loan is paid off.

There is one more benefit from using smart contracts in financial services which include visibility to all the involved parties.

This use case also falls under the Ethereum smart contract use cases.

Financial Data Recording

Financial data is very important for any organization. And, this is where the smart contracts come in. They provide the necessary way to data records for a more accurate and transparent financial data collection. With smart contracts, it is easy to manage the uniform recording of data across an organization resulting in reduced auditing costs and reporting.

Finally, it also results in reduced accounting costs and better interoperability among legacy networks and distributed ledger networks.


Smart contracts help automate. That’s where it can help the government to manage operations. One of those operations includes land title recording where the government can use it to do property transfers. 

Land Title Recording requires parties to transfer property with efficiency and transparency. Smart contracts can help do so. Also, using it will reduce auditing costs and also improve transparency within the whole system.

Another use-case for government including electronic elections, the digital identity that we discussed earlier and electronic record filing.

Governments can explore more smart contract use cases based on their requirement.

Supply Chain Management

Supply chain management is a great blockchain smart contract use case. By using smart contracts, the supply chain can be improved manifold. For example, it can be used to track items within the supply chain with full visibility and transparency. A business can use smart-contract powered supply chains and improve its inventory tracking to a granular level.

It also improves other aspects of the business which are directly connected with the supply chain. Moreover, using smart contracts also means a reduction in verification and enhanced tracing results in fewer frauds and thefts. However, to make it work, the institutions need to add additional equipment including sensors to their supply chain.


Insurance has always been one of the most use-cases of smart contracts. It is a known fact that most of the disputes happen in the insurance sector. For example, let’s take auto insurance as an example. Here, smart contracts can be used to settle the insurance as soon as possible.

To do so, smart contracts need to utilize a lot of technology including Internet-of-Things to facilitate itself. The smart contract will not only facilitate the policy but also make sure that it has all the proper documentation including driver reports and driving records with the use of the technology. If the smart contract is set up with the right policy, documents and ways to capture data, it can execute itself shortly after the accident. Also, smart contract execution is only done based on the collected data which ensures that no fraud is done in the process.

The insurance sector can genuinely take advantage of smart contracts and hence is one of the best smart contract use cases out there.

Clinical Trials

Clinical trials can also improve with smart contracts as they can improve cross-institutional visibility. Also, it can automate the data sharing between institutions thanks to the automation and privacy-preserving computations it can do.

Moreover, smart contracts can also be used to automate the trials and share the information across-industry. To be precise, it can help in identity, authorization, and authentication of the data.


The last use-case that we are going to discuss is escrow. Escrows are the process of storing value between the parties when the contract is still active. For this, the action is taken by the payer to release the funds. However, in the case of smart contract usage, it will be possible to automate the whole thing as soon as the service provider submits its work and authenticates its genuinity.

The smart contracts can be very useful for platforms such as Upwork or other freelancing platforms where the escrow amount is held by the platform itself.

Record storage

Smart contracts can be used to record information and also do digitization of real-world assets. It can be used to not only store the records but also renew them and release them according to the set parameters. All of these can be done automatically.

Trading activities

Another use case of smart contracts in trade finance is trading activities. In this case, the middleman or broker is removed and his work is automated with the smart contract. This removes the additional cost related to them.

Mortgage System

Smart contracts can be effectively used in the mortgage system. It enables mortgages to be automated and ease both the owner and the buyer. To make all of these happen, smart contracts need to be coded according to the mortgage agreement. Once done, the smart contracts can be set into motion and each step in the process can be automatically executed. The whole process is fast, cheap and easy.


This leads us to the end of our smart contract use case article.

Smart contracts are essential for our economy as they can provide the necessary automation for decentralized platforms. Smart contracts provide a unique way of solving problems including escrow, clinical trials, insurance, government processes, and so on!

All these use-cases also fall under the Ethereum smart contract use cases and blockchain smart contract use cases. So, if you are looking for those, then the article 

We also went through the features of smart contracts so that you can understand the smart contract use-cases better. 

So, what do you think about them? Do you think that smart contracts can change the world for good? Comment below and let us know.

About Author

Nitish holds a BSc in computer engineering. He is a blockchain enthusiast and in spare time likes to read about the moon. His articles have published on Dzone, InfoWorld, and Hongkiat.

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