In the ever-expanding modern global economy, international deal-making is an integral part of trading, investments, and exchanging value across national borders. Dealings on a domestic platform are easier to conduct, where contract-driven activities can be verified in person and more reliably, without leaving much room for fraudulent activity or valuable information to be compromised.
For international economic ventures to proceed, contracts must be signed and managed remotely. This may prove to be a dubious notion when operating with the help of today’s array of unstandardized and haphazard online circuits, which can often prove inauthentic and put either or both parties at risk. Signatures can be superimposed illegally, data can be stolen, and the overall sanctity and confidentiality of the contract violated, not to mention the harried process of maintaining these relationships. For these issues and more, blockchain is increasingly considered a fitting solution.
The Status Quo is Stuck
One will encounter several counterintuitive digital infrastructures online when attempting to locate desirable personnel and contractors. These include posting advertisements in local forums or websites like Craigslist. There are often delays in delivery with little accountability, and few records to prove the reliability of applicants.
Foreign exchange regulations often hinder the flow of broader online dealings as well, and can put significant roadblocks in the timely completion of a contract. Often the wait for a payment to be processed lasts for days, and the banks involved on either side may unduly halt payment processing, owing to rigid governmental mandates. Platforms like Upwork, Freelancer, and PayPal impose draconian rules on contractors and vendors, requiring minimum deposits and taking absurd fees. Dispute settlements on these platforms can lead to sizable monetary losses for either party involved and are often drawn out, crippling smaller businesses who suffer from greater exposure to cash flow volatility.
Start-ups and other smaller businesses also use content management systems and other traditional platforms like email to maintain contracts with their clients and employees, make economic transactions, and guide personnel. These carry the risk of hacking, levy fees, and insist upon a level of maintenance that adds to overhead. Keeping these hindrances in mind, it is evident that one needs a more autonomous solution for smoother dealings across the world: a medium that will help overcome the hiccups and larger shortcomings and guarantee security for all involved.
How Blockchain Can Help
Blockchain is a distributed ledger that decentralizes deals in a way that encourages transparency and autonomy, without the threat of hacks or hefty fees. Professionals and businesses across numerous fields of work will soon be able to transact via platforms like Confideal, which put a familiar interface on the once-complicated process of creating smart contracts. These blockchain-based agreements allow two parties to exchange value based on a set of conditions, and blockchain can automate their operation without oversight because of its data irrefutability.
There is no longer an advantage in hiring an intermediary to enforce proper conduct in business relationships. A Confideal blogpost explains that prior to the mass adoption of smart contracts, their legal status needs to be assessed in order to choose the appropriate smart contract model suitable for a particular jurisdiction. “To put it simply, code is not law, but smart contracts created on a platform enabling the execution of said contracts and dispute resolution may be one.”
There is greater transparency in conducting dealings through blockchain technology. The permanent ledgers in a blockchain environment require transactions to be permanently recorded, and the cryptographic standards in use make it impossible for third parties to hack or compromise deals. Data tampering is impossible because of the strict node consensus rules required to alter blockchain entries, and every transaction is easily trackable, complete with validated digital signatures that keep everyone accountable.
As blockchain is a decentralized solution, it naturally eliminates the role of middlemen in helping recruit service-providers and removes the risk of costly mediation. It also drastically reduces the time spent in looking for potential clients and employees. Dealings can be done directly between participants, creating a truly free market exempt of mediating parties. Forex regulations are also irrelevant, and stringent government oversight of economic deals can be bypassed, which helps boost smaller businesses.
Concerning contract arbitration, an unfortunate necessity in some cases, the two parties involved must rope in an external third-party arbitrator one who is objectively unaware of the terms of the smart contract and its details. Smart contract platforms can provide a rating system for arbitrators so that clients can effectively choose arbitrators of superior quality. Platforms such as Confideal give parties equal footing when negotiating and arbitrating, removing asymmetric dynamics and ensuring the most optimal outcome in any situation for both signees.
The New Deal
What will the future of online dealings look like? An e-commerce store will be able to easily set up smart contracts with its vendors to automatically withdraw cryptocurrency, fulfill inventory, or onboard new products. Arbitrators with experience can specify their skills and services (including language preferences, experience, and other personal markers) so that the store can find them if necessary. Even finding outlier skills will be simple, like hiring a Korean-speaking arbitrator with knowledge of real estate laws in Florida, USA.
By helping contracting parties to save considerable time and money, and avail of higher efficiency in such transactions, blockchain will further empower individuals and businesses (small and large alike) to gain greater control over the exchange of products and services, with the ease and security of negotiating face to face.