You can imagine how much time smart contracts would save you just by looking at the upsides.

Trusting code may assure the parties involved by providing a more clear-cut distinction that determines when the contract should be executed. But this can be a limitation if someone needs to make changes to the terms of agreements halfway through the process.

Let’s talk about the downsides.

Difficulties changing the conditions

Smart contracts are typically impossible to reverse once deployed on the blockchain. If someone changes their mind after making a transaction, it cannot be reversed.

The ability to reverse one’s actions, really depends on how the smart contract has been written. So, some room for flexibility would need to be built into the smart contracts under certain conditions. For instance, a condition could be to require both parties to sign the terms of the contract again by a certain time period to ensure that they want to confirm and move ahead with the process.

Human Errors

Smart contracts are written by humans, and humans are prone to making mistakes. 🤖

There is always the possibility for developers to make a mistake when coding a smart contract, which could lead to problems when transactions are taking place.

The risk of errors can be mitigated by having the code peer-reviewed by other developers first and testing it on a testnet before it is fully deployed.

Some projects go even further to identify any issues or vulnerabilities by offering bug bounties. This way, it ensures that the code is thoroughly checked by multiple people, increasing the likelihood that any mistakes are caught and resolved before the smart contract is deployed.

Final Thoughts

Despite the potential for errors, the ease and speed at which smart contracts work make them a compelling technological innovation. As the use cases for smart contracts are still being explored, we can expect to see more developments in the years to come.

For now, smart contracts are mainly used for native web3 applications like cryptocurrencies, DeFi, and NFT projects.

Just remember that the potential for smart contracts extends far beyond these use cases.