We all come from an age where something like a digital transaction was just an illusion. But now technology has improved a lot and changed the world to a digital space where everything is now digitalized, people are exploring and are busy finding new possibilities on the Internet.
Blockchain technology is the most innovative and cutting-edge technology that has ever been made, as we all know it’s decentralized and difficult to truncate the code. The well-known cryptocurrencies like Bitcoin, Etherium are fewer examples of well-developed blockchains. These types of digital currencies are used for transactions, crowdfunding, MLM businesses, etc.
Multi-Level Marketing is a business of selling products directly to the customer via a distributor, without a middle man involved. These distributors are paid with certain commissions for their sales, and they can recruit new people as their downlines earn more commissions, bonuses, etc. So we can tell that MLM business is well adapted and suitable to transform to a decentralized business model that is backed up by a smart contract.
These Smart & digital contracts help in the removal of the third parties, reduce unwanted expenses, provide higher security, etc.
Smart Contracts in detail
Smart contracts are just digital contracts that are mainly used for avoiding a third-party appearance during any money transactions. In the early 1990s, computer scientist Nick Szabo developed the Smart contract and later attached it to a Blockchain. He calls this contract “a set of promises, specified in digital form, including protocols within which the parties perform on these promises”.
However, unlike the manual contracts that we may have already seen in a printed paper, these Smart contracts are certain codes that are developed by the language called Solidity. It is an automatic Contract that has its own policies and is written in codes.
A smart contract is a self-executing contract that is introduced between a seller and buyer. For example, in a crowdfunding project that is managed by a smart contract created in the blockchain, The funds are collected from the supporters by means of online gateways, the supporters transfer their money to the contract. When the contract gets the full fund it transfers the fund automatically to the project team. The contract will hold the fund until the goal is reached, if the project fails in reaching the goal the money automatically returns back to the supporters.
Smart Contract in MLM Business
MLM or Network Marketing is a business model that is managed and tracked by MLM software. One of the important problems that we face in an MLM business is the lack of transparency. A smart contract can help to wipe out these sorts of issues to make the entire process transparent with supporters.
Why should people trust Smart Contracts? It is because it is using blockchain technology and everything is decentralized and the contract is immutable. ie. Once a contract is created it can never be changed unless the contract itself has any exception access policies.
Due to the distributed nature, the contract should be validated by everyone in the network. Thus a single person cannot force the contract to release the fund.
The ultimate transparency avoids the trust issues and clears the concern of people to participate in the Dapps.
Benefits of Smart contract in MLM business
- High security
- Increase transaction speed
- Avoid malpractices
- Reduce overall expenses
- Multi-currency support
The key takeaways
- A Smart Contract does not involve a third party validation
- The funds will be automatically transferred within minutes
- Highly secured as it is connected with blockchain