Blockchain Smart Contracts: The Emergence of Co-Ownerships
- May 21, 2021
- Posted by: Aelius Venture
- Category: Blockchain
Smart contracts have directly resulted in a new level of stability, pace, and accuracy for investors. It gives investors’ confidence that what they’re investing in is reliable, which is critical in a market like precious asset co-ownership, where trust is a key factor. Blockchain smart contracts, which arose from the blockchain world, are ushering in a new era of legal agreements and are destined to become mainstream of legal practise.
Blockchain Smart Contracts
Smart contracts are computer script lines that function similarly to physical contracts with terms that must be met. When an agreement’s terms are finalised, the blockchain automatically and instantly implements the contract.
Smart contracts can perform transactions very easily since they are built on the blockchain and therefore live on the internet. Contracts can be organised quickly and across borders without the need for manual processes, streamlining the entire transaction process and adding enormous value to a working co-ownership economy.
Contracts must be clear in their terms and outcomes since they are legal documents. Since one of smart contracts’ primary functions is to record all terms and conditions in clear, immutable detail on the blockchain, there is no space for miscommunication or misinterpretation. As a result, they greatly reduced the amount of time wasted due to vague clauses and sentences. Smart contracts, in essence, assist in avoiding the pitfalls of unknown circumstances or occurrences.
The Value of Blockchain Technology
On the Ethereum blockchain, several smart contracts are written, including those at TEND. The Ethereum blockchain makes it simple to build customised agreements that can be stored on a decentralised and independently verifiable public record.
Smart contracts have a big advantage over offline contracts in that they are self-executing computer code, which means that both parties can be confident that they will be carried out free of human intervention. As a result, the system is both effective and reliable.
The blockchain provides a high level of trust in the agreements made. Stakeholders should relax because it’s almost impossible to alter or tamper with data without being detected. This, crucially, ensures that consumers and partners can be certain that the contract will be fulfilled even though they have never met the countersigner.
Ownership by a group of people
Co-ownership is a legal term in which more than one party owns an entity or asset jointly. Smart contracts allow for the “tokenization” of certain objects or properties, or the creation of fractions of them. Tokenization is thus playing a key role in the next evolution of the shared economy, allowing a large audience access to previously unattainable, valuable, and collectible items. Only a select few of the world’s wealthiest people can afford to buy and retain a million-dollar Aston Martin DB4. When you tokenize it so that 5 or 10 co-investors can split the cost, it becomes a much more interesting and open investment. In a co-ownership situation, smart contracts provide an efficient and repeatable solution for correctly conducting a selling or purchase transaction.
Importantly, smart contracts eliminate the need for arbitration in the event that anything goes wrong. Parties agree to follow the guidelines and determinations of the underlying code since they are self-executing. This ensures complete transaction transparency and provides investors with complete peace of mind.
Co-ownership is on the rise
The growing popularity of co-ownership can also be attributed to a desire, especially among the millennial generation, for an asset-light lifestyle in which life-enriching experiences take precedence. People can live this lifestyle while still investing in the valuable assets they want to enjoy thanks to sharing economy companies. Investing in a co-owned asset rather than purchasing it directly will provide investors with a much broader variety of opportunities and experiences. Why purchase a villa in Mykonos outright when you could own a quarter share in four properties around the world (and use the Mykonos villa just as much!).
To buyers, converting to a co-ownership model removes the difficulty of seeking a single buyer, making a very costly asset even more liquid. This model also helps owners to keep a piece of an asset to which they may have a strong emotional connection. An appealing proposition for an enthusiast looking to liquidate an asset (or simply share their passion) while maintaining a vested (though diminished) interest in.
More people, especially younger people, are becoming involved in investing in multiple co-ownerships rather than a single asset as a result of the modern trend toward an experience-driven lifestyle. As a result, there is an increasing demand for co-ownership, with smart contracts playing a key role in ensuring stable and reliable execution. Smart contracts have not only aided the growth of the co-ownership industry, but they have also ushered in the sharing economy 2.0, in which businesses and individuals can reach agreements quickly and easily and trust that such agreements will be immutably registered.