Are Smart Contracts the Future of Fraud Prevention?

What are your opinions?

Will blockchain replace financial or insurance institutions? Not a chance, but they are preparing for the impending disruption to their revenue streams and many institutions have started working on blockchain projects.

Yes. Because blockchain keeps the record of an asset transfer, any type of misappropriation can be detected by tracing through the blockchain

Blockchain-based platforms remove intermediaries and create peer-to-peer relationships that don’t rely on an entity like in a centralized system. Blockchain platforms turn each user into a data storage unit that acts as a fail-safe against single-point failure as well as an observation point to prevent misuse and fraud.

Smart contracts to be precise Ethereum smart contracts have a very solid future. Actually, the future of smart contracts is literally here, look at the new generation @shanzida they have a totally different mindset. They don’t want to have an intermediary person between them. On top of they have good grasp of upcoming technologies. The only issue which am sure someone is likely to pinpoint here is the issue of scalability which of course will soon be resolved with sharding and the Plasma framework

@jedida said in Are Smart Contracts the Future of Fraud Prevention?:

Smart contracts to be precise Ethereum smart contracts have a very solid future.

Definitely!!

Yes, to a greater extent!

Blockchain smart contracts eliminate the human intervention which is the key source of the frauds and corruption.

Smart contracts are the programs which eliminate the human intervention. The Smart contracts once created and deployed cannot be modified by anyone including the creator. There is hardly any scope to tamper the program or data or influence the system. There is no chance to flout the rules and get personal favor.

@mk-hasan said in Are Smart Contracts the Future of Fraud Prevention?:

Blockchain smart contracts eliminate the human intervention which is the key source of the frauds and corruption.

You have find out a great point indeed

@mk-hasan said in Are Smart Contracts the Future of Fraud Prevention?:

Yes, to a greater extent!

How do you know some one really owns a physical asset in real world even though their ownership of the corresponding digital asset inside a blockchain is verified?

@mk-hasan thank you for explaining smart contracts so well!

@nicolaortiz said in Are Smart Contracts the Future of Fraud Prevention?:

Blockchain-based platforms remove intermediaries and create peer-to-peer relationships that don’t rely on an entity like in a centralized system.

That is why it is getting popular day by day.

Smart contracts already bring a lot of qualities that prevent some types of fraud. Embezzlement where someone with legitimate access uses it to secretly siphon value out of a system is blocked. Many types of fraud come under this umbrella. For example, giving someone a discount because they are a friend or took you out to dinner drains value from the system.

But to really reduce fraud, smart contracts need two more things that are only just being developed at this time. The first is a successful and broadly trusted solution to "Identity on The Blockchain". A well implemented solution will include biometric data, third party attestation, and qualification attestation. Being able to prove who you are dealing with will have a significant impact on fraud prevention. https://id2020.org/

The other thing that is still under development is the interface between smart contracts and the real world. Oracles are the name of the technical solution that provides reliable information to smart contracts on the blockchain. Unfortunately most oracles are only effective and trustworthy with online data such as stock prices, account posts to Twitter, or cryptocurrency trade information. When it comes to proving that a piece of land is vacant and does not flood, or that a diamond is really the quality and carats that it is claimed to be, oracles are not there yet. There are some interesting projects for oracles that supply location data that has gone through attestation processes. So the journey has begun. But we have a long way to go and I believe the IoT has a role to play in it.