A summary of Smart Contracts In the Global South

Nir Kshetri et al. IEEE Computing Edge, October 2022 DOI [0]

Table of Contents

• A summary of Smart Contracts In the Global South
  • Table of Contents
  • Summary
    • Contract Laws And Their Enforcement In Southern Countries
      • Transaction costs Associated With a Contract in Southern Economies
    • Smart Contracts And The Role Of Blockchain
    • Barriers And Challenges
  • Citations

Summary

“Southern countries” refer to developing nations or countries.

Smart contracts are programs written on a blockchain that are executed once certain conditions are met. These contracts could be used to enforce contract laws and benefit economies in Southern countries.

Contract Laws And Their Enforcement In Southern Countries

Formal contracts are legal documents that lay out the rights that parties are entitled to, the rules they are bound to, and the punishments that they will experience if they break any rules. Southern countries often do not engage in formal contracts. Rather informal, repeat agreements are often enough to create a sense of trust between parties. However, as economies improve, the need for formal contracts arise as huge investments are often made to support the growth of these economies.

Transaction costs Associated With a Contract in Southern Economies

Both judicial misconduct and judicial error occur around the world. Judicial misconduct is when a corruption-related action is taken by a judge. Judicial error is when the courts make an error.

Smart Contracts And The Role Of Blockchain

Contracts are difficult to enforce outside of small communities in Southern countries. Smart contracts were envisioned in the 1990s, but prior to the blockchain were rarely utilized. Pre-blockchain smart contracts relied on cloud computing, but in Southern countries, that might not be available or reliable.

However, block chain based smart contracts work on a distributed network and can be enforced as the rules and policies are described within the contract. These smart contracts can be written above or on the block chain. Above the block chain means that data is fed into the block chain. Whereas on the block chain refers to the smart contract existing on the block chain. Regardless, smart contracts require oracles that provide information outside of the block chain into the smart contract to enact changes or code.

Barriers And Challenges

Currently, there are not block chain specific or governing bodies that are standardizing or regulating smart contracts. It might not be possible to regulate or standardize smart contracts as well.

Large populations within Southern countries lack internet access, making smart contracts difficult to enact in the first place. There is also a general lack of blockchain developers and engineers.

Citations