Firmo - Building Trust With Smart Contracts

Business is built on trust

One of the first things you learn as you enter the business world, is that efficient and profitable relationships are all built on a foundation of trust. This is especially apparent in B2B (business-to-business) relationships that have recurring transactions between each other. If you've been involved in any of the B2B transactions in an organization, you quickly develop a hierarchy of preferred organizations to work with. You quickly remember those who make the transactions easy and painless and dread working with the less competent or less reliable ones. This is one of the reasons why businesses work hard on hammering down process related improvements to try and be one of the easy to work with partners. This fosters growth and innovation as you begin to uncover the true potential that multiple cooperative forces can accomplish when things work smoothly. One of the hardest parts of these relationships to manage is how money and goods/services are transferred between agencies. To date, the reason for this difficulty has been pretty unavoidable. It all boils down to the need for centralized data management. Have you ever had a payment dispute between your business and another one? They happen all the time! Often times, one party ends up eating an expense to preserve the relationship that could have been avoided.

Source: Pixabay

This happens because each party likely stores transaction data on their own internal centralized database. When the time comes that one party requests payment and the other party claims payment has been sent already, sometimes things get complicated. In the majority of circumstances, a peaceful resolution can be discovered, often with expediency due to the desire for future business to not be impacted. When investigations are required it often leads each party down several avenues to confirm what exactly was agreed on and what exactly was delivered. Lately, we've seen a plethora of blockchain technologies that are poised to resolve this issue with the use of smart contracts. Storing these contracts on a blockchain offers an immutable historic view of who agreed to what and when payment was rendered. Using a blockchain technology with smart contracts means that either party can do a quick blockchain search to find in undisputed record of what happened. Among many benefits to this system, two of them stand out. First, it preserves relationships because there is no blame and little effort required to find the absolute truth of a transaction. Second, as a result of the first benefit none of the parties involved need to worry about getting the short end of the stick. Each party can confirm what is due and what has been transacted already so nobody "bites the bullet" to preserve the business relationship.

Why Firmo?

This type of trust and expediency between businesses is an incredible value, and it surely will cascade quickly across all kinds of agencies as soon as a certain market penetration is achieved. Once the market gets to the point that every business transacts with at least one business that uses blockchain technology for these smart contracts, it's going to spread like wildfire. As you recall, I mentioned that there were several blockchain technology projects based around smart contracts already so why place bets on Firmo? Firmo isn't actually a direct competitor to any of these smart contract platforms, but rather a complimentary platform. What Firmo provides is a user-friendly, concise, and secure smart contract language called FirmoLang that is blockchain agnostic. It already can be integrated with the Ethereum network to allow users to create smart contracts without having to learn Solidity. The FirmoLang commands are much shorter and much easier to learn than Solidity, and also provide the capacity for easy to use templates for those with no interest to learn how to code at all. On top of that, it's already working on seamless integration with some of the most popular smart contract platforms in crypto and will be able to accommodate other platforms as they become more utilized. Here's a simplified view of how it works, check out some of these names they are already working on integrating with!

Source: Firmo Website

Having a more user friendly platform that you can more easily/quickly code on and pivot between the most popular smart contract protocols is extremely valuable already, but there's another perk that's even more important. Firmo provides the capacity to perform derivative transactions. These are very common in the business world, according to the Firmo website, 1/7 of the world's economy operates as derivatives. There's no reason to suspect anything but an increase in derivatives in the future as companies become more data driven. Organizations have found that being able to accurately project future transactional responsibilities is extremely valuable and allows them to make intelligent data-driven decisions. Even in the case of a small bakery business, wouldn't it be advantageous to plan out future purchases of flour, sugar, and other ingredients that you'll need going forward? Wouldn't it be great to know exactly how much your going to pay for future purchases throughout the rest of 2018 regardless of how the market acts? What if the price of sugar increases by 20% throughout the rest of the year and you didn't plan for it? It makes sense to lock in a price, date, and terms for all your sugar purchases throughout the rest of the year at a rate you know is profitable for your business. The guaranteed recurring business is incentive for the sugar supplier to commit to a great price and everyone wins!

Source: Pixabay

This brings us full circle back to my point about business and trust at the beginning of this article. Since the price, the date, and the terms of the contract are set in stone on the blockchain, businesses are compelled to operate honestly with each other. Not only do they commit themselves publicly and immutably to the transaction at the risk of their reputation, but they also have the additional security of the contract only completing if they actually fulfill their end of the deal. Funds are locked into the transaction and can't be backed out of if the agreed upon product is provided. They also are inevitably going to find themselves operating more efficiently by having transparency on the transactions agreed upon in a decentralized and easily accessible blockchain. Operating costs are hard to cut in business and technologies like Firmo that can offer process improvements are extremely sought after. Look for Firmo to expedite the penetration of cryptos in the global economy in 2018!

This is an @originalworks writing contest submission. Check out the contest post here for more information.

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