Advanced use cases in the automation journey
The convergence of smart contracts and information technology (IT) has created a new paradigm of automation and security in digital transactions. While the first part covered fundamentals, this second part dives into advanced use cases, emerging technologies, and the technical challenges technology companies face when implementing smart contracts at scale.
New application opportunities for smart contracts in IT
Smart contract implementation is increasingly embedded in enterprise architecture in specific sectors, beyond common finance and blockchain applications. Below are some advanced use cases emerging from the interaction between IT and smart contracts.
IoT and smart contracts: automating connectivity
A significant area where IT and smart contracts intersect is the Internet of Things (IoT). Smart contracts can integrate with IoT devices to build systems that react automatically to real-world events. For example, in the automotive industry, a smart contract might trigger payment when an autonomous vehicle completes a delivery, automatically verifying predefined conditions (such as arrival at destination or delivery time).
The relationship between blockchain, IoT, and smart contracts can also support urban infrastructure where access to services (transport, energy) is managed autonomously through smart contracts. That is a major opportunity for IT companies, which must build the technology infrastructure to manage and secure these interconnected ecosystems.
Smart contracts and cloud computing: billing and service control
Using smart contracts to manage cloud services is another key advance. Cloud computing providers can integrate smart contracts to monitor resource usage and generate invoices automatically based on consumption. For example, a company might use smart contracts to bill by bandwidth or storage consumed, optimising resource administration and reducing disputes.
That also enables a new type of service level agreement (SLA), where IT companies can adjust costs dynamically to client needs through smart-contract-driven automation.
Insurance and smart contracts: automated claims
In insurance, smart contracts are automating claims handling. For example, a smart contract can execute automatically when an insured event is verified—such as a flight cancellation—and release funds to the customer without human intervention. IT companies play a key role by providing infrastructure to connect databases and sensors that validate these events.
Technical challenges for smart contracts in IT: scalability and sustainability
Despite wide opportunity, implementing smart contracts in the IT ecosystem faces important technical hurdles. Below are key challenges technology companies encounter when integrating this technology at scale.
Blockchain scalability limitations
A major challenge for blockchain platforms that host smart contracts is scalability. Networks such as Ethereum have seen congestion and high transaction fees. To address this, IT companies are exploring solutions such as sidechains and layer 2 solutions that process transactions off the main chain.
Energy consumption and sustainability
Another challenge is high energy consumption associated with blockchains using proof-of-work (PoW) consensus. The shift to proof-of-stake (PoS), as with Ethereum, is helping reduce that footprint. IT companies are leading more energy-efficient solutions in this space.
Privacy and data protection
Privacy and regulatory compliance are also critical. Despite blockchain transparency, IT companies are exploring technologies such as zero-knowledge proofs (ZK-SNARKs) and private smart contracts to ensure sensitive data is not exposed unnecessarily. That is crucial in sectors such as healthcare, where regulations such as GDPR apply in Europe.
The future of the relationship between IT and smart contracts
As smart contracts embed more deeply in enterprise technology infrastructure, their relationship with IT will keep evolving. Emerging technologies such as artificial intelligence (AI) and robotic process automation (RPA) are beginning to converge with smart contracts, creating new opportunities for automated workflows.
In summary, IT companies that proactively address technical challenges and explore new opportunities will play a central role in widespread smart contract adoption—transforming business processes and building a more automated, efficient future.