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Blockchain can prevent delays in payment to SMEs

IANS  |  Seoul 

Smart contracts based on blockchain can effectively prevent delay in payments for delivered goods and make it impossible to unilaterally alter original contracts, a local think tank said on Sunday.

The report by (KOSBI) said can open new horizons for how small and medium enterprises (SMEs) conduct business with their larger contractors, reports

Blockchain, often associated with and virtual currency, is considered an incorruptible digital ledger that can document all kinds of transactions and data.

The system is designed for a wide range of data sharing among a vast number of computers that are all linked together in a "chain" that theoretically cannot be tampered with.

Park Jae-sung, a research fellow at KOSBI, claimed that a contract distributed through the blockchain system will make delayed payment and unilateral changing of a deal a thing of the past.

He added that because smart contracts that are linked to virtual currency can be set in advance so immediate payments are made when contractual conditions are met, there is no way for a big company to withhold or delay payment.

"To create such an environment, it is imperative that a kind of public blockchain be developed and set up so it can be used by companies," the research fellow was quoted as saying.

He said that the first should be reached between and the government and state-run corporations so their feasibility and utility can be checked.

In addition, the stressed that are widely hailed as a next-generation that can bring about considerable innovation.



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, March 11 2018. 15:52 IST