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Icertis Internet of Contracts whitepaper

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Blockchains that use distributed ledger technology allow for contracts that are self-verifying, self-executing, and autonomous. In other words, the contract doesn't just flag an action. It addresses the action automatically – for example adjusting and releasing payment when an exchange rate fluctuates. This is the framework for "smart contracts." Smart Contracts and the Blockchain Smart contracts render transactions traceable, transparent, verifiable and irreversible by allowing trusted agreements to be entered by distinct, potentially anonymous parties. They will have a significant impact on the way companies conduct business with partners, suppliers, customers, and employees. The code and the agreements contained in smart contracts can now exist across a decentralized blockchain network. Blockchain technologies can now create a network of smart contracts that exchange terms, events, and information throughout the contract lifecycle, automating many of the tasks that have typically been done manually. These contracts can be coded to "talk" to each other, exchange data, and update themselves with the most current information. They have the potential to automate much of the post-execution lifecycle of a contract, thereby improving compliance, mitigating risk and increasing efficiency across the enterprise. For example, blockchain could be used to manage currency fluctuation in a contract between two companies. Say a contract stipulates terms if a currency fluctuates by more than 5 percent. In this scenario, an enterprise would use a contract management application to place the contract in a consortium blockchain, and the application would then check with an external blockchain oracle (which serves as a trusted source of information) for currency rates. When the triggering currency rate is hit, the blockchain app would create a contract addendum, which would be considered executed by both parties against which future payments could be processed. Continued on next page Contact us: icertis.com/contact 8

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