Smart contracts are the new hype right now. Although a lot of people would automatically look towards Ethereum for making this technology possible in the real world, it is certainly possible to use the Bitcoin blockchain for this purpose as well. Transferring ownership of a domain name, for example, is just one of the many examples of how this technology can change the way we do things on a daily basis.
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Bitcoin Smart Contracts Are Quite Powerful
When dealing with the concept of transferring a domain name between parties, there are a few things that could possibly go wrong. For example, the seller paying for the domain name can charge back the funds – depending on the payment method used – or pay with someone else’s account. It is impossible to verify the authenticity of such a payment by any means.
The same can be said for the person holding the domain information, as they might never send the information after the money has been received. Solving this problem with an escrow service is possible, but it might not be the best solution. Bitcoin smart contracts, on the other hand, provides a system where both buyer and seller are protected without trusting an unknown third party.
When the buyer transfers the funds, it is locked for as long as he or she does not confirm receipt of the main information. However, the Oracle overseeing the Bitcoin smart contract – which is a computer, nut a human – will be listening for a change of ownership of the domain name, which would then release the funds automatically.
Although this technology uses the Bitcoin protocol, such business deals are not limited to using Bitcoin as a payment method either. Any type of currency could be used, depending on what both buyer and seller feel most comfortable with. In the end, the Bitcoin smart contract solution is a lot cheaper and far more convenient than any other option available today.
It would be absolutely amazing if ICANN decided to integrate this technology into their own offering in the near future. Transferring ownership through a Bitcoin smart contract holds a lot of merit, and not just in the world of domain names. But this is a clear example of how this disruptive technology.