Benefits And Challenges Of Smart Contracts And Risk Management Strategies

Concept of Smart Contract and its Benefits

Bitcoin was started in 2008 recommended as the first blockchain technology. However, blockchain started an experiment for developing a platform for digital transaction of money and other financial assets (Kosba et al. 2016). Blockchain has received much attention in the market due to the hike in bitcoin value. Along with this, Smart Contract has been in light for different transaction of digital assets and contracts (Christidis and Devetsikiotis 2016). Smart contract requires attention in transparency during transaction among parties involved in a contract.

 Digital assets have been used by various companies all over the world. Therefore, smart contracts have been able to gain its importance in the world market. However, blockchain contains cryptographic decentralized database set up (Luu et al. 2016). Therefore, all users of blockchain are able to access all the data and information stored in the database. This might create some limitations for this technology. Private and important information related to the individuals can be intruded by third party. This have created issues in the security of the financial documents and money for the company (Peters and Panayi 2016). The security of these data and information is a major risk in this context.

Therefore, this research has focused in the benefits and challenges of the smart contract in the market. This study focuses on identifying different risks included in the implementation of the blockchain digital technology in the company. The risk management strategies have been discussed for mitigating risks involved in the implementation of the blockchain technology in the market.

Omohundro (2014) commented that block chain is a new technology that has become successful over the time. Block chain is an interconnected network architecture that deals with the transaction of digital assets. Blockchain has been integrated with the smart contract in order to provide transaction between parties involved in the contract. Atzei, Bartoletti and Cimoli (2017) mentioned that public block chains are easy to hack as all the data and information are accessed by the users of the blockchain and under a smart contract. Therefore, the security of data and money has been a serious issue related to the smart contract and blockchain.

The blockchain technology has been facing decentralized transparency problem in the market. This have created a major risk on the security of the data and information stored in the database. The risks have been creating obstacles in the use of the blockchain technology in the market. Bhargavan et al. (2016) commented that the hackers have been continuously nurturing databases of various companies. Block chain technology has been facing a major security problem in the market. There are various applications of the blockchain technology in the market including crypto currencies, real time money, settlement of boundaries, information on credit status and know your customer (KYC).

Risks Involved in the Implementation of Smart Contract and Blockchain Technology

Digital platforms are beneficial as they used to transfer digital currencies among the contract. Block chain technology has not able to penetrate in the individuals for investing. Generally, business organization are using this technology. This reflects that it has not able to gain trust of common citizens of any country. Watanabe et al. (2016) suggested that security has been a major discomfort for the block chain technology. Decentralized database have been edging different assets of organizations.

This research focuses on concept of smart contract and its benefits. Different risks involved in the implementation of the smart contract and block chain technology have been discussed. The use of the block chain technology by organization in the market has been explained. Various risks involved in this technology have been identified.

The primary problem of the research is to maintain the risks involved in the smart contracts. The risk management procedure has been applied in this research for mitigating risks in the smart contract. The use of smart contract has been varying with different companies that has been creating problems in the transferring currencies through block chain. Block chain are decentralized transparent that allows all other users to access data and information.

The aim of the research is to understand the concept of smart contract and risks management process for mitigating risks involved in it,

The objectives of the research are as follows:

• To understand the concept of smart contract and block chain digital technology
• To identify risks involved in implementation of the smart contract
• To recommend risk management process in order to mitigate risks in the smart contract

The research questions are mentioned below:

• What is the concept of smart contract and block chain digital technology?
• What are the risk involved in the implementation of smart contract?
• How risk management process can be implemented for mitigating risks in the smart contracts?

H1: There is significant impact of smart contract usage in enhancing transaction performance  

H2: There is a significant statistical relationship between age group, experience and the use of smart contract.

H3: There is a significant relationship between Risk management and trust in use of the smart contract

This chapter introduces the research topic and basic knowledge about it. The background of the study of focuses on the existing scenario of the smart contract in the market. The aim, objectives and research questions have been initiated in this chapter.

The literature review chapter deals with the basic concept of the research topic. This chapter has focused on the basic concept of smart contracts and its benefits. The implementation of the blockchain technology in the smart contract has been mentioned in the chapter. The benefits and risks involved in the blockchain and smart contract technology have been critically analyzed in the chapter. Different theories and models related to the smart contract and risk management have been discussed in the chapter that helps in gaining knowledge about the smart contract and risks involved in it.

Risk Management Strategies for Mitigating Risks Involved in the Implementation of Blockchain Technology in the Market

A smart contract is a special type of account that helps in storing executable code associated with the currency of individuals and account balance in blockchain. As commented by Kosba et al. (2016), smart contract have an address that helps in identifying the contract among others. These addresses acts as public keys. Different transactions are allowed to be made through this smart contracts based in the block chain technology. The use of the smart contract helps in maintaining the crypto currency transfer from one place to other. Various codes are included in the smart contract that are executable by the receiver. The function name of the code helped in maintaining the address of the data and information. The contract can send money from its balance to other accounts and access their functions legally.

Execution of codes happens in the mining codes of the network connectivity. Variables included in the contract are stored in the storage with the help of key value store included in the contract. Christidis and Devetsikiotis (2016) commented that smart contracts are the legal agreements creation that is made with the help of computers. It is deployed on the blockchain platform that helps in hosting the smart contract.

The block chain is a digital technology that helps in combining cryptography, networking and data management together. This technology helps in [providing digital currency transfer among various networks. However, these digital currencies are trusted by third parties including government agencies, legal firm, banks and accounting firms. Block chains provide several way for supporting these transactions. Therefore, this has created a lot of customers and individuals accessing this technology for money transfer. However, many researchers have argued that the use of the block chain has created loss too many companies. Luu et al. (2016) argued that the security of financial assets and documents are weak in this technology. The hacking of financial documents during transfer is possible that makes it less trustable. Therefore, it has faced several limitations in its methodology. However, Zhang et al. (2016) mentioned that blockchain digital technology has been used by several startups for fast transfers and functioning of the financial documents and money. This have created a balance in the use of the digital technology. Blockchain technologies uses public key encryption infrastructure. Therefore, smart contract between parties are easy and trustable. The block chain also generate private key for the initiator’s address. The initiator triggers the smart contract transaction by sending an initiating message using the address encrypted with a private key.

Blockchain digital technology is an emerging technology that has various areas to be improved (Koulu 2016). The technical use of this technology is done for transferring various financial document and money. Peters and Panayi (2016) commented that a blockchain technology is totally based on peer-to-peer network. That helps in combining the ability of technology for securing different interaction with two individuals. Reliability with the system has been established with the help of maintaining a peer connection with several networks. This technology is depended on the data and code that create automated measures in a fascinated way. Trust is an important factor in the growth of the blockchain technology. The public key encryption has provided security to the data stored in the database server. As commented by Andersen et al. (2017), the use of this server in the network helps in maintaining and transferring financial data and money between individuals. In case of unfinished transaction, all many and data are revered back to the data server. This has created a reliable source of money transfer technology. The blockchain digital technology in smart contract is a decentralized network. Omohundro (2014) argued that the use of blockchain network might be harmful for both parties involved in the smart contracts.

Factors	Source
Security	(Cachin 2016)
Testing	(Atzei, Bartoletti and Cimoli 2017)
Blockchain Technologies	(Levy 2017)
Decentralized databases	(Nugent, Upton and Cimpoesu 2016)
Cryptography	(Frantz and Nowostawski 2016)
Cyber-attacks	(Idelberger et al. 2016)
Service-level Agreements	(Sergey and Hobor 2017)

Table 1: Factors affecting Smart Contracts

(Source: Created by author)

Smart Contracts have helped in providing digital edge to the transfer of money and documents (Cachin 2016). The block chain technology have helped in providing distributed technology in order to capture various tasks. The information shared among the parties are kept securely stored. Therefore, the use of this digital technology have helped in maintaining financial databases of any organization. As commented by Atzei, Bartoletti and Cimoli (2017), smart contracts are the simplest form of digital contract that are signed between two parties. These contracts helps in accessing various business deals and successfully complete it. However, Smart Contracts have a potential and can transform business model of any organization (Levy 2017). The industry have helped in testing the functionality of service systems can be available during distribution of information. The collaboration of both parties have helped in maintaining the transparency in smart contract terms and condition. Various laws and rules ate included in the smart contract that have helped in maintaining a proper aspect in the contract. Service systems are characterized in various factors including adaptive nature, complexity and dynamic composition of operant (Nugent, Upton and Cimpoesu 2016). The resources involved in the smart contract have maintained the impact on the service systems sin order to provide enhanced services to the customers. Kothapalli, Miller and Borisov (2017) mentioned that the introduction of a blockchain renders use of third party genuinely that helps in involving the trust in environment. This blockchain digital technology helps in facilitating exchange of data and information for involving both parties in order to provide transparent and shared database. The involved parties in the smart contract gain direct access to the documents and information. Therefore, this helps in getting all the information involved in the smart contracts. The blockchain platform Ethereum acts as an example for delivering toolset to design coded contracts. Therefore, this might provide impact on the data of formal service system (Frantz and Nowostawski 2016).

As commented by Al-Bassam et al. (2017), smart Contracts have different limitations in many cases. The use of the blockchain digital technology have decentralized database. Therefore, this creates problem for the users as all the information can be accessed by a user of smart contract. This degrades the security of the data and information stored in the database server. The public block chains can be accessed by anyone in the database (Idelberger et al. 2016). Therefore, the security of the public block chain is minimum. Block chain can be used by different bans for fast transfer of money digitally. Therefore, it creates a high-level risk during the transfer of money to other account. The loss of money and financial documents can be a major risks involved in the blockchain technology.

As commented by Bartoletti and Pompianu (2017), block chains are not sufficient fir the big data concept. Therefore, it cannot hold large volumes of data a time. Therefore, this creates inherent limitations for the blockchain in order to create massive redundancy into large number of nodes. However, big data can be implemented in the blockchain by the use of the meta-data. The smart contracts are immutable contracts that creates cryptographic phenomenon in historical transaction. Block chain technologies shorten the duration of many businesses in order to process various business continuity plans (Sergey and Hobor 2017). Therefore, these private plans can be accessed but other parties, as they are included in the smart contract agreement. The blockchain technology create a seamless legacy infrastructure that creates a holographic effect in the smart contract. The security of the data and information stored in the smart contract is not safe and secure (Delmolino et al. 2016). It does not provide transactional security and account wallet security to the users. The distributed database of the blockchain technology have created various security risks involved in the databases.

However, service level agreements between parties involved in the smart contracts create a supplier network for monitoring it. Therefore, the use of smart contracts create risks in providing secure and reliable services to the individual. Therefore, exiting policies and laws need to be improved in order to maintain a business model within the smart contracts.

This is summarized that use of the blockchain digital technology have helped in fast transfer of financial documents and money. Smart contract focuses on the digital concept of agreement between two parties. The impact of the smart contract in the services has been described in this chapter. Various benefits and limitations of the concept has been described.

This chapter focuses on the methodology used in the research. Research methodologies are esteem, logical and impartial part of the research. It includes hypothetical issues, numerical and trial techniques of the research. The researcher has selected positivism philosophy with deductive approach. Data has been collected from primary sources by descriptive design.

According to Flick (2015), rresearch philosophy are of three types including Positivism, Interpretivism and Realism. The positivism philosophy deals with the knowledge included in the objectives and collects data and information in a scientific way. Therefore, the researcher has used positivism philosophy in this research. This has helped in developing hypothesis of the research. Data is collected through quantitative and qualitative methods. Positivism philosophy deals with the quantifiable data leading to statistical analysis.

Research approach are two types including Deductive and Inductive approach. As mentioned by Neuman and Robson (2014), deductive approach deals with specific level of research. Therefore, the researcher has selected deductive approach for this research. It helps in focusing on the objectives of the research neglecting all other contents in the research. It also depends on quantitative approach in the research. The deductive approach deals with the introduction of theories and principles and its application.

According to Flick (2015), research Design is a strategy that helps in collecting data and information related to the research. Three types of research design are descriptive, explanatory and exploratory. Descriptive design helps in providing observational study of the research elements. The researcher has used descriptive design min this research. The use of this design helps in providing quantitative approach to analysis of gathered data and information regarding the research topic. The smart contract concept has been descriptively using the block chain digital technology for getting a platform to execute.

Data collection is an important part of the research that helps in collecting day and information rated to the research topic. The use of the data collection technique help in maintaining a practical approach towards the research. Two types of data collection processes are primary sources and secondary sources. The primary data collection method focuses on collecting data and information from primary data sources including survey. Secondary data collection method collects data from secondary sources including online journals, articles, reports, books and government databases.

The two types of sampling technique are probability and non-probability techniques. However, the probability technique has been used in this research for collecting data. Probability technique helps in providing equal chances to all the samples included in the research. Random pr0babaility samples has been dine that helps in providing chances for selecting anyone from the population. However, in this research, 55 users of smart contract and block chain have been selected for online survey. There are 5 close-ended questions are included in the survey questionnaires.

The researcher has conducted online survey in order to collect primary data and information related to the smart contracts and block chain. The researcher has organized online survey with 55 users of smart contract and block chain. There have been 40 close-ended questions in the survey questionnaire. These questions have been related to the research objectives that have helped in proper analysis of related data.

Two types of data analysis method are qualitative and quantitative analysis method. The qualitative analysis method is used during the secondary data collection method. However, in this case data has been collected from primary data sources. Therefore, the researcher has selected quantitative data analysis. Results and outcomes of the survey have been shown on a Likert scale range 1 to 5. The results have been displayed using tables, charts and graphs.

The research has been conducted with proper ethical consideration. The data and information have been properly analyzed and not shared with any other individual. The survey participants have not been forced to remain in the research and they can leave the research at any point of time. According to Eisenhardt et al. (2016), under the Data Protection Act 1998, any personal information of the participants are not shared with anyone without their permission. Therefore, ethical behavior of the researcher towards participants have been correct in order to conduct the study.

The research have based some limitations in the data collection process. Not all the participants have answered the questions properly. Therefore, answers were not taken as reliable data. Some of the participants were influenced by some personality and current services provided by the company. Therefore, there answers might vary time. This creates problems for the researchers to analyze properly. Budget has been another problem for the research. Researcher does not have enough budget for conducting the research by using proper technology and tools.

This chapter deals with the methodology o the research. This research has used positivism philosophy, deductive approach and descriptive design. Data and information has been collected from primary sources. There has been online questionnaire developed for conducting survey. The research has been conducted ethically.

The quantitative data analysis deals with the analysis of the primary data collected from primary sources. The researcher has organized online survey for collecting primary data. 55 customers accessing smart contract and block chain have been taken as participants for the online survey. There have been 40 close ended questions included in the survey questionnaire.

What is your Age group
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	18 – 21 years	10	18.2	18.2	18.2
22 – 25 years	22	40.0	40.0	58.2
26 – 29 years	16	29.1	29.1	87.3
30+	7	12.7	12.7	100.0
Total	55	100.0	100.0

Table 2: Age group 

What is your gender?
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Male	25	45.5	45.5	45.5
Female	30	54.5	54.5	100.0
Total	55	100.0	100.0

Table 3: Gender

What is your Experience
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	1 year	19	34.5	34.5	34.5
2 years	22	40.0	40.0	74.5
3 years	11	20.0	20.0	94.5
More than 3 years	3	5.5	5.5	100.0
Total	55	100.0	100.0

Voluntariness of use
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Yes	29	52.7	52.7	52.7
No	25	45.5	45.5	98.2
4.00	1	1.8	1.8	100.0
Total	55	100.0	100.0

Table 5: Voluntariness use

You are using smart contract and block chain for how many years?
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Less than 1 year	21	38.2	38.2	38.2
1 – 2 years	11	20.0	20.0	58.2
2 – 3 years	5	9.1	9.1	67.3
4 – 5 years	14	25.5	25.5	92.7
More than 5 years	4	7.3	7.3	100.0
Total	55	100.0	100.0

Table 8: Smart contract usage

The above graphs and tables expresses that there are 40 percent if the people have age between 22-25 years. However, 18 percent people are aging between 18-21 years of age. This demographics of the participants expresses that most of the people, are interested in the survey related to the smart contract. The percentage of female participants are more than that of male participants. Female participants possess more interest in the block chain technology than male participants do. However, 40 percent people have an experience of two years in this field. 34.5 percent people have one-year of experience. However, 38.2 % people are using this technology from less than  one year. Therefore, there is an improvement in the number of customers in the market. 

I have the resources necessary to use the system
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	14	25.5	25.5	25.5
Disagree	11	20.0	20.0	45.5
Neutral	14	25.5	25.5	70.9
Agree	12	21.8	21.8	92.7
Strongly Agree	4	7.3	7.3	100.0
Total	55	100.0	100.0

Table 9: resources necessary to use the system 

I have the knowledge necessary to use the system
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	14	25.5	25.5	25.5
Disagree	12	21.8	21.8	47.3
Neutral	15	27.3	27.3	74.5
Agree	10	18.2	18.2	92.7
Strongly Agree	4	7.3	7.3	100.0
Total	55	100.0	100.0

Table 10: knowledge necessary to use the system 

Block-chain is not compatible with other system
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	13	23.6	23.6	23.6
Disagree	10	18.2	18.2	41.8
Neutral	14	25.5	25.5	67.3
Agree	12	21.8	21.8	89.1
Strongly Agree	6	10.9	10.9	100.0
Total	55	100.0	100.0

Table 11: Compatibility 

People with technical know-how are available for assistance with the system
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	13	23.6	23.6	23.6
Disagree	13	23.6	23.6	47.3
Neutral	7	12.7	12.7	60.0
Agree	12	21.8	21.8	81.8
Strongly Agree	10	18.2	18.2	100.0
Total	55	100.0	100.0

Table 12: available for assistance with the system 

Given the resources, opportunities and knowledge it takes to use the system, it would be easy for me to use the system
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	10	18.2	18.2	18.2
Disagree	10	18.2	18.2	36.4
Neutral	6	10.9	10.9	47.3
Agree	16	29.1	29.1	76.4
Strongly Agree	13	23.6	23.6	100.0
Total	55	100.0	100.0

Table 13: Opportunities and knowledge it takes to use the system, it would be easy for me to use the system 

People who know the technology should use the technology
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	11	20.0	20.0	20.0
Disagree	9	16.4	16.4	36.4
Neutral	7	12.7	12.7	49.1
Agree	20	36.4	36.4	85.5
Strongly Agree	8	14.5	14.5	100.0
Total	55	100.0	100.0

Table 14: People who know the technology should use the technology

The above graphs and tables describes that the 25.5 percent people are confused by various terms and condition of the technology Therefore, they are not able to access the benefits in the technology. However, 20 percent people are agreed with the concept of the blockchain technology in the market. 25.5 percent people are strongly agreed with the necessary resources for the implementation of the technology.

	Correlations
		I have the resources necessary to use the system	I have the knowledge necessary to use the system	Block-chain is not compatible with other system
	I have the resources necessary to use the system	Pearson Correlation	1	.442**	.325*
	Sig. (2-tailed)		.001	.015
	N	55	55	55
	I have the knowledge necessary to use the system	Pearson Correlation	.442**	1	.379**
	Sig. (2-tailed)	.001		.004
	N	55	55	55
	Block-chain is not compatible with other system	Pearson Correlation	.325*	.379**	1
	Sig. (2-tailed)	.015	.004
	N	55	55	55
	People with technical know how are available for assistance with the system	Pearson Correlation	.489**	.334*	.347**
	Sig. (2-tailed)	.000	.013	.010
	N	55	55	55
	Given the resources, opportunities and knowledge it takes to use the system, it would be easy for me to use the system	Pearson Correlation	.467**	.280*	.301*
	Sig. (2-tailed)	.000	.038	.025
	N	55	55	55
	People who know the technology should use the technology	Pearson Correlation	.247	.180	.482**
	Sig. (2-tailed)	.069	.188	.000
	N	55	55	55
Correlations
	People with technical know how are available for assistance with the system	Given the resources, opportunities and knowledge it takes to use the system, it would be easy for me to use the system	People who know the technology should use the technology
I have the resources necessary to use the system	Pearson Correlation	.489**	.467**	.247
Sig. (2-tailed)	.000	.000	.069
N	55	55	55
I have the knowledge necessary to use the system	Pearson Correlation	.334*	.280*	.180
Sig. (2-tailed)	.013	.038	.188
N	55	55	55
Block-chain is not compatible with other system	Pearson Correlation	.347**	.301*	.482**
Sig. (2-tailed)	.010	.025	.000
N	55	55	55
People with technical know how are available for assistance with the system	Pearson Correlation	1	.653**	.351**
Sig. (2-tailed)		.000	.009
N	55	55	55
Given the resources, opportunities and knowledge it takes to use the system, it would be easy for me to use the system	Pearson Correlation	.653**	1	.500**
Sig. (2-tailed)	.000		.000
N	55	55	55
People who know the technology should use the technology	Pearson Correlation	.351**	.500**	1
Sig. (2-tailed)	.009	.000
N	55	55	55
	The above table describes about the correlation among the questions included in the survey questionnaires. The p value of the people with technical know how are available for assistance with the system has been .489 that is the highest value. This relates with the question that I have the resources necessary to use the system. Therefore, the correlation among these questions has been justified properly by the correlation table provided. From table 4.2 we find that all the variables are positively correlated at 99% level of significance. Reliability Reliability Statistics Cronbach’s Alpha N of Items .791 6 Item Statistics Mean Std. Deviation N I have the resources necessary to use the system 2.6545 1.27973 55 I have the knowledge necessary to use the system 2.6000 1.25610 55 Block-chain is not compatible with other system 2.7818 1.32903 55 People with technical know how are available for assistance with the system 2.8727 1.46635 55 Given the resources, opportunities and knowledge it takes to use the system, it would be easy for me to use the system 3.2182 1.46175 55 People who know the technology should use the technology 3.0909 1.39141 55 The above table describes about the reliability factor of various questions in the survey questionnaires. The alpha value is .791 for 6 items in the table. The reliability analysis of the blockchain technology in the market has been discussed in the table. Therefore, gathering knowledge about the technology helps in using the technology in an easier way. Therefore, awareness of this tech ology is needed on the market. People who do not know the technology should not use the technology
		Frequency	Percent	Valid Percent	Cumulative Percent
	Valid	Strongly Disagree	12	21.8	21.8	21.8
	Disagree	12	21.8	21.8	43.6
	Neutral	10	18.2	18.2	61.8
	Agree	17	30.9	30.9	92.7
	Strongly Agree	4	7.3	7.3	100.0
	Total	55	100.0	100.0

Table 15: People who do not know the technology should not use the technology 

What are the benefits of using these technologies?
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Agent Neutrality	7	12.7	12.7	12.7
Automation	15	27.3	27.3	40.0
Security	15	27.3	27.3	67.3
Precision	12	21.8	21.8	89.1
Decentralised database	6	10.9	10.9	100.0
Total	55	100.0	100.0

Table 16: Benefits of using these technologies 

Correlations
	People who do not know the technology should not use the technology	What are the benefits of using these technologies?	In general companies supports the use of the smart contract technology
People who do not know the technology should not use the technology	Pearson Correlation	1	.533**	.088
Sig. (2-tailed)		.000	.522
N	55	55	55
What are the benefits of using these technologies?	Pearson Correlation	.533**	1	.576**
Sig. (2-tailed)	.000		.000
N	55	55	55
In general companies supports the use of the smart contract technology	Pearson Correlation	.088	.576**	1
Sig. (2-tailed)	.522	.000
N	55	55	55
Your seniors have assist in using the technology	Pearson Correlation	.414**	.520**	.376**
Sig. (2-tailed)	.002	.000	.005
N	55	55	55
I find the system useful for the transaction	Pearson Correlation	.218	.308*	.325*
Sig. (2-tailed)	.110	.022	.016
N	55	55	55

Correlations
	Your seniors have assist in using the technology	I find the system useful for the transaction
People who do not know the technology should not use the technology	Pearson Correlation	.414**	.218
Sig. (2-tailed)	.002	.110
N	55	55
What are the benefits of using these technologies?	Pearson Correlation	.520**	.308*
Sig. (2-tailed)	.000	.022
N	55	55
In general companies supports the use of the smart contract technology	Pearson Correlation	.376**	.325*
Sig. (2-tailed)	.005	.016
N	55	55
Your seniors have assist in using the technology	Pearson Correlation	1	.295*
Sig. (2-tailed)		.029
N	55	55
I find the system useful for the transaction	Pearson Correlation	.295*	1
Sig. (2-tailed)	.029
N	55	55

The above table describes about different functionalities of the survey questionnaires related to the research topic. The p value of benefits of blockchain is .520. The dependent and independent variable has been maintained by a professional outlook of the analysis. A positive correlation has been shown in the table. The benefits of blockchain technology has been mentioned in the correlation table. The awareness among the people in the society needs to be increased. 27.3 % participants have answered for both security and automation facility of the smart contract and blockchain technology. The security reasons of the technology have enhanced from initial stages that have attracted various ground to the technology in the market. 

Data Privacy will get decreased
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	11	20.0	20.0	20.0
Disagree	4	7.3	7.3	27.3
Neutral	17	30.9	30.9	58.2
Agree	14	25.5	25.5	83.6
Strongly Agree	9	16.4	16.4	100.0
Total	55	100.0	100.0

What are the risks involved in the Smart Contract technology?
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Suspicious Behaviour	10	18.2	18.2	18.2
Frequent Changes	8	14.5	14.5	32.7
Data privacy	16	29.1	29.1	61.8
Human Factor	11	20.0	20.0	81.8
Economy and Speed	10	18.2	18.2	100.0
Total	55	100.0	100.0

Suspicious Behavior will get increased
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	9	16.4	16.4	16.4
Disagree	16	29.1	29.1	45.5
Neutral	12	21.8	21.8	67.3
Agree	14	25.5	25.5	92.7
Strongly Agree	4	7.3	7.3	100.0
Total	55	100.0	100.0

How risk management can be applied to mitigate risks?
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Encrypted Data	9	16.4	16.4	16.4
Use of Firewall	8	14.5	14.5	30.9
Strong Password	15	27.3	27.3	58.2
Centralised Database	16	29.1	29.1	87.3
Awareness	7	12.7	12.7	100.0
Total	55	100.0	100.0

Frequent changes in the delivery plan will be enhanced
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	9	16.4	16.4	16.4
Disagree	5	9.1	9.1	25.5
Neutral	8	14.5	14.5	40.0
Agree	18	32.7	32.7	72.7
Strongly Agree	15	27.3	27.3	100.0
Total	55	100.0	100.0

Encrypted data policy might help in minimizing risks in smart contract
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	8	14.5	14.5	14.5
Disagree	5	9.1	9.1	23.6
Neutral	13	23.6	23.6	47.3
Agree	22	40.0	40.0	87.3
Strongly Agree	7	12.7	12.7	100.0
Total	55	100.0	100.0

Use of firewall might be useful
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	9	16.4	16.4	16.4
Disagree	7	12.7	12.7	29.1
Neutral	19	34.5	34.5	63.6
Agree	13	23.6	23.6	87.3
Strongly Agree	7	12.7	12.7	100.0
Total	55	100.0	100.0

Centralized database system if the smart contract might help in maintaining risks in the technology
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	10	18.2	18.2	18.2
Disagree	10	18.2	18.2	36.4
Neutral	16	29.1	29.1	65.5
Agree	12	21.8	21.8	87.3
Strongly Agree	7	12.7	12.7	100.0
Total	55	100.0	100.0

Strong passwords in the server might reduce risks involved
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	5	9.1	9.1	9.1
Disagree	8	14.5	14.5	23.6
Neutral	11	20.0	20.0	43.6
Agree	17	30.9	30.9	74.5
Strongly Agree	14	25.5	25.5	100.0
Total	55	100.0	100.0

Awareness among people in the market and society is required
	Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	9	16.4	16.4	16.4
Disagree	2	3.6	3.6	20.0
Neutral	12	21.8	21.8	41.8
Agree	19	34.5	34.5	76.4
Strongly Agree	13	23.6	23.6	100.0
Total	55	100.0	100.0

The above table reflects about risks and risk management policies in the blockchain technology. 25.5 % participants have agreed that the data privacy will be decreased by this technology. However, 20 % participants have strongly disagreed on this point related to the data privacy. 29.1 % people have voted for data privacy as major risks to the block chain technology. 18.2 % people have voted for economy and speed of the transaction to be risks in the block chain technology. However, 29.2% people have disagreed that the suspicious behavior in the system will get increased. The risk management process has been implemented on the smart contract for mitigating risks in it. The security of personal data and digital assets have been major risks of the smart contract. 23.6 % people have agreed that the use of firewalls in the item might decrease the privacy risks in the technology. The use firewall might help in maintaining the security of the data and information if the parties in the smart contract. These firewalls help in providing a wall between both the parties that restricts the access of the other parties to access important documents of parties in the smart contract.

Correlations
	Data Privacy will get decreased	What are the risks involved in the Smart Contract technology?	Suspicious Behavior will get increased
Data Privacy will get decreased	Pearson Correlation	1	.629**	.311*
Sig. (2-tailed)		.000	.021
N	55	55	55
What are the risks involved in the Smart Contract technology?	Pearson Correlation	.629**	1	.617**
Sig. (2-tailed)	.000		.000
N	55	55	55
Suspicious Behavior will get increased	Pearson Correlation	.311*	.617**	1
Sig. (2-tailed)	.021	.000
N	55	55	55
How risk management can be applied to mitigate risks?	Pearson Correlation	.309*	.470**	.454**
Sig. (2-tailed)	.022	.000	.001
N	55	55	55
Frequent changes in the delivery plan will be enhanced	Pearson Correlation	.247	.287*	.535**
Sig. (2-tailed)	.069	.033	.000
N	55	55	55

Correlations
	How risk management can be applied to mitigate risks?	Frequent changes in the delivery plan will be enhanced
Data Privacy will get decreased	Pearson Correlation	.309*	.247
Sig. (2-tailed)	.022	.069
N	55	55
What are the risks involved in the Smart Contract technology?	Pearson Correlation	.470**	.287*
Sig. (2-tailed)	.000	.033
N	55	55
Suspicious Behavior will get increased	Pearson Correlation	.454**	.535**
Sig. (2-tailed)	.001	.000
N	55	55
How risk management can be applied to mitigate risks?	Pearson Correlation	1	.362**
Sig. (2-tailed)		.007
N	55	55
Frequent changes in the delivery plan will be enhanced	Pearson Correlation	.362**	1
Sig. (2-tailed)	.007
N	55	55

The correlation among the risk factors ion the block chain have been provided. The p value of the risks in the block chain is .629 with respect to the decrease in the data privacy in the system. The industry have helped in testing the functionality of service systems can be available during distribution of information. The collaboration of both parties have helped in maintaining the transparency in smart contract terms and condition. The decentralized database storage have helped in accessing all the information of the parties included in the smart contract.

Reliability Statistics
Cronbach’s Alpha	N of Items
.782	5

Item Statistics
	Mean	Std. Deviation	N
Data Privacy will get decreased	3.1091	1.34264	55
What are the risks involved in the Smart Contract technology?	3.0545	1.35289	55
Suspicious Behavior will get increased	2.7818	1.21245	55
How risk management can be applied to mitigate risks?	3.0727	1.27446	55
Frequent changes in the delivery plan will be enhanced	3.4545	1.41183	55

The alpha value in this state is .782 for 5 items in the table. The risks management policies have been developed in the survey questionnaires and reliability factors. The frequent changes in the delivery plan has been the most reliable factor with 3.4545 number. The use of encryption of data helps in maintaining the secure of the data. The key used to encrypt data and information helps in provided security, the key is only known to both parties in smart contract. Therefore, hackers cannot access the data package that are transferred through network.

Smart Contracts have been playing an important role in the business transaction. The use of the mart contract has been initiated by different business organization. Data and information-collected form the inline survey have helped in analyzing concept of smart contract and block chain. Five close-ended questions have been asked to 55 customers of the smart contract and bock chain. There answers have been recorded and taken as data for the analysis. The data collection method shows that most of the customers are male. However, female customers are also interested in investing in the smart contract and block chain.

The use of smart contract has been becoming famous in the modern world. This has helped in increasing the number of the customers over the years. The next question describes about the consistency of customers using block chain and smart contract in the market. In this case, it shows that most of the customer have joined recently. Lack of awareness among individuals is one of the major reason for creating risk related to the smart contract. The use of the smart contract has been indulging among various business organization that helps in enhancing the market of the company in the world. The use of the block chain management have helped in maintaining digital transaction among the parties under smart contract. The tables and graphs pictures the data and findings related to the smart contract. There are benefits of the smart contract as they are useful in transaction of digital assets of a company, the speed and time has been enhanced with the use of the smart contract and blockchain.

This might have created many imitations in the market. As the database is decentralized, personal data and information of parties are not safe in the database. The data loss has been a major risk in the smart contract. Therefore, the security of the data an information has been minimum in the smart contract.

Conclusion and Recommendation

Conclusion

It can be concluded that the smart contract and block chain technology have provided an edge to the transfer of digital assets all over the world. Smart Contract have helped in maintaining the digital transaction between parties. The use of the block chain technology has helped in providing a platform for assessing the smart contract. This technology have faced risks including the data transparency and decentralized database. The trust of the people in thus technology has not been enhanced due to which the market of the technology has been down. However, this research have helped in identifying the risks and strategies for mitigating these risks in the implementation of the smart contract in the market the risk management process have helped in providing proper solution to improve security of the data and information included in the database of the smart contract. The literature review of the study have provided existing theory reacted to the smart contract and risks management  Existing knowledge have helped in developing the methodology of the research. The research have used primary data collection method. Survey questionnaire have been created that have helped in collecting data and information related to the research topic. Quantitative analysis have helped in analyzing data collected from survey. The results shows that risks management might help in mitigating risks and challenges in the smart contract.

Following are the recommendations for the improvement of the smart contracts in the market:

Increasing Research and development on trustworthy block chains

Researches have been done to analyze the trustworthiness of individual in the block chain network. However, the results have not been in favor of the technology. Therefore, it is recommended to work in the research and development of the trust on the people related to the block chain. The proof of concept might help in gaining trust for using block chains in the market. The functional and non-functional properties of the block chains needs to be refined properly for enhancing the trust of the people using this technology.

Scrutinize technology-specific risk for new systems

Regulators needs to be aware of different technical tasks that help in mitigating the risk in the smart contract and block chain. The block chain needs to be modified that helps in maintaining the risk management process in the system. The requirements of the system needs to be properly understood and strategies needs to be prepared for implementing a successful transaction.

Private database

The database of the smart contract needs to be make private so that other parties cannot access important and personal document. Parties involved in the smart contract used to share important documents and financial files. The use of the smart contract depend of various factors that might help in maintaining different aspects of contract.

This research has focused on the concept of the smart contract and risk involved in this technology. The risk management process has been described in the study for mitigating the risks in the smart contract. However, future researcher might include some theories and models related to the smart contract ad block chain digital technology. The future work might focus on the implementation of the smart contract and block chain technology. The mitigation strategy for these risks can be researching and developing knowledge regarding the blockchain technology. However, scrutinizing better technological impact in the development of blockchain technology. The use of centralized and private databases might help in maintaining important and private documents of parties included in smart contract. This will increase the security of important documents in the database.

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