Let’s say a new technology is developed that might allow many parties to transact a real-estate deal. The parties gather and complete the details about timing, special circumstances and financing. How will these parties know they can trust each other? They will have to verify their agreement with third parties – banks, legal teams, government registration and so on. This brings them back once again to square one with regards to utilizing the technology to save lots of costs.
In the next stage, the next parties are actually invited to join the real estate deal and provide their input while the transaction is being blockchain created in real time. This reduces the role of the middleman significantly. If the deal is this transparent, the middleman can also be eliminated in a few cases. The lawyers is there to avoid miscommunication and lawsuits. If the terms are disclosed upfront, these risks are greatly reduced. If the financing arrangements are secured upfront, it will undoubtedly be known in advance that the deal will undoubtedly be covered and the parties will honour their payments. This brings us to the final stage of the example. If the terms of the deal and the arrangements have now been completed, how will the deal be covered? The system of measure would be a currency issued by a main bank, which means working with the banks once again. Should this happen, the banks would not allow these deals to be completed without some type of due diligence on the end and this would imply costs and delays. Is the technology that useful in creating efficiency up until now? It’s not likely.
What is the answer? Develop a digital currency that is not only as transparent as the deal itself, but is in fact area of the terms of the deal. If this currency is interchangeable with currencies issued by central banks, the sole requirement remaining is always to convert the digital currency in to a well-known currency just like the Canadian dollar or the U.S. dollar which can be done at any time.
The technology being alluded to in the example may be the blockchain technology. Trade may be the backbone of the economy. A key reason why money exists is for the goal of trade. Trade is really a large percentage of activity, production and taxes for various regions. Any savings of this type that may be applied across the world could be very significant. For example, consider the concept of free trade. Prior to free trade, countries would import and export with other countries, but they’d a tax system that will tax imports to restrict the result that foreign goods had on the neighborhood country. After free trade, these taxes were eliminated and additional goods were produced. Even a small change in trade rules had a sizable effect on the world’s commerce. The phrase trade may be broken down into more specific areas like shipping, real-estate, import/export and infrastructure and it’s more obvious how lucrative the blockchain is if it can save even a small percentage of costs in these areas.