Let’s say a new technology is developed that might allow many parties to transact a property deal. The parties gather and complete the important points about timing, special circumstances and financing. How will these parties know they can trust one another? They would have to verify their agreement with third parties – banks, legal teams, government registration and so on. This brings them back again to square one when it comes to utilising the technology to save lots of costs.
Within the next stage, the 3rd parties are now invited to join the real estate deal and provide their input as the transaction will be blockchain created in real time. This reduces the role of the middleman significantly. If the deal is this transparent, the middleman can even be eliminated in some cases. The lawyers are there to stop miscommunication and lawsuits. If the terms are disclosed upfront, these risks are greatly reduced. If the financing arrangements are secured upfront, it will soon be known beforehand that the deal will soon be covered and the parties will honour their payments. This brings us to the past 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 will be a currency issued by a main bank, which means coping with the banks once again. Should this happen, the banks wouldn’t allow these deals to be completed without some type of due diligence on their end and this could imply costs and delays. Is the technology that useful in creating efficiency up up to now? It is not likely.
What is the solution? Develop a digital currency that is not only just as transparent as the deal itself, but is actually area of the terms of the deal. If this currency is interchangeable with currencies issued by central banks, the only requirement remaining is to convert the digital currency right into a well-known currency such as the Canadian dollar or the U.S. dollar which may be done at any time.
The technology being alluded to in the example is the blockchain technology. Trade is the backbone of the economy. A vital reasons why money exists is for the objective of trade. Trade is really a large percentage of activity, production and taxes for various regions. Any savings in this area that may be applied across the world would be very significant. For instance, look at the idea of free trade. Prior to free trade, countries would import and export with other countries, but they had a tax system that would tax imports to restrict the effect that foreign goods had on the area country. After free trade, these taxes were eliminated and additional goods were produced. Even a small change in trade rules had a big effect on the world’s commerce. The phrase trade can be broken on to more specific areas like shipping, property, import/export and infrastructure and it is more obvious how lucrative the blockchain is if it could save even a small percentage of costs in these areas.