Let’s say that the new technology is developed that can allow many parties to transact a real-estate deal. The parties meet up and complete the important points about timing, special circumstances and financing. How will these parties know they could 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 with regards to utilising the technology to save costs.
Within the next stage, the next parties are now actually invited to become listed on the real estate deal and provide their input as the transaction has been 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 some 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 is going to be known ahead of time that the deal is going to be taken care of 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 already been completed, how will the deal be taken care of? The unit of measure would be a currency issued by a main bank, this means coping 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 their end and this might imply costs and delays. Is the technology that useful in creating efficiency up up to now? It is not likely.
What’s the solution? Produce a digital currency that is not only just as transparent as the deal itself, but is actually part of the terms of the deal. If this currency is interchangeable with currencies issued by central banks, the only real requirement remaining is to convert the digital currency in to a well-known currency such as the Canadian dollar or the U.S. dollar which is often done at any time.
The technology being alluded to in the example is the blockchain technology. Trade is the backbone of the economy. An integral reasons why money exists is for the goal of trade. Trade takes its large percentage of activity, production and taxes for various regions. Any savings in this area which can be applied across the planet would be very significant. As an example, go through the notion 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 neighborhood country. After free trade, these taxes were eliminated and additional goods were produced. Even a small change in trade rules had a large influence on the world’s commerce. The term trade can 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 may save even a small percentage of costs in these areas.