Let’s say a new technology is developed that might allow many parties to transact a property deal. The parties meet up 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 to square one when it comes to utilizing the technology to truly save costs.
In the next stage, the next parties are actually invited to join the actual estate deal and provide their input while 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 could even be eliminated in certain cases. The lawyers is there to prevent miscommunication and lawsuits. If the terms are disclosed upfront, these risks are greatly reduced. If the financing arrangements are secured upfront, it will be known beforehand that the deal will be taken care of 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 been completed, how will the deal be taken care of? The machine of measure will be a currency issued by a main bank, which means dealing with the banks once again. Should this happen, the banks wouldn’t allow these deals to be completed without some kind of due diligence on the end and this might imply costs and delays. May be the technology that useful in creating efficiency up until now? It is not likely.
What’s the clear answer? Create a digital currency that’s not only just as transparent as the deal itself, but is in fact 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 just like 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 reason money exists is for the purpose of trade. Trade takes its large percentage of activity, production and taxes for various regions. Any savings in this area that may be applied across the planet would be very significant. For instance, look at the concept of free trade. Just before free trade, countries would import and export with other countries, but they’d 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 many more goods were produced. Even a tiny change in trade rules had a large effect on the world’s commerce. The phrase trade could be broken down into more specific areas like shipping, property, import/export and infrastructure and it’s more obvious how lucrative the blockchain is if it may save even a tiny percentage of costs in these areas.