Let’s say that the new technology is developed that can allow many parties to transact a real estate deal. The parties get together and complete the facts about timing, special circumstances and financing. How will these parties know they are able to trust one another? 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 using the technology to truly save costs.
Next stage, the 3rd parties are now invited to participate the true estate deal and provide their input while the transaction has been blockchain created in real time. This reduces the role of the middleman significantly. If the offer is this transparent, the middleman could even be eliminated in some cases. The lawyers are 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 is likely to be known ahead of time that the offer is likely to be taken care of and the parties will honour their payments. This brings us to the last stage of the example. If the terms of the offer and the arrangements have already been completed, how will the offer be taken care of? The unit of measure would be a currency issued by a central bank, this 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 to this point? It’s not likely.
What is the perfect solution is? Develop a digital currency that’s not only as transparent as the offer itself, but is certainly the main terms of the deal. If this currency is interchangeable with currencies issued by central banks, the sole requirement remaining is to convert the digital currency right into a well-known currency like 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. A vital reason why money exists is for the purpose 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 entire world will be very significant. For instance, consider the concept of free trade. Prior to free trade, countries would import and export with other countries, but they had a tax system that could tax imports to restrict the result that foreign goods had on the area country. After free trade, these taxes were eliminated and many more goods were produced. Even a small change in trade rules had a big impact on the world’s commerce. The word trade could be broken into more specific areas like shipping, real estate, import/export and infrastructure and it is more obvious how lucrative the blockchain is if it may save even a small percentage of costs in these areas.