Let’s say that a new technology is developed that could allow many parties to transact a property deal. The parties gather and complete the facts about timing, special circumstances and financing. How will these parties know they are able to 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 once again to square one when it comes to utilizing the technology to save costs.
In 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 is being blockchain created in real time. This reduces the role of the middleman significantly. If the offer is this transparent, the middleman can also be eliminated in a few cases. The lawyers are 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 ahead of time that the offer will undoubtedly be paid for and the parties will honour their payments. This brings us to the past stage of the example. If the terms of the offer and the arrangements have been completed, how will the offer be paid for? The unit of measure will be a currency issued by a central bank, which means working 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 their end and this will imply costs and delays. May be the technology that useful in creating efficiency up to this point? It is not likely.
What is the clear answer? Develop a digital currency that is not only as transparent as the offer itself, but is in fact part of the 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 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 reasons why money exists is for the objective 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 world could be very significant. As an example, go through the idea of free trade. Just before free trade, countries would import and export with other countries, but they’d a tax system that could tax imports to restrict the result that foreign goods had on the local country. After free trade, these taxes were eliminated and many more goods were produced. Even a tiny change in trade rules had a big impact on the world’s commerce. The phrase trade can be broken 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.