Let’s say that the new technology is developed that could 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 are able to trust one another? They would need to verify their agreement with third parties – banks, legal teams, government registration and so on. This brings them back once again to square one in terms of utilising the technology to truly save costs.
Within the next stage, the third parties are now actually invited to become listed on the true estate deal and provide their input while the transaction is being 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 certain 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 paid for 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 now been completed, how will the deal be paid for? The unit of measure will be a currency issued by a central bank, which means dealing with the banks once again. Should this happen, the banks wouldn’t allow these deals to be completed without some sort of due diligence on their end and this could imply costs and delays. Could be the technology that useful in creating efficiency up until now? It’s not likely.
What is the solution? Develop a digital currency that is not only just as transparent as the deal itself, but is certainly area of the terms of the deal. If this currency is interchangeable with currencies issued by central banks, the only requirement remaining would be to convert the digital currency 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 may be the blockchain technology. Trade may be 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 of this type which can be applied across the entire world could be very significant. As an example, consider the notion of free trade. Prior to free trade, countries would import and export with other countries, but they’d a tax system that will tax imports to restrict the result that foreign goods had on the area country. After free trade, these taxes were eliminated and additional goods were produced. Even a tiny change in trade rules had a sizable effect on the world’s commerce. The word trade may be broken down 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 tiny percentage of costs in these areas.