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 could 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 again to square one with regards to utilising the technology to save costs.
In the next stage, the next parties are now invited to become listed on the real 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 deal is this transparent, the middleman can also be eliminated in some cases. The lawyers is 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 be known beforehand that the deal will 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 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 central bank, which means working with the banks once again. Should this happen, the banks would not allow these deals to be completed without some sort of due diligence on the end and this would imply costs and delays. Is the technology that useful in creating efficiency up to this point? It is not likely.
What’s the clear answer? Produce a digital currency that is not only as transparent as the deal itself, but is actually area of the terms of the deal. If this currency is interchangeable with currencies issued by central banks, the sole requirement remaining would be to convert the digital currency into a well-known currency like the Canadian dollar or the U.S. dollar which may 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 reason money exists is for the objective of trade. Trade takes its large percentage of activity, production and taxes for various regions. Any savings of this type that can be applied across the world will be very significant. As an example, look at the notion of free trade. Ahead of 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 effect on the world’s commerce. The word trade may be broken on to more specific areas like shipping, real-estate, import/export and infrastructure and it’s more obvious how lucrative the blockchain is if it can save even a small percentage of costs in these areas.