Let’s say a new technology has been developed that could allow many parties to do real estate business. The parties come together and finalize details on time, special circumstances and funding. How will these parties know they can trust each other? They would have to check their agreement with third parties – banks, legal teams, state registration and so on. This brings them back to the beginning in terms of using cost-saving technology.
In the next stage, third parties are now invited to join the real estate business and give their contribution while the transaction is created in real time. This significantly reduces the role of the mediator. If the job is so transparent, the mediator can be eliminated in some cases. Lawyers are there to prevent misunderstandings and lawsuits. If the conditions are detected in advance, these risks are significantly reduced. If financial arrangements are secured in advance, it will be known in advance that the work will be paid for and that the parties will honor their payments. This brings us to the last phase of the example. If the terms of the job and arrangements are completed, how will the job be paid? The unit of measure would be the currency issued by the central bank, which means that once again we have to deal with banks. If this happens, banks would not allow these deals to be concluded without some kind of in-depth analysis at their end, which would involve costs and delays. Is there a technology that is useful in creating efficiency so far? Not likely.
What is the solution? Create a digital currency that is not only as transparent as the transaction itself, but is actually part of the terms of the contract. If this currency is interchangeable with currencies issued by central banks, all that remains is to convert the digital currency into a well-known currency such as the Canadian or US dollar, which can be done at any time.
The technology alluded to in the example is blockchain technology. Trade is the backbone of the economy. The key reason why money exists is for the purpose of trade. Trade makes up a large percentage of activities, production and taxes for different regions. Any savings in this area that can be applied worldwide would be very significant. As an example, look at the idea of free trade. Prior to free trade, countries would import and export with other countries, but they had a tax system that taxed imports to limit the effect that foreign goods had on the local country. After free trade, these taxes were abolished and many more goods were produced. Even a small change in the rules of trade had a great impact on world trade. The word trade can be broken down into more specific areas such as shipping, real estate, imports / exports, and infrastructure, and it is more obvious how profitable a blockchain is if it can save even a small percentage of costs in those areas.