Let’s say the development of a new technology that allows many parties to sign an actual estate transaction. The parties meet and fill in the details regarding the timing, special circumstances, and financing. How do they know they are able to trust each other? They will need to confirm their agreement with third-party organizations such as legal teams, banks as well as government registrations and more. They are back to the beginning in terms of using technology to cut costs.
In the next step, third parties are invited to be part of the real estate transaction and contribute their ideas when the transaction is made in real-time. This reduces the role of the middleman significantly. If the transaction is clear, the middleman may even be eliminated in certain instances. Lawyers are in place to avoid miscommunication and lawsuits. When agreement are revealed prior to the time of signing, the risks are considerably decreased.
The technology being alluded to in the example is the blockchain technology. Blockchain technology companies can help businesses regardles of their size create a digital currency. Trade is the backbone of the economy. A key reason why money exists is for the purpose of trade. Trade constitutes a large percentage of activity, production and taxes for various regions. Any savings in this area that can be applied across the world 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 would tax imports to restrict the effect that foreign goods had on the local country. After free trade, these taxes were eliminated and many more goods were produced. Even a small change in trade rules had a large effect on the world’s commerce.
The word trade can 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 can save even a small percentage of costs in these areas.