Let's say that a new technology is being developed that could allow many parties to complete a real estate transaction. The parties meet and complete details regarding timing, special circumstances and funding. How will these parties know that they can trust each other? They should check their agreement with third parties – banks, legal teams, government registration, etc. This brings them back to square one in terms of using technology to reduce costs.
At the next step, third parties are now invited to join the real estate transaction and to contribute during the creation of the transaction in real time. This greatly reduces the role of the intermediary. If the agreement is so transparent, the intermediary can even be eliminated in some cases. Lawyers are there to prevent communication problems and lawsuits. If the terms are disclosed from the outset, these risks are greatly reduced. If financing arrangements are made from the outset, it will be known in advance that the transaction will be paid and the parties will honor their payments. This brings us to the last step of the example. If the terms of the transaction and the arrangements are complete, how will the transaction be paid? The unit of measure would be a currency issued by a central bank, which means a new relationship with the banks. If this happens, the banks would not allow these transactions to be concluded without some kind of due diligence on their part, which would involve costs and delays. Is technology useful for creating efficiency so far? This is not likely.
What is the solution? Create a digital currency that is not only as transparent as the operation itself, but that is an integral part of it. If this currency is interchangeable with the currencies issued by central banks, it remains only to convert the digital currency into a well-known currency such as the Canadian dollar or the US dollar, which can be done at any time.
The technology that is referred to in the example is blockchain technology. Trade is the backbone of the economy. One of the main reasons why money exists is for business purposes. Trade is a significant percentage of activity, production and taxes for different regions. Any economy in this field that could be applied throughout the world would be very significant. For example, let's take the idea of free trade. Before free trade, countries imported and exported with other countries, but they had a tax system that would tax imports to limit the effects of foreign products on the local country. After free trade, these taxes were removed and many more goods were produced. Even a small change in trade rules has had a significant effect on world trade. The word trade can be divided into more specific areas such as shipping, real estate, imports / exports and infrastructure, and it is more obvious that the blockchain is lucrative if it saves even a low percentage of costs in these areas.