PRECISELY WHY IS THE BLOCKCHAIN TECHNOLOGY NECESSARY?

November 21, 2018 by

Suppose a new technology is developed that can allow many parties to transact an actual estate deal. The parties gather and complete the important points about timing, special circumstances and financing. How these parties know they could trust the other? They would must verify their agreement with any other companies - banks, legal teams, government registration and so forth. This brings them back to where you started regarding using the technology to avoid wasting costs.

Next stage, the third parties are invited to sign up agreement deal and supply their input as the transaction has made in live. This cuts down on role with the middleman significantly. When the deal is that this transparent, the middleman could be eliminated sometimes. The lawyers exist to stop miscommunication and lawsuits. In the event the terms are disclosed upfront, these risks are greatly reduced. If your financing arrangements are secured upfront, it’ll be known ahead of time that this deal is going to be purchased along with the parties will honour their payments. This brings us to the past stage in the example. In the event the the deal as well as the arrangements have been completed, how the offer be paid for? The system of measure will be a currency issued by a central bank, which means dealing with banks yet again. If this takes place, banks would not allow these deals to be completed without some sort of due diligence on his or her end and this would imply costs and delays. Could be the technology that valuable in creating efficiency up to this aspect? It is not likely.



What is the solution? Develop a digital currency that isn’t barely as transparent because deal itself, but is actually section of the terms of the deal. If this type of currency is interchangeable with currencies issued by central banks, the only real requirement remaining is to convert digital currency in a well-known currency much like the Canadian dollar or perhaps the U.S. dollar which is often done whenever you want.

The technology being alluded to inside the example could be the blockchain technology. Trade may be the backbone of the economy. An important reasons why money exists is perfect for the intention of trade. Trade creates a large number of activity, production and taxes for several regions. Any savings in this area that may be applied across the globe can be very significant. For instance, go through the notion of free trade. Ahead of free trade, countries would import and export with countries, however they a tax system that would tax imports to limit the consequence that foreign goods had around the local country. After free trade, these taxes were eliminated and many more goods were produced. A good small difference in trade rules had a large impact on earth’s commerce. The word trade might be broken down into more specific areas like shipping, property, import/export and infrastructure which is more obvious how lucrative the blockchain is when it may save obviously any good portion of costs in these areas.

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