For instance, if a new technologies are developed that may allow many parties to transact a true estate deal. The parties get together and finished the details about timing, special circumstances and financing. How can these parties know they can trust one another? They’d have to verify their agreement with third parties – banks, legal teams, government registration etc. This brings them back to square one when it comes to while using technology in order to save costs.
In the next stage, another parties have become invited to participate real estate deal and supply their input even though the transaction is being created in real-time. This reduces the role from the middleman significantly. When the deal is this transparent, the middleman could be eliminated in some cases. The lawyers is there to stop miscommunication and lawsuits. If the terms are disclosed upfront, these risks are cut down tremendously. In the event the financing arrangements are secured upfront, it’s going to be known in advance the deal will be taken care of as well as the parties will honour the money they owe. This raises the last stage in the example. In the event the the deal and also the arrangements have already been completed, how can the deal get paid for? The system of measure would be a currency issued by a central bank, which means managing the banks once more. Should this happen, financial institutions may not allow these deals being completed without some kind of research on their end which would imply costs and delays. Is the technology that beneficial in creating efficiency as much as now? I am not suggesting.
What is the solution? Produce a digital currency that isn’t hardly as transparent because deal itself, but is actually area of the terms of the deal. If it currency is interchangeable with currencies issued by central banks, the only real requirement remaining is to convert digital currency into a well-known currency just like the Canadian dollar or the U.S. dollar which can be done whenever you want.
We’ve got the technology being alluded to inside the example may be the blockchain technology. Trade will be the backbone with the economy. A vital reasons why money exists is made for the purpose of trade. Trade constitutes a large amount of activity, production and taxes for various regions. Any savings of this type which can be applied around the globe will be very significant. As an example, consider the idea of free trade. Just before free trade, countries would import and export to countries, nevertheless they a tax system that might tax imports to limit the effect that foreign goods had about the local country. After free trade, these taxes were eliminated and more goods were produced. Even a small change in trade rules stood a large effect on earth’s commerce. The word trade can be divided into more specific areas like shipping, property, import/export and infrastructure and it’s also more obvious how lucrative the blockchain is actually it may save even a portion of costs of these areas.
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