What Is the Importance of Blockchain Technology?
Assume a new technology is developed that allows multiple parties to transact a real estate transaction. The parties meet to finalize the details regarding timing, special circumstances, and financing. How will these parties know they can rely on one another? They would have to confirm their agreement with third parties such as banks, legal teams, and government registration, among others. This returns them to square one in terms of using technology to save money. Third parties are now invited to join the real estate transaction and provide input while the transaction is being created in real time. This significantly reduces the role of the middleman. If the transaction is this clear, the middleman may even be eliminated in some cases. Lawyers are present to avoid miscommunication and lawsuits. These risks are greatly reduced if the terms are disclosed upfront. If the financing arrangements are secured in advance, the parties will know that the deal will be paid for and their payments will be honored. This brings us to the conclusion of the example. How will the deal be paid for if the terms and arrangements have been completed? The unit of measurement would be a currency issued by a central bank, which would require dealing with banks once more. If this occurs, the banks will not allow these transactions to proceed without some sort of due diligence on their part, resulting in costs and delays. Is technology really that useful in increasing efficiency at this point? It is unlikely. What is the answer? Create a digital currency that is not only as transparent as the transaction, but is also part of the transaction's terms. If this currency is interchangeable with central bank currencies, the only requirement 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 mentioned in the example is blockchain technology. Trade is the foundation of the economy. Money exists primarily for the purpose of trade. Trade accounts for a significant portion of regional activity, production, and taxation. Any savings in this area that can be applied globally would be enormous. Consider the concept of free trade as an example. Prior to free trade, countries would import and export with other countries, but they had a tax system that taxed imports to limit the impact of foreign goods on the local economy. These taxes were eliminated as a result of free trade, and many more goods were produced. Even minor changes in trade rules had a significant impact on global commerce. Trade can be further subdivided into more specific areas such as shipping, real estate, import/export, and infrastructure, and it is clear how profitable the blockchain is if it can save even a small percentage of costs in these areas.
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"What Is the Importance of Blockchain Technology?"
was written by Mark
under the Finance
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comments. The article was created on 13 January 2023
and updated on 13 January 2023