So, what does the blockchain and cryptocurrency really mean to you? Well, really everything.
Blockchain technology and cryptocurrency are fundamentally transforming our lives, unlike anything we’ve seen in a long time.
In fact, when you think about that transformation, you’ll put it up there with the other giant shifts in technology. I mean...
The printing press... antibiotics... railroads... steel... automobiles... windows... the internet.
Blockchain and cryptocurrency are next.
Right now, I can think of dozens or even hundreds of ways this transformation will impact you. But if I had to boil it down to two big ones, they would be...
1. Smart contracts on the blockchain.
2. Cryptocurrency as an investment.
I’m going to get into the nitty-gritty behind the first of these in a sec. (The second one I’m saving for our next installment.)
But first, if you didn’t get a chance to check out my first two articles of this multi-part series, take a gander at them. They go into Here's Why Cryptocurrency Is So Important! and What Is Cryptocurrency Anyway?.
But you certainly don’t need them to get your head around this article. (They’re only there if you want to dig a bit deeper.)
So, let’s get started!
Blockchain: Smart Contracts Will Revolutionize The Way We Do Business
I just went through a real estate transaction, and I probably don’t have to tell you there were a lot of hoops to jump through. And that’s in spite of a ton of electronic signatures and a tremendous amount of documentation done online.
In fact, all told there were about 135 documents that all needed some version of signatures, witnessing, and verification. 135!
And then there was the trip to the bank for the check, to the house for final inspection, and finally to the closing table.
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And that was just the tasks that I had to complete. You can add to that what needed to be done by the lender, the seller, and third parties like the closing agent, the title company, the real estate agents, and insurance agents, just to name a few.
And all those people and companies had access to different parts of my personal information in one form or another. So, I was trusting a lot of people with my information.
I was also trusting all these parties to do their jobs properly. If they didn’t, the transaction would have likely been delayed or canceled altogether. And I would be left holding the bag.
And finally, all these people and companies cost a lot of money in closing costs, commissions, and fees. A lot of money.
Now, let’s imagine executing this real estate transaction another way. Imagine...
• That me (the buyer), the bank, and the seller could put all our requirements into a list that a computer program could read. Once that list was completed and verified, the program would execute. I would get title to the property, the bank would lend me the money, and the seller would get paid.
• That the computer program that we just completed was duplicated across lots and lots of other computers, and for a small fee, each of those computers would make sure that the program was executed exactly as it was supposed to. There were no changes, modifications, or alterations of any kind.
• That the information that everyone put into the computer program was coded using cryptography. In fact, the cryptography and security around the transaction was so strong it would be virtually impossible to cheat.
• That the transaction didn’t require any lawyers, closing agents, real estate agents, notaries, or title agents. The only individuals involved were me, the bank, and the seller.
• That instead of taking weeks or even months for this real estate transaction to close, it would take only a minute or two, or even less.
• That the cost of the transaction would be pennies on the dollar compared to the old way.
So, if we could execute a real estate transaction like this, do you think anyone would go for it? Answer: without a doubt.
This is an example of a smart contract being executed on the blockchain.
As you can see, a smart contract is just a fancy vending machine. You put a required amount of money into the machine (the fee), the vending machine pushes and pulls its levers (a list of things to do), and it spits out what you want (your new house).
Smart contracts will revolutionize the way we do business, especially real estate closings like this one. And they won’t stop there. Smart contracts can be applied to all forms of finance, real estate, insurance, medicine, and voting, to name but a handful.
In fact, smart contracts can execute transactions that involve any exchange of money, property, or anything else of value. And they do so with complete transparency, without the need to trust anyone, at a low cost, and without any intermediaries. Plus, they can make this all happen in a decentralized, secure ecosystem in a speedy and efficient way.
Cryptocurrency: Ethereum Is The Big Player On The Block
As I’m sure you noticed, you have to pay a fee to execute a smart contract. You pay this fee using the cryptocurrency that runs the blockchain you built your smart contract on.
While there are a handful of smart contract cryptocurrencies out there, the big player on the block is Ethereum (ETH). With a market cap of over $250 billion, it’s second only to Bitcoin in the cryptocurrency asset lineup.
We’ll take a deeper look into Ethereum down the road, along with a handful of other cryptocurrencies that make smart contracts hum.
But before we get into specifics, in our next installment, we’ll take a deep dive into the second most important way blockchain and cryptocurrency will transform our lives...
By investing in it.
Disclosure: This contributor does own Bitcoin. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.