If you want to understand bitcoin, you have to understand the part of bitcoin that has everyone talking about why it projects to potentially disrupt so many industries; and that’s the blockchain.
Whenever you make a financial transaction, you need a babysitter – someone to make sure that the $100 you gave to HEB, a friend, or the Great American Cookie is legal and verifiable. That babysitter has traditionally been the banks. And like most babysitters, they cost money and don’t always do their job.
As Don Tapscott, during a 2016 TED talk, explained about the problem with banks:
“They’re centralized, which means they can be hacked, and increasingly are. JP Morgan, the US Federal Government, LinkedIn, Home Depot, and others found that out the hard way. They exclude billions of people from the global economy – for example, people who don’t have enough money to have a bank account. They slow things down. It can take a second for an email to go around the world. But it can take days or weeks for money to move through the banking system. They take a big piece of the action, around 10-20% just to send money to another country. They capture our data, which means we can’t monetize or use it to better manage our lives.”
The blockchain is what promises to end the adventures of babysitting by using a form of babysitting that is shared, using many hands to make light work (or peer-to-peer). The basic philosophy behind this technology is to use a safer, efficient and more economic network of asset management. And not just financial assets, but bonds, stocks, swaps, film, votes, energy, and even identity.
If this still sounds like gibberish, here’s a handy, graphics happy two minute intro to understanding the blockchain.
A lot of industries project to be affected by the blockchain technology; healthcare, big business, and most anything involving data.
That’s where real estate comes in. As the Newsweek article observed, “this technology has lots of potential uses beyond banking. It’s now possible to use the blockchain as a database that keeps all kinds of records in a secure and easily accessible place without laborious, paper-heavy processes. For example, IBM is helping Maersk, a Danish shipping company, use the technology to cut down on the number of people required to track millions of shipping containers around the world.”
When it comes to real estate, there are a lot of different roles involved in ensuring each sale; the verification of ownership, the transfer of property deeds, and the validation for accurate documents.
The blockchain cuts through this middleman labyrinth. As Ragnar Lifthrasir notes, it can functionally substitute a property deed. “Trading a property peer-to-peer with the blockchain would eliminate the need for things like title insurance,” he argues. Lifthrasir is faithful enough in bitcoin’s technology that he’s created his own real estate/bitcoin startup, called the International Blockchain Real Estate Association.
Lifthrasir’s vision echoes what some believe is more than ‘mere’ currency, but a business model of the future. The abundance of third parties who oversee typical property transactions can be complicated, if outright confusing. A woman in Honduras had her house destroyed for nothing more than that another person was registered as its owner.
No matter how abstract, and positively weird this all sounds, consider that a home has already been bought with bitcoin. In California, after a lot of debate about how exactly a bitcoin transaction would work, a home buyer and the real estate agent came to an agreement. The man went on to make a profit of $1.3M, which he then used to buy a Lamborghini.
How far reaching is the blockchain? Enough for the Centers for Disease Control to test it for disaster relief, hoping real-time recording and quick analysis can be the holy grail for public health practitioners. Europe’s largest port is hoping it will be the gold standard for their research lab. The World Economic Forum believes that blockchain will eventually create an “internet of value” – a cryptic expression referring to how technology promises to assign the worth of, well, everything.
In India, government initiatives for infrastructure are being stored on blockchain technology. Startups interested in resolving the intellectual property of artists have taken advantage of bitcoin’s innovations. Even forms of government and the voting process itself, so called liquid democracy, is being sketched by bitcoin’s underlying technology.
For a Free Credit Evaluation to make sure you have a plan B (good credit) in case the blockchain gets hacked and destroys the world, Give Us a Call at 210-520-0444 or Text Us at 210-960-2498.