to the

Buying crypto currencies, Bitcoin, Ethereum, blockchain, smart contracts

Unique Property Blog

Back to the Blog Index
Back to the Unique HomePage

Crypto-Currencies, Blockchain, and Smart Contracts

Okay, most people have heard of Bitcoin and Ethereum, but what about the rest?
First, let us start somewhere else. What is going on here? Unless we understand that we won't be able to get a handle on anything else.
In trying to continue from this point I have realised that it is impossible for me to explain a whole new technology in a couple, or even several, blogs. It just can't be done. I'd first have to explain how blockchains work. That is a big subject in itself. I would then have to explain smart contracts. That also is a big subject. I would then need to explain how certain tokens serve a need while others really have no real use.
What I will do is give a couple of examples of smart contracts and show how they will affect business over the course of the next ten years. I will then mention two or three tokens that are serving an important function. There are others, but I have already written a book on the subject (you can get it here), together with an update.
Let's start with something simple: A blockchain is a publicly maintained database of actions and/or events whereby the network is responsible for the accuracy of the data and its immutability. That is what makes it able to be trusted. Because it is a network it is not owned by anybody, and the nodes (computers) on the network are responsible for maintaining it.
That doesn't tell you much because I can't possibly go into minute details here and now. What this does mean is that a blockchain linked to smart contracts can become an intermediary. It's probably best if I give a couple of examples.
When people buy a house, their conveyancing lawyers race to the titles office to confirm the transaction. If the seller were to sell the house to two people at the same time, they could theoretically take off with the money. For the buyers, whoever’s lawyer gets to the Land Registry first owns the house. The other is left at the mercy of the legal system.
A cryptocurrency could rejig all this to complete a transaction only when both parties have given up ownership of what they’re exchanging. That gets rid of all sorts of risks. You can only sell what you own, and you both only receive once you’ve given up whatever you’re exchanging in return. It acts like an automated middleman, with a fraction of the cost. And it is all done by a smart contract.
Once the Land Registry is geared up for smart contracts transferring real estate will be done in minutes rather than months with a smart contract which will be purchasable in template format. The parties involved can jointly fill in the form, and sign it. It will then be sent to the registry where it can be actioned by a computer. Most of the registry staff will be out of work, and legal conveyancers will be a thing of the past.
An aside here. If you are thinking of training to be a real estate conveyancer I would suggest you think again. In ten years time you will be out of work, probably a lot sooner.
Virtually any business that requires a string of intermediaries can be rationalised using a blockchain. Here's another example. Blockchain can be used to solve real-world supply chain problems. The traditional supply (or value) chain is owned by intermediaries. This is the process the average supply chain takes: Production > distribution > processing > regulations and compliance > manufacturing > point of sale.
At every step of the way there is an intermediary taking a cut. IBM’s vision is that the blockchain will eliminate these intermediaries. That does several things. It cuts the costs considerably. It puts rather a lot of people out of work. It speeds up processes, and is more efficient.
Another important use concerns identity. Currently our identity online is controlled by the big corporations. They have access to our data, and we trust them to prove who we are to other companies. For instance, you can sign in to a lot of services using your Google or Facebook account.
These third parties (Google, Facebook, etc) solve the problem of trust. They are trusted. So when they say we are who we say we are, other parties trust them and in turn trust us.
The issue with this is twofold:
First: they have all our data and sell it on. This is how their business models work. This is why you get targeted adverts and popups.
Seond; they can revoke our identity at any time. If they don’t like what we’re saying of doing they can stop us saying or doing it very easily.
These are big problems that affect millions of people worldwide. One of the biggest potential uses of crypto is to solve this problem.
Through blockchain technology we will be able to take control of our own identity. There will be no need for third parties to say who we say we are because it will be provable on the blockchain.
We will also control who we give our data to and when. We could even emulate Facebook’s business model and sell our own data to make money.
There are a number of cryptos aiming to be the main player in identity already. But it’s anyone’s guess which ones will come out on top.
What is clear is that change is coming, and this change is going to be drastic. What is not so clear just yet is which businesses will come out on top and be the next Google or Amazon.
Next week I will expand on this, and talk a little about first, second, and third generation cryptos, and the internet of things. See you then.

Part 3 >>>>>

<<<<< Part 1

Subscribe to our email alerts on the housing markets both in the UK and abroad.

HTML Comment Box is loading comments...

Disclaimer     Privacy Policy