Originally published in finmaps.com
For anyone who has ever been involved in real-estate transactions, they completely understand how complex and complicated the entire process can be. The unending number of parties involved from day one to the finish line can be incredible, including the likes of banks, brokers, government tax authorities, insurance companies, land registries and other intermediaries. Of course, there is always the threat of realizing that the property seller is not the actual owner of the property up for sale. For your information, title insurance is not available in all countries across the globe.
This problem is not unique to any specific country and even a home buyer in the United States may stumble upon such a confusing trail. Hernando De Soto, the renowned economist from Peru, has raised eyebrows in his remarks saying around 5 billion people across the globe are currently suffering from not owning any title over their property. This renders a whopping capital of $20 trillion not involved in the customary financial services ecosystem.
When there is a need to confirm, settle, exchange, sign or validate documents or financial transactions, there is also a rise in unnecessary friction. This unwanted guest can be eliminated, leading to an unlocking of material amounting to significant economic value.
Blockchain can come to the rescue of those individuals who seek to finalize transactions with multiple parties involved. This technology can be used by large entities to collaborate amongst a variety of organizational silos. Major cross-industry ecosystems may prefer to use blockchain to manage complex transactions across a number of different jurisdictions. Furthermore, governments may decide to take advantage of blockchain technology (if they haven’t already) to facilitate various measures for their citizens.
The Institute for Business (IBV) at IBM has released two new studies recently discovering that blockchain solutions for the commercial industry are being adopted rapidly across the industry of banks and financial markets. This trend has been dramatically faster than any initial expectations amongst most experts.
IBM has interviewed a large number of banks and financial market institutions, finding that 15% and 14% of both industries, respectively, have plans set for 2017 to welcome and adopt full-scale blockchain solutions in the commercial industry. The concept of mass adoption is far closer than many believe, as around 65% of all banks are expecting to adopt blockchain solutions in production activities within the next three years.
“Fast Forward: Rethinking Enterprises, Ecosystems and Economics with Blockchains,” is yet another recent study published by IBV outlining the method that blockchains can be employed to actually reinvent business as we know it. The method used by blockchains to eliminate impairments to render much needed new speed, better efficiency and higher transparency to a business network at all levels, from the likes of economics, ecosystems and organizations.
Shared ledgers are the hosts of blockchain construction, and where participants refer to write transactions with speeds very close to real-time, all leading to a chain that is unbreakable and transform into a permanent asset or transaction record. All parties involved in the transaction can view this action.
Five key attributes were found in the study newly emerging blockchain technology. This includes its distribution across a network, security matters, transparency concerns, nature based on consensus and finally, the subject of flexibility. These attributes together bear the potential to significantly impact current models of business in the years to come.
Consider how a blockchain platform with much higher efficiency and enhanced privacy can share various assets. The list includes the arts to contracts, and even cars to corporate bonds. Even assets based on identity, including health, tax records and product provenance can be included in this growing slate.
At a time when costs of transactions are decreasing and how organizations are actually governed is of more concern to many people, blockchains have the potential of establishing a new form of distributed business to be managed in a transparent method by applying smart contracts. These new bonds and agreements will be blueprinted upon laws.
In our emerging economy becoming further connected with blockchains, there will be more and more questions raised about the role played by third-party intermediaries in their effort of brokering trust and/or reconciling. This process evolves as we begin reinventing new trends eliminating any need for intermediation and reconciliation of such a kind.
Blockchains are on the verge of accelerating capital flow and creating enormous wealth, while helping improve our economies and increase the interactions involved. This includes domestic arenas and far beyond any geographic boundaries. Access will be accelerated for new business models and services that are designed and constructed on networks of blockchain. This development will also unlock those networks once locked from creating efficient value and allow them to participate completely in a global economy involving all parties.
While business efficiency, trust and value can be powerfully improved by blockchains, senior executives and such officials must carefully evaluate the fact where in fact blockchains can actually be employed with the objective of rendering enhanced efficiency and supporting newer models of business.
Three simple questions must be answered by all businesses in this regard?
1) At what speed should I take my steps forwards?
2) Is it possible to realize standards accepted across the network?
3) How can we cope with new & innovative revenue models?
In the years to come blockchain technology will allow making substantial economic progress possible, a concept that a larger number of people, enterprises, eco-systems and economies are already taking advantage of.