Saturday Night Live does a great skit every week called Weekend Update, and when Elon Musk guest-starred he played a character named Lloyd Ostertag, who came on the news show spoof. The character was a quirky, nerdy but likable kind of guy (similar to Musk himself) who was talking about DogeCoin, Bitcoin, and other cryptocurrencies, and trying – albeit unsuccessfully – to explain it to the host. It’s funny because here I am, now, trying to explain it to you – and though it’s a simple concept in the big picture, explaining how to get there is a bit tricky. But let me just say this: if you’ve ever heard anyone say Bitcoin can change the world? Truer words have rarely been spoken.
The Concept of Blockchain Technology
Let’s start with the basic idea of the blockchain, why it’s far superior to the system we have now – and how if cryptocurrency and the blockchain are implemented in a widespread manner during our lifetimes, we can look forward to this incredible evolutionary step. And if you think I’m exaggerating, it’s only because you don’t understand how it works – which I will make a valiant attempt to remedy. Blockchain technology is a method of storing financial data [in particular] and transactions, that has significant advantages over any other system we have. It has an inherent “side effect” of positively manipulating other aspects, or you might say principles, of human behavior and the way we conduct our business. Let me try to explain.
In essence, the blockchain serves as the foundation for a permanent, decentralized, completely transparent ledger of transactions that cannot be altered, deleted, or destroyed – in chronological order, and time-stamped. Security is achieved through the very nature of how it’s stored – in ‘blocks’ of data that are ‘chained’ together with cryptology, and in a way that cannot be undone or altered. These records are open-sourced, and so in other words are completely transparent, and can be accessed and viewed by anyone on the blockchain. This eliminates the need for any centralized governance, or need for any third-party authorization. Here’s what Forbes had to say: “[blockchain] is one of today’s biggest ground-breaking technologies with the potential to impact every industry.” Amazingly, nearly 15% of all financial institutions already currently use blockchain technology. It is designed very much like our Constitution is worded: “made for the people, by the people, and answerable to the people.”
With financial transactions kept in this type of ledger, there needs to be a form of digital currency for exchange that is widely accepted. Cryptocurrencies are already used in a variety of ways, for many different types of transactions – and are accepted in a myriad of places globally. Bitcoin is by far the most used and accepted form of cryptocurrency, as well as the one with the highest rate of longevity. Bitcoin and other cryptocurrencies use blockchain technology, but the two have separate functions, and blockchain can be applied to countless industries and applications. In a unique way, each type of cryptocurrency has a different application and serves different purposes, making certain specific cryptocurrencies valuable to those purposes. But that’s an entirely different subject for another [lengthy!] article. For the purpose of this one, crypto, and more specifically Bitcoin is being adopted in an amazingly high number of institutions all over the world.
There are several countries now that have either accepted and approved Bitcoin as an official currency or, have passed legislation allowing it to be utilized and regulated. El Salvador was the first country to accept Bitcoin as an official currency but has experienced a big problem with public acceptance. However, despite significant pressure on the Salvadoran President to reverse his decision, he remains defiant about the decision. The Central Republic of Africa also approved Bitcoin as an official currency. Multiple other countries have passed legislation regulating the use of cryptocurrencies, including Ukraine, the United States, Europe, and a myriad of others.
Smart Contracts and the Introduction of Real Estate
Smart contracts introduce the possibility of real estate transactions being done in cryptocurrency using blockchain technology, in a very real way. Using blockchain technology with real estate, according to Forbes; “significantly accelerates the usual processes of the real estate market,” and from the same article, “this technology is a real revolution for real estate professionals and investors alike.” So what is a smart contract? According to Wikipedia, it is a computer program or transaction protocol intended to automatically execute, control or document legally relevant events and actions, according to the terms of the contract. But how does this affect real estate? Good question! Let me explain.
A smart contract reduces the need for intermediaries in the blockchain’s well-designed peer-to-peer network, eliminating multiple transaction costs. It adds more liquidity to real estate assets and connects buyers and sellers directly. And because of the nature of blockchain, it eliminates fraud or any alteration of the record. The legal smart contract is legally binding, and self-enforcing, as well. Additionally, the speed of real estate transactions is much more efficient and quick.
So far, the cryptocurrency Ethereum is actually the most valuable in regard to smart contracts, due to its intrinsic design for this. We’re not to the point of tokenizing real estate and getting rid of all the usual red tape associated with these transactions, yet. But what an exciting and transformative future that may present!
Blockchain technology is a way for people globally to take back their control, from corrupt governments and leadership, entities they did not endorse, and policies with hidden agendas they did not create. It’s a system that intrinsically keeps people both honest and transparent and holds people accountable to the records they create. And regardless of anything else, since it seems we are moving as a society towards a more and more technologically focused and advanced future, these topics are the next in line for serious contemplation. Let’s all do our part in researching and educating ourselves, to make the best, most conscientious decisions possible. In this way, we can ensure the best future for generations to come.
Rochelle Harris is a passionate writer originally from Phoenix, AZ. who credits her success to integrity and determination. She has a great sense of humor, loves music and her family, and writes fiction and poetry in her spare time. She is excited about the New York experience and lifestyle! Follow Rochelle on Twitter at @LinguisticAnRky or get in touch at [email protected]