The power of smart contracts
Many interested in cryptocurrency do not understand what the advantages of using smart contracts are. I will try to briefly describe some of their possible applications in the annex to the real world.
- As soon as the status of the cryptocurrency allows it to be used as pledge you can use smart contracts to organize it.
All credit transactions with pledge will be easier to conduct through the blockchain, without problems with the assessment of the borrower’s pledge, and smart contracts will ensure the rights of both the borrower and the lender.
2. Imagine that all information about the right of the use / the ownership of a particular asset or of a personal item is found in the blockchain and the fact that the transfer of the right of the use / the ownership from one owner to another occurs through a smart contract. The blockchain already has the entire history of changes in the value of an asset, including the history of its owners. This allows you to radically simplify the accounting of various kinds of assets / items, simplifying both the lease and the temporary transfer of property rights, and the change of ownership. There is no need for papers and other unnecessary things from the last century. The idea can be developed to the idea of group ownership of property.
Since the registration of ownership of assets / items is greatly simplified, as well as their transfer, it will be possible to own the asset / item to several persons at the same time. Any electronic device that more expensive than 1XTZ will have a microcontroller that supports the execution of Tezos smart contracts, and during its operation it will determine whether a person with a specific private key has the right to use it. Rent is built on the same principle. If you use this device, funds will be debited online to within a few seconds.
3. For the real estate, the costs of the cadastral and other document flow will fall significantly. As well due to the reduction in the number of required personnel. Surveyors, valuator, and chiefs will remain. All the paper fraternity which is shifting the papers to all these chambers (including through the Multifunctional Center) will disappear.
You went to public services, confirmed the ownership transfer by an electronic signature, stated one month as the term of the insurance execution (when at the dissolution of the transaction for the specified reasons, the amount of the purchase / sale, which is immediately attached in the blockchain to the transaction, is returned to the buyer, and the asset to the seller).
The buyer, for his part, transferred the required amount of cryptocurrency to the seller’s address with the note “execution by a smart contract, the transaction is executed”.
Each asset in the blockchain will have a link to the database with its description with a list of information from the valuation agency (private or public — not important). No valuation? Well, well, maybe we’ll see if we don’t find other options. Conversation? Do you need them? There is a price, there is an asset. So agree or disagree. What other options? Do you buy a product in the store remotely, do you bargain?
So it will be with real estate the same. The fact that trade is now on is the cost of the gap due to the relative opacity of the real estate market. When the technology is worked out to the level of Internet trading of household appliances everything will be a thing of the past. Either you work from the market price and sell / buy, or you are out of the market. There are no risks. The Ownership right is in the blockchain. The fact of payment is in the blockchain, to the seller’s address. Is the transaction done? It is. Congratulations, the item has a new owner. Well, the maximum is there will be the insurance period of the transaction, when the transaction can be canceled (at the same time, the seller will not be able to pay for this item, the payment is being frozen for the insurance period of the transaction). The same scheme works for almost ANY asset / item.
4. Or an idea that can radically change the world, like an open exchange of forecasts. Anyone who is able to correctly assess trends and give reliable forecasts will be guaranteed to receive remuneration. This is going to change a lot in the reliability of the assessment and the effectiveness of our civilization, when really worthy forecasters receive a well-deserved reward, and all sorts of charlatans who have neither abilities nor talents, but broadly telling about the future, will remain out of business.
Generalizing the possible spheres of application, the blockchain and smart contracts give a radically different level of accounting for any assets / items in a transparent way for all participants. Almost all financial / administrative / economic activity of mankind falls under the last wording, in the part related to valuable assets or items that are potentially interesting for all participants of a particular blockchain, where are no photos of a beloved dog or other private information that is really interesting only to the owner.
This is the question of cargocult adding a gigabyte of a personal information into the blockchain. The level of social security, as an option, is suitable for storage in the blockchain (for example, China is developing a system of social rating for its citizens). There are definitely no Terabyte archive of home photos.
But for confirmation of the ownership of the object (whether it is real estate, cars, etc.), blockchain is the most right place.
Co- founder GridEx