Accelerating Market Standards
How Blockchain is continuing to drive market standards of value even higher in the near future.
One of the largest investment-driven markets today is the real estate market, currently estimated at 217 trillion globally. Interestingly, a recent market analysis conducted by Deloitte revealed that REITs across the board are “trading well below their net asset value”. The report goes on to cite a “new market expectation when it comes to value” as a potential cause for this sudden drop, and suggests that the outlying REITs that have not suffered this drop are concentrated on the development of infrastructure and technology, and are invested in adapting to the foreseeable future, which may soon find the value they offer to be insufficient in comparison to the vast array of alternatives being generated due to one particular technology on the rise:
The Blockchain.
Until recently, the exchange of information and the exchange of value were two separate entities. The existing generation of our Internet is being increasingly characterized by our inability to transfer value online due to the democratization of any and all information we choose to place there.
Blockchain changes everything, however, by disrupting a market that relies on the fact that (thus far), we have always been dependent on intermediaries to commit investments as well as to validate contracts and the transactions that are implicated within such business dealings. The total cost of these intermediaries, the brunt of which is worn by investing parties, is approximately 1.7 trillion USD a year. (Ripple).
Conducting investments and creating contractual stipulations for the transactions involved on the Blockchain presents a way to completely decimate these costs, which are imposed in spite of the extreme lack of efficiency within banking and other such intermediary systems.
To be clear, Blockchain does not obliterate the need for intermediaries simply due to its technological abilities to support transactions of digital, especially monetary, assets, instantaneously — it has the potential to record any and all transactions and critical data permanently and immutably. It is non-alterable, and contractually binding, therefore providing similar services to that of a comparable intermediary.
This offers an explanation as to why many commercial banks such as JP Morgan & Chase, despite their public disapproval of cryptocurrencies, are looking to invest in researching “commercial blockchain solutions”. They are facing the imminent reality that without this adjustment, their services may fail to meet the rising market standards for cost and timebound efficiency in the same way that blockchain does, and that their current role fills the gap needed to forge trust between investors and their engaging parties — a role that can be more than sufficiently brokered via blockchain technology.
Essentially, Blockchain’s decentralized ledger technology opens up the freedom of investing parties in that it affords them the ability to be independent of large intermediaries, and safely broker trust within projects they are interested in, knowing that any and all transactions will not only be recorded in real-time, but will be subject to the digital smart contract generated on the platform itself in order to protect their interests.
