In this day and age, innovative technology almost always holds the key to success. One of the most innovative technological practices concerns blockchain technology. Blockchain is the technology behind the cryptocurrency industry. However, it is the mechanism that supports many more practices.
It can help:
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To make transactions more efficient.
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To optimize workflows.
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To streamline multiparty processes.
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For strengthening accountability.
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For asset tokenization to open up new markets.
Tokenization is the process of replacing sensitive data with unique identifiers that retain all key information about the data without compromising its security. The telecom industry is using blockchain technology to quickly settle roaming charges between competing carriers. Also, blockchain technology makes payments and logistics planning secure.
Furthermore, blockchain can be used to leverage real assets such as real estate apartments and houses. The point is that in many parts of the world people simply cannot afford to buy or own an apartment or a house.
The people's inability to afford to buy real estate reduces the intention to build new homes and thus the supply of real estate reduces. Reduced supply leads to the maintenance of high property prices while supporting the high cost of living, thus keeping inflation at high levels. But blockchain technology can provide a meaningful alternative for people to purchase a property as owner-investors and at the same time reduce inflation growth.
The suggested alternative is based on the idea of fractionating the ownership of an apartment or house into smaller shares that will thus be more affordable for citizens to buy and become co-owners of the property. This can be done with the Blockchain mechanism since with tokenization partial ownership of an apartment or a house can be secured. Consequently, as citizens become partial property owners, the number of owners will expand, at a time when in many parts of the world the property market is dominated by a relatively fixed number of residents or investors.
As more citizens will be able to invest in real estate, this will lead to new real estate construction and thus an increase in the supply of real estate, thus limiting the rise in real estate prices. Curbing the rise in property prices, such as house prices, will lead to containment of inflationary prices, boosting economic growth and prosperity which is the goal of governments and monetary policymakers.
Applying technology like Blockchain leads to "thinking outside the box". Thinking outside the box combined with a will has always been a good recipe for solving big issues. In this regard, it could be very effective to apply the aforementioned blockchain methodology not only to real assets but to apply the same methodology to many other assets. The idea is for participants to confirm their transactions through co-participation just like in crypto so that more people can participate in investments like real estate. More participation means more investment, more growth, and less inflation.
What is needed is to widely apply the concept of Blockchain and see if this innovative technology really holds the key to curbing inflation.
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