I’ve come across many new projects recently stating the intention to “transform” a given industry through blockchain technology. These projects — regardless of what it proposes to do — often involve the creation of an online platform that requires the use of a native/new token. This has resulted in glut of altcoins. As of this summer, there are over 2000 cryptocurrencies available. Conducting transactions within a proprietary platform or “ecosystem” is the main (often only) use for most of these tokens. Some of them are also traded on exchanges.
Blockchain technology does not require the use of cryptocurrencies to function. It is entirely possible to use it without tokens. The tokenization of value is just one of its possible applications. Given this, it begs several questions about how the currency cryptospace operates. Why do projects create a unique token for what they propose to do? Why don’t startups develop platforms that accept existing cryptocurrencies, such as Bitcoin, NEO, ETH, Ripple, etc.? When contributors to ICOs but tokens what kind of value do they hold? To answer these questions, I’m going to first discuss some basics of blockchain technology. Then I will delve a bit deeper into its application in the real estate sector.
Blockchain Has Many ApplicationsBitcoin is just one application of blockchain
When you hear of someone buying something with Bitcoin you can think of it essentially as a cash sale. The BItcoin is cash that has been converted to Bitcoin first. Unlike cash, however, there is no physical coin. Bitcoin is a digital asset. The blockchain assures it’s value, not a bank or government. Bitcoin transactions are executed and validated by a consensus of thousands of dispersed nodes in the blockchain network. These nodes essentially act as “witnesses” to the transaction.
However, Bitcoin is just one application of blockchain technology. It is a means of ...