Cryptocurrency, Blockchain and Smart Contracts

What is cryptocurrency?

The more you hear about Bitcoin, cryptocurrency (crypto), blockchain, and smart contracts the more you can’t help but to wonder how this relates to your industry and/or career. While you may not understand what it all means, you may be even more confused as to where to even begin to find out. Before we decide how it relates to our careers and, more specifically commercial real estate, let’s first try to answer some basic questions beginning with my favorite: What is Cryptocurrency?

In the article What Is Cryptocurrency? Basics of Bitcoin & Blockchain Technology published by TD Ameritrade, the definition states “Cryptocurrencies, also referred to as coins, are virtual currencies secured through one-way cryptography. Many are based on public blockchain technology, a distributed ledger of all transactions that’s decentralized and can’t be changed under most circumstances. Unlike traditional currencies, such as the U.S. dollar, they’re not controlled by any central government or authority.”

What makes cryptocurrency valuable?

Now that we have a brief definition of cryptocurrency, but if it is digital and not physical, what makes it valuable? To answer this question, I suggest reading the book The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous. This book is a fantastic reference for individuals, businesspeople, those in tech, or anyone really. It is a lesson is the history and use of money as much as it is a look into what makes Bitcoin a monetary store-of-value.

In the book’s foreword, Michael J. Saylor, CEO & Chairman of MicroStrategy based out of Miami Beach, FL said “it was this book, more than any other, that provided the holistic economic framework that I needed to interpret the macroeconomic forces reshaping our world, distorting our markets, and buffeting corporations….The book contains perhaps one of the best articulations of the virtues of strong money and the dangers of weak currency yet presented in modern business literature. The Bitcoin Standard also masterfully debunks the myths of modern theory and the broken ideas that have dominated the fiat economic school of thought since the early twentieth century.” I could not agree more with his assessment of this book and his claim that this book should be part of the required reading lists of modern society.

What is blockchain technology?

So now we have a definition of cryptocurrency, we see that it runs on a blockchain. That leads us to the next question, what is blockchain technology? According to IBM’s Blockchain for Dummies, “a blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” As a technology, the goal is to create “an efficient, cost-effective, reliable, and secure system for conducting and recording financial transactions.” To be clear, blockchain is not referencing Bitcoin, but the underlying technological foundation that supports applications like Bitcoin.

How is blockchain useful in business?

Now that we have a small understanding of what blockchain technology is, how is it useful in business? According to Entrepreneur Magazine’s article 4 Ways Your Small Business Can Benefit From Blockchain are:

  • as a new form of payment
  • as a safer and cheaper option for cloud storage
  • as a leverage for smart contracts
  • as a means for raising capital

What is a smart contract?

For the next question, let’s briefly look at what a smart contract is. Probably the easiest to understand definition I have seen so far, I found on Investopedia’s website and states “a smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code…. [they are] computerized transaction protocols that execute terms of a contract. Smart contracts deployed to blockchains render transactions traceable, transparent, and irreversible.”

Now that we know a little bit more about cryptocurrency, blockchain and smart contracts, click here to read more about Blockchain and Web3.

About the author

Tracy Kohn, CCIM is a commercial real estate broker and partner with Kohn Commercial Real Estate, Inc. She has a passion for technology and innovation, and she is on a mission to create a commercial real estate platform using blockchain technology. She wants to share her journey and insights with you as she explores the Web3 space and learns how to leverage crypto and blockchain for her business.

Tracy has been using computers since the 1980s and built her own computer from scratch in 1999. She has worked with software & web developers and digital designers since the early 2000s. She also has a rich background in restaurant operations and large-scale event production, working with famous chefs, brands, and venues for over 25 years.

Tracy is not a financial advisor, nor in the tech industry, and is not a software developer. All statements made in this blog are her personal opinions and have been compiled through her own research and trial and error. It is strongly recommended that you do your own research and make sure you are comfortable with your decisions prior to taking action regarding your own Web3, crypto and blockchain journey.

Tracy is excited to be one of the pioneers in the commercial real estate space moving into the future. She aims to provide a complete digital and physical brokerage experience that allows for the smooth and transparent connection and completion of real estate transactions across the world.