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 is a commercial real estate broker and partner with Kohn Commercial Real Estate, Inc. and current CCIM Candidate; she 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 making them regarding your own Web3, crypto and blockchain journey.
Tracy has used computers since around 1986 and built her first computer from scratch using individual parts in 1999. She is a tech user and has worked with software & web developers and digital designers since the early 2000s.
Beginning in the early 1990s, she spent almost 30 years working in restaurant operations and large-scale event production. She has worked with brands such as the Food Network + Cooking Channel’s South Beach Wine & Food Festival, the City of Miami Beach, CAA Sports, AMEX Latin America, Sony Tennis Tournament and A Joy Wallace Catering & Design. She has collaborated with over 300 chefs such as Anthony Bourdain, Martha Stewart, and Daniel Boulud and with over 50 venues the likes of The Biltmore Hotel, Vizcaya, The Faena Hotel, and the sands of South Beach.
Tracy has been practicing commercial real estate since 2014 and focuses on working with property owners, investors and developers in the industrial sector. She is new to the Web3 space and is giving you her insights as a user who is working towards developing her own commercial real estate platform using blockchain technology. The goal is for Kohn Commercial Real Estate to be one of the pioneers in the commercial real estate space moving into the future. We aim 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.