Will our children be buying their cars with blockchain?

The car buying process is an interesting one because it is the largest financial transaction that most of us are directly involved in making. Sure, a house or apartment costs more, but we don’t really get involved in paying for it. That all happens behind the scenes in a murky world inhabited by solicitors, banks and real estate agents, and’ like expectant fathers in a bygone age, we just sit chewing our nails waiting for the experts to tell us it has all happened. 

When buying a car, however, we get down and dirty, arranging the finance ourselves, whether that’s signing the loan agreement, writing the check or withdrawing the cash. 

Goodbye to cash

That raises a thought-provoking point, in as much as the process of car buying has changed dramatically over the years. 20 or 30 years ago, cash was king, and if you wanted to get the best price in an auto dealership, waving some greenbacks under the dealer’s nose was the way forward. 

How times have changed. A few months ago, a freelance web designer walked into a dealership near Poughkeepsie said he’d like to buy the 2010 Volvo S60 they had on sale. He offered them the asking price of $7,000, then and there, in cash. Not only did they refuse, their expression of horror left him wondering if they were about to call the police. 

Today, we are getting ever closer to the concept of a cashless society. We use phone apps and contactless cards for even the smallest transactions, so it is perhaps unsurprising that using cash for such a major purchase now seems unusual and even a little suspicious. But what does the future hold? Will today’s methods of car purchase, using bank transfers and debit cards, seem just as alien to the car dealerships in 2050? Quite possibly, and it could all come down to one thing – digital currency.

Changing the way we invest and spend

Today, our wealth and investments are typically far more complex than they used to be. It’s no longer a matter of having a checking account, a savings account, a pension fund and, for the lucky ones, maybe a cabin by a lake somewhere. These days, many of us have numerous investments in the forms of stock, options and futures. We might also have funds tied up in online trading accounts, as the best Forex trading simulator software has made currency trading a form of investment that anyone can get involved in. 

In other words, there is a growing trend for our wealth itself to take a form that is not simply expressed in dollars and cents. If we are into Forex, it might be held in various currencies, or it could equally be in stocks, bonds and even precious metals. How will this affect the way we spend in future, particularly on the biggest purchases of all?

Is blockchain the future of buying?

When the guy in our example earlier went to buy that $7,000 Volvo, he took the old fashioned approach of converting the money in his bank account into dollar bills, and we know how that ended. It’s an unnecessary complication in today’s world of instant bank transfers. Yet the way our wealth is manifested, we go through a similar process in converting stocks, gold or Japanese yen into $7,000 in the bank to transfer it to the dealership.

This, in itself, is convoluted and will involve numerous transactions, broker fees and so on. Isn’t there an easier way? Blockchain transactions are met with the suspicion that greets any innovation, and largely due to the volatile trading value of Bitcoin. However, the technology behind crypto seems like an unstoppable force and is certain to become the transaction method of choice in the future because it has so much going for it.

It is a digital-based means of making transactions in a digital world. Transfers are instant, secure and completely transparent. And best of all, by keeping everything in blockchain, you are able to avoid losing percentages in transfer and brokerage fees every step of the way. 

Bringing order to complexity

We could be approaching a watershed moment. Every year, more and more of what matters in life is conducted online, whether it is doing our daily work, keeping up with friends or managing our wealth. At present, there are certain non-digital factors that we are hanging onto. Insisting on ink signatures on important documents is one example and having dollars in the bank is another. 

Use of digital currency as the base from which we can instantly transfer stocks, trade Forex or, indeed, buy a previously owned Volvo, will signal the next great step in our financial evolution, and even more importantly, will open a world of increased choice and flexibility to people of all income levels and backgrounds. 

It will also render those awkward bank transfers and fees as obsolete as a briefcase containing $7,000 in cash. The future is going to be a very interesting place.