Real estate isn’t known for adapting quickly.
But it might soon have no choice. Use of blockchain real estate is on the rise. Over 50% of real estate investors believe the industry will adopt blockchain on a large scale.
So how does blockchain relate to real estate? And how does it impact the industry?
What Is Blockchain?
A blockchain is a secured list of open-source records, protected cryptographically. It originated as a way to solve double-spending in digital currency like Bitcoin.
In blockchain real estate, the blockchain is a record of transactions. These transactions can be viewed publicly. But each block in the chain is locked down — altering one block requires altering all subsequent blocks.
In practice, blockchain can be a secure means of creating verified transactions without following traditional lines of business.
Blockchain Real Estate
Blockchain is disrupting the real estate industry. Let’s break down a few major ways blockchain will have an impact.
Currently, real estate is locked behind a wall of middlemen. Buyers and sellers need to work with brokers, real estate agents, and government databases. All of these have associated costs. These middlemen act as gatekeepers that lock investors out from direct involvement in transactions. Working through these gatekeepers demands time and money.
But blockchain real estate is open source. That means new records can be created by anyone. These records are then locked down and can’t be amended, creating a watertight record of the transaction. This cuts out the need for traditional middlemen — and the fees associated with them.
Real Estate Stock Market
Blockchain could allow real estate to become its own stockmarket-style trading environment.
Blockchain would make all records of ownership public. Market listings would be created directly from the blockchain record. The property’s ownership can then be transferred once the exchange of currency has taken place.
This will create dramatic shifts driven by real-time supply and demand, just like the current stock market. Greater liquidity will allow investors to enter and exit the market quickly.
Real estate forgery relies on falsified documents like bank statements and property deeds.
Blockchain is a secure, entirely digital record of transactions. The blockchain would hold ownership documents directly, making forgery impossible. This would cut out the multi-billion dollar industry of real estate fraud.
In blockchain, transactions can make use of smart contracts.
Smart contracts automate transactions based on specific pre-set criteria. As soon as the criteria are met, ownership of the property is transferred. This allows real estate to change hands in real-time without administrative delay. Enforcement methods to ensure transfer of the property will become a thing of the past.
Transforming the Industry
These are just a few ways that blockchain real estate is poised to transform the industry. Whether investors believe blockchain will take off, they need to be aware of it and what it could mean. Staying informed will be the only way to adapt to the coming changes.
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