1 What Is Blockchain?
It sounds hard to understand, but the basic idea is pretty simple. Blockchain is the system that keeps an updated list of records or transactions across a network of computers, they provide a trustworthy, permanent and verifiable records of events. Greater market demand for transparency in the global economy has spurred innovation in real estate. After all, a blockchain network can decrease risk aversion by creating a trustless environment. Imagine that, two parties, sellers and buyers, don’t know each other, but in the blockchain transaction, the buyer can trust the seller actually has true ownership of the property because of the clear and undisputed history of property record; and the buyer can immediately prove their funds on hand. Tokenizing assets makes many procedures related to real estate transactions happen faster and at a lower cost.
2 How Blockchain Works?
Applying blockchain technology to real estate can achieve a general real-time database, all the details of the property can be recorded such as location, rental rate, house price, previous landlord, etc., allowing market participants to get more reliable data at a lower cost. What’s more, it allows multiple parties including tenants, operators, lenders, etc. to modify content.
The whole process no longer only relies on trust, or through transaction intermediaries. Because the transfer of ownership could be automatic as the transaction gets recorded to a blockchain and is shared among the participants who can check the process at any time.
2) Increase Liquidity
Real estate has always had a common problem: poor liquidity.
Blockchain will create a future where buying and selling properties is as easy as online shopping, you can add the property to the shopping cart on the website and complete the purchase process. The blockchain will ensure that the buyer obtains ownership deeds, and the seller receives cash (through digital currency). Even you can decrease investment amount through crowdfunding while using cryptocurrencies to greatly increase the liquidity of the investment. If the investor needs to change the household or transfer assets, it is now required to file in various government departments and usually needs multiple months of the process! However, the application of blockchain technology can be updated in real-time. When you want to take a shot, long time approval will disappear, and transfers can be completed instantly. Of course, all of which are recorded on the chain.
3 What Companies Are in Blockchain?
Facing the new emerging technology, there are hundreds of companies building projects with it and many are working to tackle parts of the real estate transaction. Largest players in tech like Facebook, IBM, Amazon, Apple, etc., all have major initiatives around promoting the utility of blockchain, and we have already seen some of these projects entering into the mainstream. So, it will be a matter of time when blockchain is utilized universally in real estate.
What questions do you still have about the blockchain? Have you heard the blockchain mentioned in your market? If you have any questions or want to discuss with us, please leave us a comment below or email us: firstname.lastname@example.org. We will talk about another Proptech, the impact of property management software on real estate. Keep expectations if you like our articles.