BLOCKCHAIN IN REAL ESTATE
In recent times, the blockchain has gone beyond the technology that powers cryptocurrencies. It is a shorthand for a whole suite of distributed ledger technologies that can be programmed to record and track anything of value from financial transactions to medical records or even land titles etc. It has become expedient in running industries even beyond cryptocurrency firms. It has proven to be a trustworthy means through which transactions and trading can be carried out with ease, thereby relieving clients of certain protocols.
To be less ambiguous, What is a blockchain?
Blockchain is a decentralized means of recording data of any kind, so that they cannot be altered. It is said to be decentralised because data is apportioned and shared across computer networks called “nodes” .
Here is what Sarah Shtylman had to say about these nodes in the ﬁntech and blockchain counsel with Perkins Coie:
“As a reward for their efforts in validating changes to the shared data, nodes are typically rewarded with new amounts of the blockchain’s native currency— for example, new bitcoin on the bitcoin blockchain.”
It is a digital means of transaction. Here, information are stored in blocks and these blocks form chains… hence the name “blockchain”. Every block has a storage limit and once they’re ﬁlled, they’re connected retroactively according to their time stamps.
A major difference between database and blockchain is that while the former stores data in tables, the latter stores data in blocks. These blocks are connected to each other so that the link among the already stored information are glaring. This is why it is impossible for a block to be modiﬁed without disrupting all others.
Blockchains may be private or public. When it is private, only a selected few can gain access to already stored data but when it is public (as intended for this article), everyone can see the information surrounding the transactions.
BLOCKCHAIN IN REAL ESTATE
Blockchain technology is highly recommended for all industries, even the real estates. For a long time, the real estates had a conservative system of running and recording transactions on pen and paper until recently. Some blockchain applications have emerged exclusive to real estates. Some of these applications include UBITQUITY, SHELTERZOOM, ATLANT, HARBOR etc. These applications have helped hasten up transaction processes and have provided accurate and detailed data.
Here are some of the ways Blockchain can be integrated into Real Estate:
1. Safe documentation
Traditionally, documentation is exclusive to paper and pen. A major disadvantage of this is that these ﬁles can be mishandled and soiled by water or dirt. They can even be burnt up and in an instant, such important recordings can be lost. However, blockchain applications such as UBITQUITY which offer Baas (Blockchain-as-a-service) are safer and better means through which data can be stored.
The conventional method of owning real estate requires that a buyer purchases an entire property. Tokenisation will allow buyers come together by committing their resources to a pool to purchase. Land is not divisible in bits and can only be sold in square miles, kilometers, and acres.
Tokenization provides grounds for fractional ownership of properties. The act of tokenizing means that tokens are issued to digitally represent a real tradable asset, in this case, real estate. Tokens like this are called Security Tokens.
Tokenisation will also allow for creation of digital tokens which will represent the real estate. These tokens are a type of cryptocurrency and can be easily traded or exchanged in the crypto market.
Interestingly, this makes for good case in favor of integrating blockchain technology into real estate. Two vehicles real estate industry can achieve this include
Agencies – Organisations that buy and sell property on the blockchain examples are Lofty and Propy
Virtual Realtors – This covers for real estate in the metaverse. Major players include Decentraland, Sandbox etc. They offer you hyper-realistic graphics of your land and property and allow you to co-own an estate by entering an agreement with another real estate owner. Major players like Adidas, MTN Group, Samsung, JP Morgan, Snoop Dogg, Paris Hilton, and a host of others own properties on the metaverse.
3. Detection of Error and Fraud:
Since blockchains provide a clear cut means through which data can be stored, records can be tracked when any fraudulent attempt or activities arise. The American Land Title Association (ALTA) explained that 25% of all the titles are found to be defective in their transactions. All these can be prevented if the use of blockchain is adopted. Here, history cannot be erased and the system cannot be hacked because of its track record. Therefore, if there is an attempt for any form of fraud, whether modiﬁcation or alteration, there would be a notiﬁcation and required steps would be taken.
4. Bridge of Bureaucracy:
Certain protocols are observed in real estates which sometimes are unnecessary especially when blockchain can do the job in an instant. For example, the time spent on paper work alone can make these industries lose more money, time and clients than they gain. It can be tedious and time-consuming. The work involved in all these procedures can be brought to the bearest minimum through the use of blockchains.
5. Online Marketing
In a traditional real estate economy, transactions are usually offline where buyers and sellers get connected face-to-face. However, blockchains create platforms through which these connections and transactions can be done online. An example of this is ATLANT which makes transactions both for ownership and renting of estates possible online by means of tokenization. Here, these real properties can be sold as stock for exchange.
6. Elimination of Middlemen:
One of the most demanding aspects of real estates are the intermediaries and the fees they require such as legal fees. To save cost, blockchain should be integrated. Blockchains save clients these ﬁnancial burdens by recording and validating data so that no third part is needed.
SEE ALSO : THE ROLE OF BLOCKCHAIN TECHNOLOGY IN METAVERSE
Blockchain in real estate can revolutionize the way the entire housing sector is seen.
At the very least, the applications proposed by the groundbreaking technology can disrupt the entire real estate industry. From more secure transactions to shorter closing windows, blockchain real estate is the wave of the future, and one thing is for certain: We are just getting started.
Now is as good of a time as any to start considering implementing your own blockchain real estate applications and strategies. Those who embrace the trend early could benefit immensely.