Blockchain technology is a disruptive tool. Indeed, experts believe that it will redefine transactions the same way that the internet has redefined information, sharing and communication. Created a decade ago to support Bitcoin (BTC), the blockchain has grown exponentially. Today, many blockchain experts are employing the evolving technology in areas nobody ever imagined.
The Benefits of the Blockchain
Through creative destruction, the blockchain has brought some goodies with it. However, it is pointless soft-pedaling the turmoil it has also caused. In the simplest form, the blockchain supports multi-million worth of transactions without relying on trust agencies or third parties.
Additionally, it has another application — in the real estate industry. So, are you wondering how blockchain will transform the real estate industry? Well, you are in the right place, because we will break it down in a jiffy.
In the past, being wealthy was one thing, being able to liquidate your assets was quite another. But tokenization changed that completely. Basically, tokenization decentralizes the ownership of assets with the aid of cryptocurrency. Essentially, what the virtual currency does is to split the assets into blockchain-storable tokens.
Therefore, the implication of tokenization is that someone who wants to invest in a trophy real estate project can easily resell their share. Doing this is as easy as ABC. In short, all they need to do is to go through secondary trading to resell on the open market. 2019 will see the real estate industry transition to the blockchain. Yes, Templum Market is leaving an indelible mark.
Ever heard of smart contracts? Well, they are increasingly reshaping the blockchain industry. In this context, the function of smart contracts is to eliminate the middleman from the equation. This means that landlord and tenants (renters) can now reach an agreement without third-party interference. What is even more interesting is that smart contracts have no human interaction. By eliminating the middleman, smart contracts are also ridding the industry of any form of fraud.
Here’s how it works: the seller keys in the details of the property, and the buyer inputs all his information in the secure, encrypted block. Computer protocols check the legitimacy of the transaction to ensure that they are in order before proceeding. Lest we forget, Propy is doing a great job in this space. Ideally, smart contracts eliminate middlemen such as attorneys and brokers.
This brings us to the final point, property title. This is another aspect of the real estate business where blockchain will play an important role. Title insurance has risen to an annual revenue of $15B USD by clearing properties of old liens and debts.
Today, every municipality has its way of storing property data. But the blockchain can save time and money by democratizing the property title. Additionally, it can end the need for title insurance. That’s not all. It can also add specific information regarding construction and improvement to the title. No doubt, this will help people understand what they are buying.