Everything You Need to Know About Blockchain and Real Estate
On your daily life, you might have come across several terms such as cryptocurrency, bitcoin and also blockchain being used in the current trend in business. Did you happen to learn what they are? Do you have an idea what blockchain is and how it has positively impacted the global economy? Well, don’t worry as I am going to take you through what is blockchain and all it comprises.
Blockchain is a global digital ledger technology which has a server that records all transactions without the use of a bank or any financial institution. When you purchase, sell or transfer cryptocurrency or even use coins to buy goods and services, a new data is created in the servers of the blockchain. The information is secure as no unauthorized personnel can get access to it not unless you are in the same network.
Why is blockchain important?
With blockchain, you can transfer money digitally without the need of a financial institution unlike there before when one was being charged a transaction fee and verification would take much time of about 3 to five days. With blockchain, there are no middlemen, unlike traditional hence the transaction will be faster and cheaper. All the transactions made are permanently recorded in the database, and no one can alter the information. It has increased transparency of data and also the accuracy. Also, it has created an efficient way for the real estate by creating a platform whereby both the buyers and sellers can transact easily and at a lower charge. Don't use plagiarised sources.Get your custom essay just from $11/page
Through the first application of blockchain technology, that is a cryptocurrency, and the market has been increasing in the last few years. Blockchain also holds a potential idea for the growth of sectors such as financial, voting, healthcare, real estate and also provenance tracking.
The current state of blockchain and real estate in the economy
The new technology of blockchain has now undertaken the real estate business. This is in line with the growth in the use of the internet around the world. It has enabled the investors in the current market to connect online with each other and make all the deals. Many countries have adopted this technology and are avoiding the use of the traditional method that was making them pay a lot of commission.
A few years ago, there was an investigation done by Sweden to see how application of blockchain for real estate was performing. The research was aimed at modelling a property that was purchased using blockchain technology. It checked on how both parties involved transacted the business and also the progress of the deal until it was completed. They finally produced a report that indicated how the business was conducted and provided a functional technical solution.
As time went by, the first property was sold using the blockchain technology. This indicated the successful sale of asset lather than the cryptocurrency themselves in the blockchain technology. This property was paid using Ether and was completed using Ethereum. In Uk, a commercial building was sold using blockchain technology. At that time, the US estate agent piper Moretti indicated that he had successfully helped four individuals purchase properties by the use of bitcoin. Also at that time, Redfin announced that more than 75 properties had been listed for sale by use of bitcoin.
In Australia, there have been talks that a Melbourne homeowner is willing to sell his property by the use of bitcoin as payment. More individuals are also willing to accept blockchain technology in their real estate business.
In the blockchain, all the transaction is conducted by the use of a smart contract that has digital rules to follow. It contains the condition that is to be followed by both the buyers and sellers and also the general agreement. Blockchain will be using agents to incorporate the rules or even the smart contract that will be responsible for doing the whole task. Blockchain technology is expected to grow as more transactions are being added to the ledger.
What made blockchain real estate companies rise?
Having a smooth and secure transaction by use of blockchain technology facilitated the rise and creation of many companies. The use of internet has also contributed to an increase of blockchain real estate business as investors are learning that they can sell or lease their properties at a less cost and a secure way. The following companies are among the blockchain real estate companies that are rising.
- Propy
Propy was one of the first blockchain real estate transaction to be completed. The companies token allowed an investor to sell his property through the use of bitcoins. This company is dedicated to offering an opportunity for the investors to purchase and sell properties across the border by utilization of blockchain technology. By this, the investors can save on time, cost and also security for their transaction. They enable all the party involved to do their deal online and are guaranteed of transparency and safety of their data.
- Propify
Propify is one of the first real estates that make use of the blockchain technology to offer marketing solution for various investors. It was founded in Australia and published all the real estate content on the platform so that any interested individual willing to purchase or rent the building can use their site. The company is committed to offering support security, trust, security standards and transparency through the use of new technology powered by blockchain.
- Rentberry
Rentberry used to sell berry tokens. They later learnt of the upcoming trend in business that is blockchain technology and saw an opportunity. They aim to make both the tenants and the landlords happy in their transaction. They have a platform that allows the tenants to create a secure and instant deposit, open and transparent application process and validate both the tenants and landlords score. The platform allows investors to purchase or sell properties in any of the cities. It is also very transparent and unites both the tenants and the landlords to come into conclusion.
- Shelterzoom
It is a New York-based platform that offers real estate solution by the use of Ethereum. They use this way to provide a secure and transparent real estate tools in the industry. Shelterzoom has a fully digital solution that guarantees investors the most cheaper way to buy and sell their properties. They have made it easier for the decentralize contract management. They also help sellers to reach to more buyers who have led to the growth of the blockchain technology.
- PropertyClub
It is another real estate platform that refines the way the industry operates using blockchain technology. It relies on smart contracts to perform transactions digitally using cryptocurrencies like Bitcoin or PCC (PropertyClub Coin) and thus, enhance the customer experience. It provides a platform for both sellers and buyers where they can easily transact and make deals online without meeting each other in person.
Challenges of blockchain technology real estate
Though the blockchain technology has come with a lot of goodies, it has faced some problems in the current market. There exist many technical and structural challenges that are hindering it from being fully implemented. First, the government regulations and policies are challenged to the blockchain technology for real estate as they don’t give clear guidelines for the blockchain transaction for the investors to understand.
Another challenge is that it is such a new technology that real estate and the industries it works closely with to get homes sold including mortgage, title and insurance have yet to prove out precisely what applications offer the best use-cases. It becomes difficult for the investors to decide on what app to trust and what not trust.
It is also becoming a challenge to shift title transfer and land registration form from a database that is state-controlled to a distributed ledger system. Many seem not to trust it as it is kind of difficult to implement.
Several blockchain technologies are existing in digital marketing, many of which have not been able to work together and solve the issues. This issue is making it difficult for the real estate companies to use the data that is available on both public and private Ethereum blockchain technology.
In the current real estate business, many investors are willing to make billions of global transaction annually. The blockchain space available is very little as you find that it cannot handle the demand in the market. With bitcoin, you can only handle five transactions per second; this is not close to the need of large scale companies that require high-speed processing in real-time.
As I conclude, blockchain technology for real estates Is gradually growing and providing a lot of data for the investors. It is expected in a few years that most landlords will have adopted this new technology and implemented it to their tenants to save on time, resources and also for the transparency in the process. Blockchain is also working on the way to improve the transaction to enhance the investor’s needs.