You’ve heard the statement “blockchain in commercial real estate: the future is here.” Yes, this technology has transformed the face of the world. Now, the plug and pay system advances in the real estate industry.
Several techniques are making an impact in the present commercial real estate. But how would blockchain technology change the very foundation of real estate transactions?
Blockchain Technology Definition
It would be clearer to start first with the understanding of bitcoin technology. Bitcoin is the dominant cryptocurrency. And at the same time, is the most predominant use of the technology. Bitcoin technology defines as the “peer to peer electronic cash system”. And that means the accomplishment of online payments are without any financial institutions.
So, how does blockchain technology link with bitcoin technology? Blockchain becomes the go-between or channel that would manage the financial transactions. The function includes confirming the legitimacy. Of course, it is easy to describe that part of that function is maintaining its integrity of the process.
The technology is a type of “distributed ledger technology” (DTL). DTL is most famous for being the underlying technology on the side of Bitcoin. All the businesses associating bitcoin are on a digital, decentralized and public ledger. The applications stretch further from its first goal.
More so, its accounting technology is even more consistent and stable. Because of transparency, there is a restriction to fraud. Records of each transaction come as “block” and then joined “to the chain of previous blocks.” So, every person who has means of entry can view the change in the “common digital history.”
It’s important to note that the transactions created are unalterable or constant. No one can erase or distort any document type inserted. Each blockchain user obtains a complete copy of the blockchain. The text allows every user to authenticate any business within their copy of the ledger.
But, it’s also best to be aware that there’s concealment of the essential information. The heels of the “state-of-the-art encryption” secure identity, bank accounts, and encryption protocols.
The Concrete Benefits Of Blockchain In The Real Estate
Blockchain technology doesn’t need real estate intermediary.
The technology can perform the job of several real estate players. Blockchain can work as the real estate brokers, agents, banks, lenders, and even lawyers. Blockchain becomes the furthermost real estate intermediary. Without commission costs and closing costs, real estate investors can save a lot of money.
Moreover, they can also save time having not to wait for the processing of the paperwork. And, keeping everyone safe from real estate investment scams. To finish any commercial housing market draw in a lot of people. The accomplishment takes a lot of processes between the seller, appraiser, buyer, lending company, the bank, etc.
But blockchain database can save all the necessary data for the business. The database is an easy entry for the buyer and seller.
Blockchain technology allows investment properties to become liquid investments.
Property investments are in general illiquid investments because they don’t sell. Bitcoin technology, cryptocurrency, etc. yet, are liquid investments. That means selling or trading for cash is possible without decreasing its value. That’s a great benefit compared to illiquid investments.
Fractional Ownership Is Possible in Blockchain
Investment properties in real estate requires much investment too. But, with blockchain technology, fractional ownership will become a more common transaction. What does it mean? Investors can now buy and sell fractions of the properties as they want to.
The Security Of Real Estate Transactions And Assets In Blockchain
Coinify explained the benefits of blockchain technology in real estate:
• Could make transactions quicker
• Reduce fraud and hacking
• Make each transaction transparent
• Provide secure investments for everyone
VentureBeat observes one of the most critical applications of the blockchain. The form is in making the processes of its transactions quicker and safer. How can Blockchain result from a more trustworthy business? Not to mention the technology provides lower costs and speedier marketing?
The technology can make the method more transparent. Thus, building trust on all sides grow and minimizing red tape. The money transfer or escrow release happens after checking all the essential steps. Bank repayments and transfer of property titles also occur only after the steps. That’s a guarantee of any contract. Blockchain even can get rid of real estate fraud by providing “incorruptible database”.
Blockchain technology in real estate will redefine the housing market’s basic foundation. But the technology will also make the commercial more attractive to potential buyers. The impact will soon transform real estate industry. Making it more secure, transparent, and quicker business altogether.