Blockchain and the Future of Real Estate

[Rishit Shah]

Blockchain is being heralded as one of the most exciting technologies in years, and there's a good reason for that. The technology provides a way to leverage trust through distributed ledgers in order to create new business models. Blockchain has already been used successfully by startups like ubitquity (https://www.ubitquity.io/about/), which offers an immutable property record system that is backed by blockchain-based smart contracts on the Ethereum network. This post will explore how blockchain could transform real estate transactions and what it means for your future homebuyer and real estate investor.

Here are the 3 ways we think blockchain will transform real estate

1) Tokenization will allow for Real Estate to be traded like stocks

Tokenization will allow homeowners to trade their property the same way one would trade a stock. This opens up many new opportunities for investors and homebuyers by providing liquidity in an asset that was once difficult to get out of. The most important being fractionalized stakes, will make it easier for people with low income or credit scores to invest in properties they can afford, just like they would invest in stocks. While some companies already offer this using traditional systems, it is limited to upscale vacation homes. The ease of operation from tokenization will make the benefits of real estate more accessible to the average citizen and spread it across more asset classes. 

2) Less intermediaries required in real estate transaction

Blockchain will eliminate the need for intermediaries in real estate transactions. This means that there is no longer a third party to collect fees or protect against fraud or miscommunication between parties - eliminating opportunities for corruption and saving buyers thousands of dollars in closing costs. This eliminates complicated paperwork, which can be cumbersome and difficult to coordinate when working with international clients. The benefit here is not only convenience but also much lower administrative and legal costs.

3) Real Estate Fraud will become much less common

Real estate fraud can be difficult to detect when it happens, and blockchain provides a way of making transactions transparent. This is because the ledger system provides an immutable record that cannot be tampered with or changed without affecting other blocks on the chain. In addition to this, once information has been checked by all parties before being recorded in a block, there will no longer be any need for paper documents like deeds - saving time and money for both buyers and sellers. Blockchain's decentralized nature means that records are not stored in one centralized database where they could potentially be compromised through hacking, which makes it virtually impossible for someone to perpetrate real estate fraud undetected. Since information can be verifiable to peers, buyers and sellers can have more confidence in conducting transactions.

Blockchain is truly a revolutionary technology. While implementing this may have some legal hurdles and we are still far away from widespread use, we believe the benefits will outweigh any challenges to adoption. What do you guys think? Would want to use blockchain for your future transactions? 

[Eden Mendel]

Hey! first of all, very through and detailed post. I generally find it very hard to translate the potential of blockchains (specifically Eth) and I think you’ve done a great job without being technical.

As a newbie of both Real Estate and block chain development I defiantly agree with the potential. However, like you’ve mentioned; the legal hurdles seem like a steep hill and will require many regulations change (which I do believe will happen with mass adoption from banks/larger institutions). 

Happy to chat about the topic further!