The blockchain is a distributed database or can be called as a distributed ledger used for mainly recording and combining the transactions to a decentralized, secure ledger system. Blockchain creates a chronological chain of events, where data is securely stored and no individual can corrupt. The primary ability of any blockchain system is to authenticate and track every transactions in real time without any intermediary or third party such as banks.
With the advent of latest additions in blockchain technology, the potential ability of blockchain to transform any property business became seamless. It takes the business to next level growth promising speedy transactions with increased transparency.
According to the DBRS(Dominion Bond Rating Service) research report, Blockchain Technology is rebuilding the commercial real estate industry. The report advocates that people are brainstorming new ways of using the blockchain so that they fall on the right side of the business disruption.
Fueled with cryptocurrencies, Blockchain is soon revolutionizing the changing real estate market. With the implementation strategies like tokenization of fungible resources, purchasing rights to a true resource and changing over its incentive into a proof-of-benefit token, making moving resources more helpful, speedier, and less demanding to part.
In addition to the above, Blockchain technology in real estate also removes the formalities pertaining to legal agreements and also eliminates the need for paper money exchanges. With crypto-purchased real estate, the traditional investment process is replaced by an instant trading via blockchain. Whether you’re buying or selling cryptocurrencies in real estate, it is actually creating a big opportunity for diversification.
One of the greatest effects of Blockchain on business land would be a seamless, quicker contract administration process that facilitates bargains. With smart contracts, every part of a lease or sale agreement is automated, and also payments process remains active even after business hours.
Smart contracts would also speed up pre-sale agreement due diligence. Blockchain technology can help to verify identities, making the background check process faster. Parties involved in a contract can access it with a private key, and reduce the risk of hacking.
Real estate is hard to liquidize which accounts for difficulties in the diversification. With the implementation of the blockchain, one can easily resolve the problem. Blockchain innovation can possibly facilitate this procedure, if all the speculations are enrolled through the keen contracts, atomizing the trading of offers between speculators.
Blockchain technology has an added advantage that it uses the recording of land titles – a prominent challenging area where most information is still kept offline.
A traditionally lengthy process of recording and transferring titles can be avoided by this technology which leads to an added advancement of bullet-proof virtuality and transparency.
And more and more governments are looking to apply the smart contract as a means of a platform to store and thereby easily access the historical title records.
The land business has a market top surpassing $200 trillion, making it a standout amongst the most productive enterprises yet one of the slowest to receive the most recent advanced changes. Thus, innovation specialists have anticipated that the business is expected for a radical change. The blockchain is the innovation that can possibly cause an enormous interruption in this space; notwithstanding; that will rely upon how quick the innovation is incorporated into the purchasing and offering of the land business.
The land business is simply beginning to find out about the conceivable problematic advantages of the blockchain innovation. Currently, the real estate is largely dominated by large corporations and wealthy property owners. Blockchain innovation is ready to upset the land world amid the following couple of years in regions, for example, proficiency, exchange speed and buying adaptability. Effectiveness and speed contemplations could profit the business in the here and now by taking out centermen and enormous measures of printed material. Partial and incremental obtaining projects could build possession to new commercial centers. Over time, this technology will likely change the nature of the industry, through legislation and the industry itself must change before that becomes a genuine possibility.
Eliminating The Middlemen:
Blockchain helps to avoid the role of middlemen when a person buys or sell using real estate. Moreover, brokerages, lawyers, and even bankers can all be bypassed with the usage of cryptocurrency like Bitcoin for buying or selling the real estate. Blockchain will also eliminate the fees and repayments that typically go to intermediaries companies. Cutting down an extra of 2 or 3 percent on the price of the property when selling or buying can result in negligible savings. For example, a person buying a property worth $1000,000 will be able to save up to three percent ($30,000) on the total cost of the home due to the elimination of middlemen.
Smart contracts are one of the main feature provided by blockchain technology. Smart contracts are a computer program which verifies every transaction within the chain based on condition requirements. They are 100 percent visibility on every transaction happening within the blockchain making it highly transparent. With smart contracts, business parties can go out to play a business exchange that can commonly compose the conditions into the blockchain. After the states of the arrangement are executed, they will stay implemented consistently.
The investing sector is one of the area in the real estate industry, that urgently demands a change. Fortunately, blockchain has the ability to provide the much-needed backup for this sector. Land speculation is a business relatively restrictive for rich financial specialists in light of the fact that the business requires unlimited or expansive pockets. It is past the vast majority, be that as it may; with Bitcoin and other profitable digital forms of money, individuals can purchase partial possession. Accordingly, speculators from each wage range can put and take an interest in land bargains.
There are many real estate platform currently working on blockchain technology, most of them work on the basis of the above principle.
People can buy a fraction of the property in the form of tokens,
for ex; consider a house of 60 square feet where each square feet is equivalent to one token
1 token = 1 square cm
Now 60 tile is equivalent to 60 tokens. The value of the token is based on the total token sold during the ICO.