How blockchain technology can change real estate market
This is a special post on How blockchain technology can change real estate market. A lot of people are becoming more interested in knowing more about the blockchain technology.
Ever since its inceptions, the technology has shown that it has the potential to overhaul the vast majority of business sectors seriously. The technology was initially seen as a platform with lots of applications in the financial industry. There are now many other sectors that have to delve into the blockchain technology. Some of these sectors have even made real-life applications of the technology. For example, we already have an interest in the logistics sector.
The possibilities of storing and verifying documents on the blockchain are being examined, and issues concerning the ability to collect conflict materials through the blockchain technology.
In theory, almost all processes where transactions are involved could benefit immensely from this technology.
Blockchain technology could also bring about significant changes in the real estate sector. Recall that it is not just the transaction of assets that take place in this sector, but also ownership of the assets takes place. I think this change will bring better transparency and accountability to the industry.
How blockchain technology can change the real estate market
The Problem in real estate market
The real estate market is still one of the largest investment sectors in the world. Despite its huge capital investment, it still has many problems that are mainly related to the recording of properties. For example, due to a lack of confidence in the regularity, intermediary parties are needed. These intermediate parties contribute to the slow process and more cost experienced in the sector. The presence of the third party also makes it hard for the primary two parties involved in a transaction to verify the information provided by the broker. These processes affect the transparency, makes it labor-intensive and time-consuming.
The whole process now relies on trust, which is hard to earn, and that makes buying or selling and the associated transfer of ownership more difficult.
The solution to the problems through Blockchain
The above problems lead to the question of how blockchain technology can change the real estate market by providing solutions for the above issues.
The good news is that some of the problems can be addressed comfortably by the adoption of blockchain.
How blockchain technology can change real estate market: Method 1
First of all, all information on the blockchain is managed in a decentralized manner. Decentralization, in this case, means that the management of the information is not entrusted to a single party.
In other words, all the parties that have access to the blockchain technology can also have access to the information that is stored in it. As a result of this feature, recorded agreements, property, and all other forms of information and data are recorded transparently and invariably.
With the blockchain, It is hard to record the wrong information. Information is only recorded when a consensus has been reached on the blockchain network regarding the correctness of the information.
In the case of a transaction, fewer third parties are required to mediate, which leads to savings in costs and time.
How blockchain technology can change real estate market: Method 2
Another advantage of the application of blockchain technology in real estate is the fact that blockchain technology will change the way investment is being carried out in the sector. Projects owners can now seek an alternative source of finance from the blockchain. There are a lot of willing investors, and most do not need significant physical collateral as the regular bank will need before giving you a loan. I have witness lots of projects get financial support through the blockchain.
Through projects that run on a blockchain, multiple people can easily invest in available properties. The blockchain due to its decentralized feature enables people to trust the system even after eliminating the third party agent. Transparency is also achieved as any data in the blockchain cannot be altered.
Using the blockchain technology makes the process more cost-efficient; it is possible to lower the investment threshold. This reduction in limit now makes it possible for people to invest in a property for as low as a hundred dollars ($100). This alternative form of financing primarily benefits small property developers and can also serve an essential social purpose, which is to combat the shortage of housing.
The above developments are not just theories but are being executed in some parts of the world by different organizations. The truth is that you can achieve more with less money by investing in the blockchain. All you need is a good company that can facilitate and makes sure you do not have to do everything in-house. They also make you risk diversification.
Blockchain technology is gaining ground in real estate, and it seems to bring a lot of trust and convenience. In addition to making it easier for a broader audience to invest in real estate, project developers, and especially the small developers, seem to be reaping the benefits. It is therefore expected that this development can help solve the housing scarcity experienced in some part of the world.
Generally, the application of blockchain technology is still in its infancy, and the real estate is still battling to adopt and integrate it fully. Technology will always have to prove itself in the long term. The expectations are high, and I can only pray and wish that we leave up to the expectations.
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