Blockchain and Real Estate: an overview of the sector


Blockchain will change almost every sector under the sun, but the effect will not always be the same. The great strengths of blockchain technology are efficiency, security and transparency, and each sector will be influenced slightly differently.

The real estate sector is an example of an industry that presents an enormous opportunity for technology, with different areas showing weakness and offering the possibility to technology to reign supreme.

How Real Estate connects to Blockchain

The fact is that distributed registers provide a level of efficiency that current systems do not have. Technology also prevents fraud and increases confidence in the system, since all information is public. Finally, even if the blockchain technology is transparent, it is also private.

Combine all these features and you have a big winner of innovation. One of the most important changes is the tokenisation of resources, which will reduce transaction costs and open commercial properties to more retail participants.

The three most sought-after objectives for blockchain technology are smart contracts, value transfers and record keeping.

Great current players

As you would expect, the largest companies have the greatest opportunities for growth in space. For example, Propy was founded in 2015 and raised $ 15 million for a platform that allows domestic purchases internationally. It is essentially AirBnb for foreign investors, but operates much more efficiently.

Harbor fulfills a more niche function by helping to list real estate and private equity properties in a SEC-compliant manner. There is tremendous value in adding liquidity to these assets and the ability to resell them adds even more liquidity. However, current regulations prevent trade in these security tokens, if at least for the time being.

Finally, you have a company like Ubitquity that focuses on the estate aspect of real estate, which is probably the place where the greatest inefficiencies occur. The innovation here is simple: humans make mistakes, blockchain no. Furthermore, it can not be incentivized to commit fraud and works as an AI solution to many of the problems in space.

What is Hold Up?

Right now, one of the biggest robberies is the nascent stage of technology. No one can decide on the correct consent protocol, and this has slowed down his chances of being accepted by the industry anytime soon.

Processing speed is also a common objection that needs to be addressed before a scalable solution begins implementation.

The real estate sector is expected to adopt blockchain technology based on the needs of its customers. If the occupiers or investors have adopted it will have a huge effect on their decisions to adopt it. Based on past experience, banks and insurers will probably be among the first to adopt the technology.

Technology and real estate analysts tend to agree that it is reasonable to expect widespread adoption within a decade, with many more individual applications formulated along the way.

As an investor, the best course of action is to investigate individual cases of use and make a decision based on which it is believed that it will have the strongest future in every space.

Featured image courtesy of Shutterstock.

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