Real Estate x Blockchain
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Before we talk about how blockchain effects real estate we need to first know what is a blockchain and what can be found inside a block.
Blockchain is essentially an electronic structure composed of a chain of blocks that contains information or data that is distributed in a decentralized database or ledger where information is made public and anyone can have access to it. So instead of having a single company or database containing all the information, the information is now scattered across an entire network.
Now let's dive into what can be found inside the block. Each block inside the block chain contains three things;
Data
The data contains important information about a specific transaction such as the sender, the amount, and the receiver.
Hashcode
The hashcode is an identifier code of each transaction and functions like a fingerprint that makes the transaction unique from all other transactions.
Hash of the previous block that it is linked to. Now every time a new transaction is recorded or every time there's a change of information within the block, a new hashcode will be generated automatically. This mechanism then creates a continuous chain of blocks that are all linked together starting from the original block.
Block chain technology can have a wide range in impact on the real estate industry, this includes providing new ways for buyers and sellers to connect as well as solving some traditional real estate problems.
REAL ESTATE PROBLEMS VS BLOCKCHAIN APPLICATION
Lack of transparency vs blockchain's transparency;
Corruption and money-laundering continue to exist in the real estate industry whereas in blockchain applications this problems can be prevented because everything is on the block chain to see, verify and trace its origins and it gives full transparency. It also allows people to know and verify who did what and when it was executed.
Intermediary fees vs blockchain's low-cost fee;
If a person purchases a property for investment or for personal use a lot of fees will be incured along the way; transfer fees, lawyer fees, inspection fees. These are all examples to name a few. In comparison blockchain technology can reduce the responsibilities due to smart contract reducing the fees typically required to buy real estate.
Lack of liquidity vs blockchains liquidity;
Today if a person wants to sell a property then the seller must go through the lanky process of finding buyers, negotiating the price, processing the documents and mortgage and so on before the purchase can be finalized and paid.
Properties can be easily traded as tokens and trading platforms will eventually allow sellers to tokenize their assets allowing them to trade them as stocks and sell them through to token sales on a platform. Because the seller does not need to wait for interested buyers to prove they can afford the tokens or they don't have to wait for them to go through the entire process, then the entire transaction is short. The tokens can then be collected in exchange for Fiat currency with the buyers owning a percentage of the property.
Other problem with real estate;
