The Blockchain is the real star of cryptocurrency evolution. Since 2009, till date, we have seen this technology growing at a breakneck pace. Irrespective of its areas of application, Blockchain finds usage in all the business niche. Whether we talk about tracking the information or managing the supply chain, or even data security, Blockchain is applicable everywhere. We can say that Blockchain helps in streamlining the entire business operations. In this blog, we will be focussing on the use of Blockchain in real estate. If we talk about this sector, then it still remains one of the most undisturbed areas when it comes to Blockchain application.
Real Estate is one of the biggest and an unexplored sector by Blockchain. It involves colossal paperwork and security of information still remains a matter of concern even though we have digitization influencing this division. With Blockchain, we expect a huge transformation in the industry.
What is Blockchain?
A distributed technology that creates a ledger where time-stamping arranges the information in chronology. It ensures that the data is encrypted thus reducing the probability of information leakage or alteration. All these factors account for making Blockchain an inevitable technology of the future.
Provenance and decentralization form the base of Blockchain technology. All these features ensure that Blockchain remains a reliable platform for every data or money or information exchange.
It is these features of Blockchain that we are witnessing companies investing in exploring various avenues of application of Blockchain technology.
Blockchain and Real Estate Teaming Up
Gone are the days when people used to rely on paperwork when it came to property dealing. With the evolution of digitization, we saw every industry transforming, but still there remained areas where we needed more transformation and real estate was one of them. From title clearance to payment to the sale of property, every aspect of real estate had some discrepancies associated with it.
Blockchain aims to overcome these bottlenecks and streamline the entire business operation in the real state.
How will Blockchain resolve the issues associated with Blockchain?
- Smart Contracts– This is by far the best application of Blockchain that we can have. In real estate agreements a lot of moving parts vests with the middlemen. But with the Blockchain intervention, we can expect a lot of changes in this domain. A smart contract is a pre-programmed contract that has all the conditions agreed and mentioned in the agreement. These conditions have been pre-decided by the two parties. With smart contracts, we will have no middleman interaction.
The processing of payment takes place once the conditions mentioned in the smart contracts are executed. We can also link the smart contract payment with cryptocurrencies thus promoting the use of digital transactions and cryptocurrencies.
Additionally, smart contract execution doesn’t rely on the validation and approval of intermediaries. Thus it consumes much lesser time. The contracts will have all the details of the property and information is encrypted and secured.
- End-to-end transactions– There are companies like Propy who are working in this domain. Propy has come up with a platform for buyer, seller, title agents and brokers to come together through a suite of smart contracts on Blockchain to promote transaction. This system is one of a kind that had its first property sale on Blockchain in California. Many such platforms are being created which will have all the work related to a property like listing, selling, auction, etc. performing on one platform.
- Seamless Transactions- This is yet another important feature of Blockchain. When it comes to real estate, then there is a complex and lengthy contract procedure that one has to follow as the property changes hands. At present any real estate transactions are reviewed and intervened by several intermediaries which not only consumes time but at the same time, it also involves cost. With the help of Blockchain, we can have a direct connection between the buyer and the seller who can interact without any third party intervention and once the terms are agreed on the payment can be processed instantly.
- Title Clearance- One of the most significant areas of concern that bothers the real estate sector is title clearance. Often it becomes difficult to trace the owner of the property. Currently one has to go through a lot of paperwork for the same. But, with the help of Blockchain, we can easily trace the property ownership and its history without consuming too much time.
The intervention of Blockchain in real estate has just begun. There are still many areas in this sector which remain unexplored. Blockchain technology itself is undergoing a lot of changes before it becomes a part of mainstream business operations.