There are indications that blockchain technology will revolutionize real estate markets in a fashion similar to the impact the internet made on the way individuals share information and communicate.
Blockchain was created some time ago to support bitcoin, but today it is used for much more. The technology is responsible for hundreds of companies being launched, a number of fortunes amassed, and billions of dollars of funding being produced.
The essence of blockchain technology is its ability to facilitate transactions between people and companies without the use of intermediaries like banks and credit card companies. The following three factors involving blockchain technology makes it especially beneficial to the innovation of real estate markets.
Use of Tokens
In the past, it was necessary for investors to already possess a considerable amount of wealth to own lucrative real estate assets. They would also need to be in a position to be able to endure years of ownership before liquidating these assets. This all changes with tokenization.
Through tokenization, the ownership of assets can be split up with the use of cryptocurrency to divide real estate assets into tokens that can be traded using blockchain technology.
Individuals now can claim partial ownership to properties to which they never would have access to in the past. The investor will also be able to liquidate the tokens they own the same way they purchased them.
The smart contracts used with blockchain transactions are completed entirely between buyers and sellers without middlemen. These transactions can be completed much faster than with traditional contracts and the opportunities for one of the two sides to commit fraud are decreased.
The information shared by buyers and sellers during the smart contract process is transferred on a secured block that is 100 percent encrypted.
Title insurance is a lucrative business that operates by providing guarantees to buyers that the properties they purchase are free from debts and liens. Presently, the cities and counties where properties are located are responsible for storing property data in the manner they see fit.
The opportunity to decentralize property titles using blockchain technology could save time and money and possibly eliminate the need to purchase title insurance. It is also possible added information regarding things like construction, property damage, and property improvements could be included to provide the buyer with a clearer picture of what they are purchasing.
The coming year should see a larger impact from blockchain technology on real estate investing. The wealth of cryptocurrency is constantly increasing and the technology is improving. More real estate amateurs and professionals are sure to take notice of this tremendous opportunity.