Bringing real estate transaction under the Blockchain technology will help to boost business. Across the globe in this industry builders don’t have much control over the building information being shared across the platform by third-party companies to market and bring investors. Blockchain can increase transparency in purchase and sale process along with benefits of increased security. Commercial real estate has recently adopted Blockchain into their industry and CRE executives are finding smart contacts of much importance for purchase, lease, finance, and management transactions.
Blockchain is basically distributed ledger technology (DLT) which increases the transparency of dealing for business without having to worry about safeguarding the information as it is duplicated across various nodes. Blockchain will bring speed, transparency and optimal efficiency to real estate. The main link in the real estate industry is the middle man and many transactions cannot be realized due to issue of transparency and complexity.
But there are also many artificially created fractures that make it unnecessarily complex and complicated to implement real estate projects efficiently. For example, this may be real estate data, which each contractor researches for itself before a transaction, because one simply does not trust the information of the other party.
In this scenario, Blockchain can be considered to share details without making the transaction complex and in the process also keep it secure from other builders in the industry. When a company shares data with others which keeping transparency and also not losing rights will help them to gain more footprint with trust among other builders and clients.
Many real estate companies don’t have control over their operations and it will be very difficult for them to implement Blockchain technology which is based on applications. What Blockchain offers is streamlining the running processes which will shift the workload of many tasks from humans to algorithms. Challenge in real estate companies will be too, first of all, create more control over the existing processes.
Blockchain as a technology has still not been implemented as a concrete product but the number of startups using Blockchain has increased rapidly. From this, it is clear that Blockchain in the future will bring more significant shift in the real estate industry with potential for change in almost all areas and their value-added processes.
The fact that the Blockchain is actually updated and the information stored in it is validated in this way is due to the so-called miners, who can also be understood as accountants of the Blockchain. The miners compete against each other worldwide to check the new information and validate it by solving a complex math problem. Once this so-called “proof of work” has been done, the miner who first provided the proof of work receives a reward, eg a payment. The miners thus ensure that the Blockchain is updated at short notice like a digital heartbeat.
Like any new technology, the Blockchain brings with it challenges and opportunities. The real estate industry can benefit in particular from the achievements in the area of transactions. In particular, real estate management will be cheaper and less risky. The milestones still to be overcome are, above all, the legal standards and the changes to digital contracts, ie from text to code. Coping with open legal issues could turn out to be the biggest challenge here. Data protection will also increasingly come into focus.