The explosion of blockchain in real estate has fired up the new-coming investment trend? How does this industry benefit from blockchain technology?
Recently, commercial real estate has accounted for a large percentage of global economic asset and transaction activity. The size of the professionally managed global real estate investment market climbed from $7.4 trillion in 2016 to $8.5 trillion in 2017, according to an MSCI research. On the other hand, the real estate market has been operated by siloed and autonomous networks with transactional friction and opacity.
The Ethereum blockchain in real estate offers a practical way to achieve a variety of industry benefits. This year, the mayor of Miami proposed that residents may pay property taxes and local fees with bitcoin. A Miami penthouse sold at $28 million through an unidentified bidder and became the most expensive residential crypto real estate transaction in the United States to yet."
Here we discuss the main benefits of blockchain in real estate transactions.
The real estate sector's blockchain systems offer a solution in terms of speed and security that can significantly lower the danger of fraud. This revolutionary technology simplifies data transfer and shortens the time between the signing of the preliminary sales agreement and the deed of sale before the notary impact all phases of the real estate transaction.
Although this new digital architecture enables the automation of real estate transactions, it is crucial to note that its use has already progressed beyond the project stage. This system is particularly intriguing in countries where corruption or a lack of openness makes determining who owns a piece of property difficult. We might think of blockchain as a tool for visualizing the state of properties and titles, allowing complete access to the land's history.
The blockchain provides unrivaled speed by allowing smart contracts to be created without the need for third-party interference. These digitalized contracts are similar to paper contracts in certain aspects, but they enable parties to safeguard all of the information included and prevent it from being modified. Security is the most notable feature of smart contracts in the real estate
In reality, smart contracts are mostly used to automate transferring value by virtual currencies, also known as crypto-assets. The blockchain automatically records all accounting entries matching these digital currency swaps, making the transfers public and immutable. The terms of these smart contracts eliminate any possibility of ambiguity or interpretation, which is common in our daily transactions.
Smart contracts are used to make real estate transactions that enable us to plausibly foresee the data programmed according to the assets and the many parties. As a result, transfers might be carried out automatically by the contract's pre-defined terms. When a property is sold, all the related parties like attorneys, appraisers, brokers and other parties are involved automatically.
The real estate market's standard processes are greatly accelerated by blockchain. Users save time obtaining data relating to a property or a piece of land because they may access all the information stored in the blockchain. These kinds of information are land registries, title deeds, technical information, co-ownership information, and surveys, all of which become available 24/7, with real-time data and instant validation.
If the internet has transformed the business sector in recent years with the emergence of marketplaces, the blockchain disrupts the real estate sector thanks to information and transaction fluidity and dissemination. All real estate professionals are now concerned with the blockchain, from recording and funding to transactions, from real estate investing to assessments to asset management.
Every transaction is built on the foundation of transparency. While we aim to apply technology in all we do, the existing, hidden method of purchasing and selling properties will soon become obsolete. Of course, blockchain isn't the panacea for all problems in the real estate industry. However, the blockchain system improves confidence and decreases reliance on real estate brokers.
Furthermore, the blockchain system lowers costs, speeds up house transfers, and, most crucially, opens up possibilities for networking by providing a digital platform that enables other businesses to connect. Even though it appears to be a long way off, there is reason to assume it will become the standard for the real estate market much sooner than one may expect.
akaChain is backed by FPT Software, a globally leading technology, and IT services provider. It is an end-to-end, permissioned, multi-chain network based on the Hyperledger Fabric. Since its establishment in September 2018, akaChain’s product has assisted many enterprises, from SMEs to Fortune 500 firms, to transform with distributed ledger technology. The company provides a broad range of permissioned blockchain-based products and services in multiple sectors, including retail, supply chain, banking and finance, insurance, shopping mall management, etc. to transform with its distributed ledger technology. For more information, please visit https://blog.akachain.io/