Blockchain is a digital technology that is transforming the fabric of modern life. Blockchain is the technology behind cryptocurrency and has many benefits. Blockchain is affecting all industries and is becoming a crucial tool for education, business, and data security.
Real estate has traditionally been a brick-and-mortar business for people who prefer tangible assets. However, blockchain technology's reach is so strong that it is slowly affecting real estate. There are many processes involved in real estate other than buying and selling property.
The following are ways blockchain is impacting real estate:
When you purchase a piece of property, you get a piece of paper that proves you are the property's owner. The paper is precious, but it is still subject to vulnerabilities of paper, for example, getting burned, being wet, or the print fading. Even though you might have a safe, paper titles and deeds are highly prone to damage.
Government offices are quickly digitizing land titles and deeds with blockchain technology being used to make them more secure. By using blockchain technology, titles and deeds can be stored while eradicating the paper trail. The documents are stored on a secure platform and are easily accessible, which is a significant development in real estate.
Real estate transactions are often long and tiresome, but they do not have to be. Blockchain technology is transforming real estate transactions through automation and smart contracts. A smart contract is an automated transaction protocol initiated when various predetermined conditions are met.
Blockchain technology ensures that a real estate transaction is secure, final, and unchangeable. The main benefit of a smart contract in the blockchain and real estate connection is increased transparency and decentralization, reducing the need for the contract's possession or ownership. Due to the benefits of blockchain technology, real estate transactions are becoming more digital and secure.
Intermediaries like real estate brokers, agents, lawyers, and financial institutions have been a substantial part of the real estate industry for centuries. However, blockchain technology quickly reduces the need for intermediaries in real estate transactions.
Third parties often slow transactions down and make them more expensive. By reducing the need for intermediaries in real estate transactions, buyers and sellers will get more out of their money as there are no commissions and fees to pay. Fewer intermediaries also mean quicker transactions which most property sellers and buyers appreciate.
With the prevalence of blockchain technology, tokenization has become very popular. Tokenization refers to using a recognizable symbol (token) to hide sensitive information while ensuring it is still available. Simply put, it is an excellent way to hide transaction details.
Concerning real estate, tokenization can ensure funds transfers are handled under specific rules so people can control where the money goes and how it is transferred. Tokenization will also make the exchange of assets in real estate faster and cheaper. Eventually, it will ensure that real estate investors and property owners have more options for completing transactions.
The primary purpose of blockchain technology is decentralization and security. Blockchain technology is the epitome of security in the digital world though nothing is impenetrable. Blockchain technology is improving transparency and eradicating fraud in real estate transactions, an issue that has plagued the industry for a long time.
Fraud is often prevalent because stakeholders have few resources to prove authenticity. Moreover, human error can also lead to mistakes that enhance fraud. However, blockchain technology includes infallible security protocols as all information on the blockchain is verifiable and traceable, helping to mitigate fraud.
Blockchain technology will soon permeate all areas of society. Its benefits are making blockchain quickly sweep through industries like real estate. It is impacting real estate in areas like fraud mitigation, digitization of transactions and titles & deeds, tokenization, and reducing intermediaries. You should expect blockchain to have more influence over real estate processes long into the future.