Five Reasons Why Using Blockchain Technology Can Help Overthrow the Traditional Real Estate Limitations
Industries are just now getting a thorough idea of the transformative strengths that blockchain brings to the table. The tech is said to be durable, robust, transparent, incorruptible, decentralised, easy to use, and more secure than anything approachable at present
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How much do you understand blockchain?
Bitcoin started from a concept on paper in 2008 to a virtual currency worth more than $15,000 per unit by the end of 2017. And yet, it’s the least impressive implementation of technology as powerful as blockchain.
Just imagine the possibilities!
Ian Khan, an author & TEDx speaker, believes blockchain to be revolutionary. William Mougayar, entrepreneur & blockchain specialist, calls it a groundbreaking method to ensure the validity and accountability related to legal documents of all kind.
Industries are just now getting a thorough idea of the transformative strengths that blockchain brings to the table. The tech is said to be durable, robust, transparent, incorruptible, decentralised, easy to use, and more secure than anything approachable at present.
It’s these factors that make blockchain such a perfect fit for the real estate industry. We’ll look at five reasons why.
• Fraud Protection
• Improved Transparency
• Secure Transactions & Data
• Smart Contracts
But First, Understand How Blockchain Works
While the Internet has many explanations, we’ll go with William Mougayar’s analogy of blockchain with Google Docs. Traditionally, editing a document was a one-person-at-a-time thing. Even with MS Word, you’d share a file with someone; they’d revise, and send it back to you. But, there was no way for two or more people to make changes in one document at once with everyone viewing the updated version every moment. Until Google Docs, that is!
Now, apply that principle to records, or money. Any asset!
Blockchain stores them as a shared database, one that’s continually refreshed and identical across the network. The asset holders are called transaction validators. Every transaction is a block. Whenever a validator adds or removes a block, the entire system is alerted. Everyone knows.
In light of this information, here’s how blockchain can help deal with five traditional issues in real estate.
1. Fraud Protection
Blockchain offers a 100% incorruptible resource. Its ‘digital ownership certificate’ will be property-specific and close to impossible to duplicate. Every owner the real estate ever had, with duration of ownership, selling, and advertising details will be well-logged.
There’ll be no scope for forged notary stamps & documents, fake property advertisements, duplicated grant deeds, phoney processing fee, etc.
With blockchain, every property will have a digital identity. It’ll include the occupancy, legal & financial stamps, physical aspect, historical transactions, etc. Ownership will be transferred immediately using this digi-ID.
Peer-to-peer transactions will remove any need for third-party verification, and hence intermediaries.
3. Improved Transparency
The blockchain is continuously supposed to self-audit every few minutes. And, it’ll be a repository of every kind of information. Since it’s decentralised, everything, right or fishy, will be visible to every transaction validator.
With evidence distributed over the network, manipulating data without being noticed would be very unlikely.
4. Secure Transactions & Data
Any mismatching version will be caught instantly in a distributed database. That ensures data integrity. Decentralisation means that hackers will need to breach each node at once and compromise a significant part of the network to falsify even a single record.
5. Smart Contracts
Smart contracts, in theory, are built upon a set of constraints which, when fulfilled, will automatically release an action.
With smart contracts, seller 'S' can submit the property’s digital ownership certificate to the blockchain. As soon as buyer 'B' pays for the asset, the system will trigger the digi-ID which will transfer the asset records to B's name and the money to S. No further human involvement will be needed.
The blockchain is an infant right now. There are many possible ways it can be developed, evolved, and implemented. While it’s meant to simplify transactions in real estate and other industries, it’s actual performance, and consequences are yet to unfold completely.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.