Blockchain and Real Estate industry
It seems like the world has forgotten a bit about Blockchain and its numerous utilities. Today we are going to remind you about this technological titan in the contemporary IT-industry, and introduce some of the most convincing Use Cases that demonstrate how many advantages can be extracted out of Blockchain if implemented wisely in the Real Estate Industry.
Real Estate industry attracts billions of dollars annually and has a significant impact on national and international economies. Strange, but such a giant worldwide industry still remains one of the most paper-heavy, bureaucratic and corruptive.
Here are the reasons why the majority thinks Real Estate is a Legacy industry in need of a technological boost:
High Entry Barriers
An average citizen of any country would say that investments in Real Estate are available for the rich only. And there are more entry barriers: Credit Score, citizenship, sponsorship, and others. Investments in this industry abroad imply even more difficulties. And in general it just takes too much time, money and effort – in a nutshell, a true mess.
Decades and centuries have gone by, technologies have evolved in a fantastic way. And still there hundreds of evidence of money laundering, corruption, bribery, etc. (just remember the Panama Papers and Paradise Papers cases in 2016 and 2017 accordingly).
Lack of transparency in Real Estate makes this industry one of the most dishonest and fraudulent ones.
Intermediaries and paper-heavy processes
At least once in their lives, every person has faced time-consuming and red-tape processes that are somehow connected to Real Estate (i.e. land purchase, buying or selling a house, finding apartments near Cincinnati, inheritance of Real Estate etc.). Any Real Estate-related process is always accompanied by a long list of transactions, millions of agreements, papers of all kinds, payments, additional fees due to a number of intermediaries between the points A and B. Disturbing, isn’t it? No wonder that in these piles of various non-digitized documents important papers get lost.
How can Blockchain help?
Shall we remind ourselves one more time what is this Blockchain? Simply saying, it is a chain of time-stamped tamper-proof records (blocks), interconnected and stored safely according to cryptographic methodologies. Blockchain provides immutability, transparency, speed, security and, more importantly, reliance!
For the last couple of years Blockchain has proved its worth in a number of significant industries. The technology has shown itself especially great in the global financial sector. In fact, nowadays it’s really hard to find a market sector that hasn’t been at least slightly influenced by this disruptive technology. However, it seems that adoption of Blockchain in Real Estate is still trailing somewhere behind. Let’s find out what beneficial use cases are there for this huge global industry!
Tokenization means replacing some real-world data with digital – tokens. In other words – tokens can represent rights, assets, shares and various functions. Via tokenization mechanisms dealing with property can become a thousand times quicker and easier, excluding the dozens of greedy third-party members of the process. Instead of buying a property on investing in it, spending months and years on paperwork and fee regulations, you can just buy tokens on specialized licensed exchanges.
There is already a live representation of this use case – a progressive platform called BitRent, made possible by a custom blockchain software development company Smartym Pro. This platform’s mission is to change the way people invest in Real Estate worldwide, and make it boundless. Here people invest in tokens rather than in square meters.
All the three disadvantages that we have mentioned above in the Intro are eliminated in the BitRent platform: first of all, the “entry threshold” is accessible for citizens of all countries and income levels – just 500$ to get started; transparency is guaranteed by the Blockchain technology itself.
Moreover, the Smartym Pro’s team integrated BIM technology, that enables investors to monitor the construction processes in real time; And most importantly, no more bureaucracy and intermediaries – people can invest remotely online without any time or place restrictions.
I guess, Smart Contracts don’t need any detailed explanations – these are automated contracts, where all the rules and conditions, as well as the signatures of the participants and other significant deal-related data are being stored in Blockchain.
Let’s look at a simple example of how the buying property process works now and compare it with the similar one that is executed via Smart Contracts:
As you see, the Buyer, as a result of using a Smart Contract can save time, money, patience and peace of mind, since there will be middlemen between a Buyer and a Seller. Besides, since all the contract conditions are written and stored in Blockchain without an opportunity to alter or fake anything – our Buyer Grace can sleep well, assured that no one will ever try to defraud her.
Smart Contracts, for example, are already successfully adopted by an American company called PropertyClub, the main authority of which is to help people search for, sell and buy properties. They use Smart Contracts and allow to conduct transactions in Bitcoin and their own custom cryptocurrency PropertyClub Coin.
What other perks Blockchain is able to give to the Real Estate industry?
To answer this question, we’ve prepared an image with the most important things, that the Real Estate can acquire if the Blockchain technology is integrated on a global level.
To cut the long story short, if the Real Estate industry participants decide to make friends with Blockchain and all its pleasant benefits – more people will become happy for a plenty of reasons: quicker and easier search, less risks, zero opportunities for fraudsters for money-laundering and tax evasion spivvery. And, as a result, Real Estate will no longer be considered a luxury for the richest ones, and it will become a liquid asset.
And if you feel like you are ready to help the world become a more joyful and reliable place already now, Smartym Pro will be glad to stand by and offer its professional blockchain development services. We have already succeeded in creating some unique and pioneer software projects for Blockchain enthusiasts all over the world, both on local and governmental level! Since 2019 Smartym Pro is a recognised FinTech industry contributor in Belarus and a top Blockchain Software development company.