Houses have come a long way since the early days of mankind – from the Stone Age caves and prehistoric tents made from mammoth skins, to the technological wonders we are living in today. Technology has allowed homes to go from merely a shelter to a funhouse of comfort, with aluminium windows and security systems. There are also self-heating rooms, houses fitted with smart technology and it will only continue to become more ostentatious, more than a house was set out to be. Today, even blockchain has joined in the ballgame and changing the landscape of the housing industry.
Let’s first take a look at how the introduction of blockchain has already changed society (for better or worse, it is still too early to tell) by merely existing. It is said to be the most disruptive technology of the new millenia, as it continues to force evolution over various landscapes. Financial institutions and banks have taken it upon themselves to implement the security that blockchain offers, even the government is dissembling the technology to fit their needs and to better protect sensitive information. The health and medicine industry has also benefited from the technology, through information sharing, tracking and identification purposes. Even the automotive and logistics industry has incorporated the technology to be more efficient.
Blockchain has trickled down to every industry, and real estate is no different. However, the bigger picture is that ownership becomes a blurred line. Laws governing the purchase of real estate is also murky as it is unprecedented. Someone rich enough is virtually able to purchase a plot of land or house anonymously, becoming a ghost. Without taking a look at the backend of things, the less scrupulous might try to benefit from the privacy that blockchain promises.
However, many laws and legislations have been drawn up in the face of that idea. And to combat people making use or taking advantage of that fact, generated what is known as “smart contracts” instead. A binding contract that utilizes information from the two parties involved which is tamper-proof, which also bypasses all middlemen including real estate brokers, lawyers, insurance, and connecting both buyer and seller directly. This produces a contract which is secure, which cannot be duplicated, binned or corrupted. Essentially eliminating the following:
– Fraud: As there is a semblance of transparency in smart contracts such as verifiable information, it builds a higher level of trust.
– Confusion: The purchase process will become straightforward as well as secure and tamper-proof. All necessary data will be in one place, with no room for human error.
– Middlemen: By taking away brokers and agencies, it will help buyers save on fees and no time is wasted on drawing up contracts, waiting for approval, etc.
– Inconvenience: Blockchain payment is secure, with no governing country, there are no conversion rates to contend with or costly wire transfers. Being a secure platform, there is also no need for lengthy verification processes.
– Dishonorable tenants: Property management can be handled by blockchain technology in which a landlord and a tenant would sign a smart contract and based on the information given in the contract, the smart contract will automatically set up monthly payments to the necessary parties. Therefore, eliminating the fear or hassle of unfortunately finding an unreliable tenant.
Investing in real estate has long been a game for the rich and financial-savvy, but today, you will also need to be tech-savvy and you might not need to be well off. There are platforms based off blockchain that allows those with a minimal salary to invest in a “token” of real estate, much like owning a “bit” of bitcoin. Holding a part of an asset, no matter how small, is an investment. And with enough returns, it will begin to add up. This will give everyone from all walks of life, the ability to have a piece of the real estate pie. How does it work? Basically, your investment is pooled with the investment from other investors and used to purchase a building which is then either rented out or sold for a higher price and the investors all profit.
The growth and impact of blockchain is exponential and will eventually take over the very fabric of human habit. Take for instance, the mobile phone. From an invention that allows you to talk to someone wherever you can find reception, to being a smartphone device, allowing you to do virtually anything you can on a laptop or computer. Searching up information on Google, and even accessing your blockchain application and making a purchase anonymously, securely, at the touch of a button.