How Blockchain Solutions are Transforming Real Estate – Trotons Tech Magazine
How Blockchain Solutions are Transforming Real Estate – Trotons Tech Magazine

How Blockchain Solutions are Transforming Real Estate – Trotons Tech Magazine

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Bitcoin, the online cryptocurrency and basis for blockchain technology, seems to be everywhere these past few months — but it is equally as fascinating that the Blockchain itself has managed to transform the way certain industries operate. Property management is one of the most popular emerging industries in which blockchain solutions transform real estate.

In the past, the traditional property management industry was very centralized. A property manager may have had access to a physical office and credit card machines to process payments, but they still had to deal with clients while booking appointments. The process was manual and required some office staff with good computer skills — often requiring a business degree — who would handle management duties remotely from home for much of their career.

The big difference now is that the business is completely digital. This is possible with computers that have become less expensive and more powerful by the year and software programs like Google Docs that allow people without specialised training to use something as simple as a spreadsheet application.

How Blockchain has affected the real estate business

Increased Safety

A blockchain consists of extremely large data files that are organized in a series of blocks. The records themselves are encrypted, and once enough computers have verified them, they’re made public so that anyone can see them. Property deeds that are transferred to other parties through a system with a blockchain would reduce fraud by being more efficient and less open to manipulation from outside sources. No one wants their data or personal information leaked, so buyers and sellers want an encrypted system that keeps all this information safe. Because there’s so much information in the real estate market, it would take years to collect all of this data manually. By using Blockchain, that process happens in hours or days rather than weeks or months.

Better Processing Speed

With Bitcoin, blocks are created every 10 minutes to process transactions quickly. Still, real estate management software and other programs could create each block every ten seconds or even faster, depending on what someone wants to accomplish. This keeps things moving at an incredible pace while maintaining the integrity of the data. The ability to transact quickly and securely also has an impact on land purchases as well as corporate purchases.

Collecting more data

You might think of real estate as an old, traditional industry, but it’s already different. So much data and information are being collected on every aspect of the industry, and the Blockchain can now access those data sets.

More Transparency

Blockchain technology brings a lot of transparency to the real estate market. As previously mentioned, it can now be accessed by just about anyone. Because so many different people and companies have access to this data, there’s a high level of trust in the system.

Efficient Tracking

The tracking of property ownership would be more transparent if implemented as well. Blockchain technology is used to create smart contracts that record property transfers and payments. The basic idea behind this is that anyone who purchases land must set up a smart contract using the seller’s payment address. This contract is then made visible to anyone who chooses to use it. When the seller receives payment, they complete the transaction by transferring their deeds via the blockchain peer-to-peer network.

Advantages of using Blockchain in real estate

By gaining access to these new databases, investors can decide which properties to buy or sell. Smart contracts are also greatly increasing the efficiency of real estate transactions by making significant processes more efficient.

Automated Operations

Not only are real estate transactions becoming more efficient, but they’re also being automated thanks to blockchain technology and smart contracts. Because so many contracts are now written on Blockchain, the need for lawyers is almost non-existent. Real estate investors and sellers can rely on blockchain technology to secure their contracts, and they don’t need lawyers to negotiate the terms of those contracts.

Trustworthy

Since so many different people have access to this data, it can become very trustworthy over time because everyone will have a copy of the same information. This is a big reason why smart contracts are so important for real estate transactions: because smart contracts are saved on the Blockchain, they’ll be impossible to change after they’ve been created (no one wants their property changing hands).

Accurate and Easy to Understand

Currently, price information is collected from various sources and assembled into a single report. The problem with this method is that there are often conflicting reports on the market value of a particular property, and these reports can be outdated as soon as they’re released. A system based on blockchain technology would allow for real-time, transparent tracking of the price movement of any given property, and this could be done without relying on a centralized party to report accurate information. With such a system, the current market prices for properties could be reported automatically using smart contracts – software programs that execute themselves once an event has triggered them.

Challenges of implementing Blockchain in real estate

However, some challenges in the industry may come with blockchain implementation, which has been discussed below.

Lack of Regulations

The lack of regulation for cryptocurrencies can cause a major issue in the industry. Higher-end companies may be more reluctant to use new technology when it is not very well regulated. Additionally, any claims with Blockchain would have to be settled by an outside party as well as a higher degree of security for new users.

Similar Alternatives

Some real estate platforms already have systems that work similar to Blockchain and work seamlessly with them. This shows that the adoption wouldn’t be too much of an issue before implementation.

Conclusion

the current system has problems with security and ease of use, but if Blockchain were introduced today, it would solve these issues. Blockchain implementation is unlikely to become widespread this year, but future use is more than likely.





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