Blockchain technology is changing the processes and transactions in the world of finance and technology. Cryptocurrency and blockchain technology is increasingly becoming popular these days and investors are rapidly investing in these technologies. The world is moving rapidly towards the integration of digitized processes within typical financial transactions.
Initially, the concept of blockchain seems to be very difficult, but it’s simply a database where data is stored in digital blocks, linked together. Whenever the new data comes in, it will automatically create a new block. Later on, these blocks will be linked with previous blocks. All the data will be arranged in chronological order, with every block being timestamped upon adding to the chain.
Blockchain technology is being implemented in various industries. Similarly, it’s expected to have several implications in the real estate-backed cryptocurrency. Blockchain is enriching the real estate industry by fostering additional trust during transactions. Blockchain technology helps in the verification, automation, and security of real estate transactions.
Future prospects of Blockchain:
You might have heard about the new trend of non-fungible token (NFT) at the start of 2021. Basically, NFT is the type of digital currency that’s exclusive and not replicable. NFTs are expected to enter the mainstream lexicon, according to a recent prediction of 2022. Another wonderful thing that’s getting popular recently is fungible token (FT). Cryptocurrency, like Bitcoin, is considered to be the best example of fungible tokens, which means all tokens are identical.
Both fungible and non-fungible tokens are based on blockchain, used to store data and record information in a way that can’t be changed or hacked. Blockchain is a digital record of data and transactions, dispersed across a computer network on a specific set of blockchain.
How blockchain is enhancing real estate industry:
The Blockchain technology is being implemented in real estate industry and it’s so exciting and full of possibilities. Presently, big companies are transforming real estate dealing by implementing blockchain to get secured digital transactions. These tech enabled brokerages help in reducing the cost of intermediaries, realtors and bankers. Crypto real estate dealings helps in reducing the need of audits, paperwork and insurance. Here are ways in which blockchain technology is actually enhancing the real estate dealings;
- Blockchain-based smart contracts
- Transparent and secured property listing services
- Making property investing accessible
1. Blockchain-based smart contracts
Smart contracts are self-executing, explaining terms of the agreement between both parties in real estate backed cryptocurrency. All the terms of agreement are written into codes that are fully secured and stored across a dispersed and decentralized blockchain network. The execution of the contract is monitored with blockchain codes meant to create secured transactions that are irreversible. Some examples of smart contracts include offer sheets, listing agreements, closing documents, metaverse fandom and letters of intents which are becoming digitalized by using blockchain technology.
Furthermore, signing smart contracts are easier than paper contracts can increase the overall speed of transaction process. It abolishes the need to meet and negotiate the price with lawyers, brokers and bankers while ensuring safe and legitimate transactions.
2. Making property investment accessible:
From the very beginning, Real estate investing has been very difficult and time-consuming. Irrespective of the fact that you are investing in a small family home or a big property, this type of property dealing requires you to involve numerous parties in the due diligence process. Plus, you must have good financial background before deciding about property investments.
Whereas, Blockchain technology is assisting people to buy tokens of properties and buildings. That’s known as digitalization of properties, allowing fractional or partial property ownership. Real estate digitalization is more liquid, making it easy for owners to buy and sell property shares cheaper and faster. Therefore, it results in attracting potential buyers and investors in the real estate market by decentralizing it.
3. Transparent and secured property listing services:
Most of the property listing services are privately owned without having any type of centralized database and based on metaverse technology. Historically, real estate business is relying on old and unproductive methods used for tracking the transactions and records. Moreover, it also requires users to pay immense subscription fees.
However, property listing services are moved to a single blockchain based decentralized server to generate a constant and secured database that’s handy to everyone. For example, decentralized finance (DeFi) services can be used for making unbiased real estate property investments. Blockchain technology will help to securely store data without the interruption of third party, so it will be hard to inflate the prices or list any type of fraudulent information.
How to gain benefits from blockchain technology:
Here we are discussing the potential benefits of blockchain technology, especially in the real estate sector also explained by Metaverse Zuckerberg. Let’s discuss how to gain benefit with this technology as an Investor, property owner, developer, resident, or manager.
Implications of Blockchain technology:
- Property developers
- Property owners and investors
- Residents and tenants
- Property managers
When multiple parties will be allowed to invest in the development project, it allows developers to raise funds required to start the project. Infect real estate fractionalization is not a new thing, but blockchain technology help the investors to streamline the process and casts a broader potential for investors. Project Sponsors can ask capital investors to invest without worrying about their inspections, background check or doing paperwork. Blockchain technology ensures easy data recording, expedites the smart contract signing, updates and issues briefings to all the parties.
Blockchain technology helps the property developers to maintain the security of their appliance manuals, architectural documents, maps, engineering plans and other information. It means investors and owners will require permission to access these materials from the property developers, as all the data is completely secured on the Blockchain system. It helps in the reduction of transaction time, by enabling developers to focus on the project development.
Property owners and investors
Blockchain technology helps investors and property owners to achieve peace of mind in their dealings without worrying about the data security or any type of fraudulent dealings. In short, dealers can rest assured while dealing in real estate properties about the price and legitimacy because the process is transparent and accurate.
Furthermore, crypto real estate is helping people to convert its value in real estate, meant to liquidate the industry. This Liquidation of real estate properties will make the dealing easy and accessible for potential buyers and investors. It indicates that the seller doesn’t need to wait for a specific buyer with enough affordability to get returns on their investment.
Residents and tenants
Blockchain technology makes the real estate property dealing easy with smart procedures like virtual tours, smart contracts to sign lease agreements, submitting rent payments or submitting maintenance requests. This technology is enabling the renters to enjoy numerous benefits in a secured and fastest way. Blockchain technology is helping people to verify the legitimate listing of properties without spreading their personal information because this type of user data is encrypted.
Blockchain has made it easier to deal across the country or even across the world. With digitalization, you can lease the property anywhere and negotiate deals from anywhere in the world without stepping out. It’s actually eliminating the geographical barriers and making real estate property dealing more liquid without any risk of privacy or data breach.
Presently, property management have become far more difficult than just freshen up the paint, wiring or upgrading the appliances. Infect it also includes processing of paperwork, whether it’s a lease agreement or house maintenance requests. If you use a blockchain-based property management system, it includes smart contracts that will eliminate the paperwork and makes the process error-proof. This technology provides fully transparent information based on rental value, frequent payments, history of tenants or property, payment frequency and contractor agreements.
By considering all these facts, we can say that Blockchain Technology has a great potential of revolutionizing the real estate-backed cryptocurrency in the year 2022. Basically, it’s a disruptive innovation, changing the roles of property dealers, investors or property managers in the real estate sector.
However, all the technological advancement seemed to be impossible in the beginning, but later on, people get used to it. Blockchain Technology is enriching the real estate industry by fostering additional trust during transactions. It helps in the verification, automation, and security of real estate transactions. Yes, we can clearly say that the digitalization of the real estate industry has a bright and exciting future ahead, all because of Blockchain.