February 15, 2021
Cryptocurrencies have been making strong impacts on the financial industries in recent years. Bitcoin has hit a high-peaked mark lately which has gained the interest of several investors about this biggest and most popular cryptocurrency. Bitcoin has gained popularity due to its volatility. Its value can take a shift anytime due to its irregularity.
Overview on Bitcoin
Created in the year 2009, Bitcoin is a digital currency, called cryptocurrency. Unlike traditional online payment services, bitcoin promises a lower transaction charge. It is managed by a decentralized authority unlike other currencies authorized by the government. Bitcoin is created, dispersed, traded, and stored with the help of a decentralized ledger system called a blockchain. Blockchain can be defined as a set of blocks and each block contains a collection of transactions. Bitcoin is a collection of computers or nodes, which run bitcoin’s codes and its blockchain is stored in them. As all the computers running the blockchain contains the same lists of blocks and transactions, and new blocks with a new set of transactions can be seen transparently, one can’t cheat the system. Bitcoin is the world’s largest and earliest cryptocurrency to reach widespread popularity and success.
The Blockchain technology, on which the structure of bitcoin and all other cryptocurrencies depends upon, can promise a secure online ledger for all real estate-related transactions. Blockchain-based real estate is achieving popularity as a means of interaction between buyers, sellers, and investors. Due to surges in the daily rate of real estate transactions, a common database for purchases and leases is highly needed, which blockchain can provide. Also, by upgrading the traditional Multiple Listing Services (MLS) database into a blockchain-based database, transparency on the entire transaction history of all the listed properties is ensured. Besides real estate industries, blockchain technology is also adopted by property-sharing sectors.
Here are some of the companies that utilize this technology to power-up their business:
PropertyClub – This New York-based real estate platform uses blockchain to make buying, selling and investing in properties easier. The company manages digital real estate transactions with bitcoin or its own PropertyClub Coin (PCC), by using smart contracts.
RealBlocks – RealBlock uses Blockchain technology with a new approach for real estate investing. Customers can buy a fraction of the portfolio instead of the whole asset. RealBlocks helps to reduce fees, accelerate processes, and delivers liquidity options, through tokenization applied through blockchain technology.
SMARTRealty – Just as the name suggests, SMARTRealty uses smart real estate contracts to present and sustain property purchases and lease agreements. Located in Seattle, this company makes use of smart contracts that helps to follow protocols, which if not met, the contract gets instantly dissolved. Protocols regarding paying rents, establishing mortgages, or buying a property.
Propy – Situated in Palo Alto, California, this company also utilizes smart contracts to perform international real estate transactions. Propy is a real estate marketplace where buyers and sellers sign up for smart contracts to speed up processes that are often interrupted and delayed due to international legalities.
ManageGo – ManageGo is a New York-based company that leverages blockchain for rental property owners. From thorough credit background checks to managing ticketing, the ledger-backed software helps managers and property owners to process transactions efficiently. They utilize the distributed ledger technology (DLT) to get a more transparent overview of the payment history and renter background.
Reasi – Located in Santa Monica, California, Reasi is the first end-to-end real estate transaction company. Rather than depending upon third-parties, agents can use their own blockchain-based escrow to facilitate the real estate buying and selling processes.
Meridio – Meridio is also a New York-based platform that allows commercial property owners to sell digital shares of their property. The platform links independent or corporate investors with property owners who want to liquidate parts of their ownership.
Slice – Slice provides small scale investors the chance to invest in commercial real estate properties. Like Meridio, Slice also provides the real estate owners with access to a large database of international investors through the company’s ledger technology.
Future of Cryptocurrencies in Real Estate
Blockchain introduces new real estate trading strategies. It can establish trading platforms and online marketplaces to hold up real estate transactions more extensively. According to a report by Deloitte, blockchain may soon lead to a shift in its role and contribution to real estate transactions. New platforms will come into play such as listings, payments, and legal documentation. Blockchain could be used to cut off intermediaries such as lawyers and brokers, out of the real estate transaction process, thereby reducing costs. With the concept of partial ownership, blockchain lowers the barrier to investing in real estate. So investors without significant money upfront can acquire bigger ticket properties. Through blockchain technology, more people may be able to access the market where transactions can be built more translucent, secure, and unbiased. Real estate transactions may in due course become truly peer-to-peer with blockchain-powered platforms doing most of the work.
Conclusion
Blockchain’s intrinsic system of trust makes it the ideal technology for real estate. Real Estate companies around the globe are significantly using blockchain’s smart contracts and DLT to transparently and effectively manage buying, selling, renting, and even lending processes.