Blockchains and cryptocurrencies are not the same things. Cryptocurrencies assign value to blockchain operations. Also, consider that dollar prices of cryptocurrencies are usually determined by the markets. Knowing these fundamental aspects helps in understanding why homes sold using bitcoins are generally classified as traditional cash sales.
The technology that makes up a blockchain can do so much more than supporting the financial system of a cryptocurrency. It has the potential to change the way the world does business. In the real estate market, blockchain can directly benefit contracts, property records, escrows, insurance, and other functions.
Transitioning real estate to blockchain can resemble the vending machine dynamic. A home buyer would be capable of visiting a website and clicking a shopping cart to take possession of a new property with the deed, escrow, insurance, filed public records, and all. Real estate professionals remain important in areas of advice, though financial and tedious transactions occur over smart contracts running on a blockchain.
Traits of a Real Estate Blockchain
Blockchain technology will transform the whole real estate industry, but applications for commercial real estate (CRE) are really exciting. It offers new approaches to leasing, as well as, streamlining traditional purchase and sale transactions. There are cost, time, security, and transparency benefits that only blockchain technology can offer in the way the industry needs. Below is a list of the characteristics of who can benefit from employing blockchains, as well as, the most beneficial functions.
Characteristics of organizations that can benefit from blockchain-based sales, purchases, and leasing:
- common database
- modifiable by multiple parties
- medium of trust
- conditional transactions
Functions that are improved by real estate transactions on a blockchain:
- efficient payment processing
- decision making
- cash flow
- property search
- title management
Blockchain-based smart contracts are poised to revolutionize how the world fulfills real estate transactions. There are special implications for the use of CRE smart contracts. Transactions will incur less risk and increased transparency in future real estate markets. Tech-savvy investors will see the benefits at first, but the benefits are too great to stop widespread adoption.