Blockchain technology, which has become a tool for information storage and security, is not only known in the field of virtual currency but also in other business fields.
With its characteristics, blockchain is used in important activities such as trademark registration, copyright protection and anti-counterfeiting, as well as in real estate business as it can open up new ways of trading. It can also make online trading platforms more responsive and more secure.
Real estate coding
Blockchain is a form of database storage that acts as a secure record of data. It consists of blocks of information linked together by encryption and expanded over time. Each information block contains information about the setup time and is associated with the previously created information block.
Blockchain technology has the effect of resisting data interference from outside. The input information blocks are approved by the network, and the data in that block will be protected by the security system of the blockchain.
In the field of real estate, blockchain is seen as a cryptographic ledger that brings democracy in access. At the same time, it increases absolute trust by being a single, untamperable data source. This is especially meaningful for real estate investors.
Blockchain allows users to track transactions and records across a distributed network of computers. The information is all saved on a ledger and distributed across a series of computers that are unaltered by all.
The application of algorithms and technology will help reduce unnecessary problems between stakeholders and speed up the process of buying, selling, leasing and financing this type of property.
If tokens are considered a store of value, in a chain of residential or commercial real estate, tokens represent ownership shares in different categories such as equity, debt or cash flow.
How can blockchain technology change the real estate industry?
Previously, the transaction of high-value assets such as real estate using digital payment methods was not appreciated. Real estate transactions are often done in real life, involving direct transactions with different entities (buyers – sellers). However, blockchain has changed this with smart contracts. The blockchain platform now allows assets like real estate to be tokenized and traded like cryptocurrencies as bitcoin and ether.
For example, a 10-apartment building owned by five different investors is secured on the blockchain, and each investor will own tokens to reflect their ownership of that property.
In this example, the real estate blockchain platform is used to document, store and verify these ownership tokens. The tokens can then be traded, sold and liquidated more easily. The real value of blockchain therefore is not only trust and efficiency but also liquidity. If any real estate property uses blockchain as the foundation, in case of transaction activity, the verification process will become easier.
Real estate contracts enabled by blockchain will not only speed up the transaction process but also save costs and bring transparency, preventing unnecessary mistakes.
The entire real estate transaction process held on the blockchain is verified and systematized in the blockchain system. This is very meaningful for businesses in real estate brokerage.
Blockchain is capable of storing and verifying these important legal real estate documents. Users can easily log in to the blockchain land registry to verify ownership of any plot of land in their area.
Identity verification and contract signing are both possible on a blockchain. Whether it’s verifying a tenant’s income, an employer’s check, or other references, all of the information can be kept on a digital ledger.
In the world, there are many real estate companies that have applied blockchain technology in real estate transactions such as Republic, SafeWire, Vairt, RealT, etc.
However, for blockchain to replace all traditional processes in real estate, it may still take some time. Investors should consider all of these issues and start taking action to access future innovations in the real estate industry.
In the not-too-distant future, every company around the world can apply blockchain as an effective method, across all fields, not only for real estate.
‘Great things often come from the simplest things’. This might be the best description for the tech world in 2022.
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