Few sectors are as vibrant as real estate – from the quest for dream houses to the demand for commercial hubs, no one can deny the allure of property investment. At the core of this dynamic industry lies a technology designed for ongoing evolution: the blockchain.
Blockchain is primarily known in relation to cryptocurrencies, and those who look into bitcoin price prediction 2025 are also introduced to the concept of this technology as well. However, the use of blockchain technology goes beyond the realm of digital currencies, as it has impacted many industries, including supply chain and finance, and has also left a mark on the real estate sector.
As the data suggests, blockchain holds substantial potential when it comes to the real estate sector. For example, in 2020 alone, the global market for blockchain in the real estate industry had a value of $328.3 million, and it’s expected to reach $3.8 billion by 2028. This massive growth illustrates a sustained expansion of the applications of the blockchain in the real estate landscape – in fact, around 86% of decision-makers in the industry believe that blockchain can be genuinely transformative.
Most common applications of blockchain in the real estate industry
Due diligence
In the real estate industry, diligence activities tend to be time-consuming. Before purchasing or renting a property, different intermediaries inspect documents to tackle any future problems, whether legal, financial, or technical. Furthermore, the information about the property is written on paper, which makes it prone to change or corruption.
However, blockchain technology has the potential to change this – storing digitally property-related papers in platforms powered by the blockchain makes them easily accessible at the same time safeguarding them and ensuring they won’t be altered in any way. In other words, implementing the blockchain means automating due diligence, making it faster and more accurate.
Property Search
Brokers, tenants, owners, and buyers rely on different listing platforms to look for property information. These platforms often require high fees and are based on subscriptions. Unfortunately, they also frequently lack accuracy, offering outdated and distorted information, leading to inefficiencies in the real estate process and, often, disputes.
Fortunately, blockchain tackles this issue by decentralizing the data and allowing everyone to share it in a P2P network. Furthermore, it enables brokers to receive extra data monitoring solutions while reducing the associated costs.
Property management
In the traditional real estate landscape, property management is a complex task, especially when different stakeholders are involved. There are often two ways of approaching property management: offline, through manual paperwork, or by using independent software. The information is confined to a particular person and database, respectively.
However, blockchain can also help tackle this issue in real estate by increasing its role in property transactions. How exactly does this work? A property management system based on the blockchain can make all the steps of the process a lot easier from the beginning to the end. For example, smart contracts enable the automation of lease payments between tenants and landlords, meaning that the security deposit will be automatically transferred back to the tenant’s account when the lease finishes, ensuring a seamless experience for both parties.
File and payments
Another area of real estate that the blockchain impacts is the management of files and payments. Currently, the involvement of third-party intermediaries and extensive documentation lead to a troublesome, lengthy, and expensive process, an effect that escalates when it comes to mortgages and international transactions.
However, blockchain technology can simplify the filing process, bringing innovation to the real estate world by introducing property-verifiable digital identities. Similarly, introducing crypto assets can decrease the barrier of various currencies used in multiple places, reducing the fees and taxes involved and improving the payment process.
Real estate investing
Finally, a real estate platform based on the blockchain can also make the investing process easier through tokenization and fractional ownership. Many companies don’t really know how tokenizing real estate works, but on the other hand, some organizations are implementing it on a massive scale.
Simply put, in the tokenization process, the owner offers digital tokens to those sharing the property, enabling the monitoring of investments through the blockchain, where all the transactions are time-stamped and immutable. The most significant advantage of tokenizing real estate through blockchain technology is reducing the risk of fraud, which is quite common in the industry.
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Common roadblocks in implementing blockchain in real estate
While blockchain brings incredible advantages to the real estate sector, it is by no means a perfect technology, and given that its application in real estate is still relatively new, it’s essential to understand what challenges lie ahead.
Cost
As with any other technology, adopting blockchain in real estate is expensive because it involves costs at different steps, from development and integration to training. Suppose you are a budding property seller; in such an instance, this upfront financial commitment could prevent you from embracing the technology. A solution to this would be the adoption of a public blockchain infrastructure, such as the BSV blockchain, offering incredible features without incurring infrastructure costs.
Expertise
Developing and managing blockchain solutions demands specialized technical expertise in areas such as cybersecurity, smart contract programming and development; however, these skills can be expensive and scarce, and without access to skilled professionals and proper internal expertise, implementing blockchain in real estate can be pretty challenging.
Security
Although blockchain has inherent security advantages, it’s still prone to vulnerabilities such as insider threats and smart contract bugs. Due to this, it’s necessary to implement solid security measures and conduct ongoing monitoring to protect sensitive information in the real estate world.
Regulatory landscape
When it comes to blockchain in real estate, the regulatory landscape is still evolving, and countries across the globe have unique laws regarding tech and real estate. This aspect is worth mentioning because managing smart contracts and digital property records demands clear regulations and rules. Luckily, the BSV blockchain was created to work within the legal system and comply with the different regulations and rules, so it’s the ideal solution to ensure upfront compliance.
The bottom line
Undoubtedly, blockchain holds substantial promise in the real estate realm, simplifying processes, boosting security measures, and bringing new opportunities for buyers and sellers. While the technology is still evolving, it’s worth paying attention to its progress and how it will transform the real estate world.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — Cover Photo Credit: Freepik.
