July 18, 2017

The Inevitable Blockchain Integration

Posted in Keith Knutsson, Real Estate tagged , , at 1:51 am by Keith Knutsson

What is blockchain? To give some background, the term is being heard more and more around the financial realms. The most notable application of it is through the cryptocurrency, Bitcoin, which is only one of 700 different applications for the technology. Blockchain is a type of decentralized database that supports and provides a constantly expanding inventory of records, known as termed blocks, which cannot be adjusted or altered. Each block of information contains a timestamp and link to a previous produced block in the blockchain. This type of creation operates as a public ledger for all transactions, allowing users to connect to the network, report new transactions and verify transactions. Blockchain offers a better way to appropriately identify the worth and value of a something by tracking the history of transactions and where and what that item has been traded for.

 Many still do not understand the magnitude of which blockchain technology can be implemented in our daily lives. Specifically, in the commercial real estate (CRE) industry the impact could be vast. Information concerning market comparisons, buyers, sellers, reporting, title work, and vendor work for individual properties. The benefits include immense time savings, limitation of waste and transparency. According to Cushman & Wakefield, once “adopted by the CRE industry, blockchain technology will make leasing, buying, and selling, of property much more informed, fluid and efficient.”

Upon the digitation of real estate contracts, each commercial property will have its own unique “digital signature” with details of rental performance. Transaction time will be completed in a matter of seconds rather than days, weeks, or months. After concluding a deal, the payment process between tenants and landlords would be more easily facilitated. Imagine trading property similar to buying ‘stocks with blockchain,’ properties in bustling markets could trade hands many times in a single week, depending on investors strategies.  

 A great example of blockchain eliminating problems of the “old” is through property titles that are usually susceptible to fraud and costively administrative and labor fees, by having publicly-accessible ledgers.

 This evolution of real estate is being explored in other countries, such as, in Sweden, the government land registry, testing land title transfers on blockchain. “We could also begin to see this technology implemented in cross-border transactions,” says Keith Knutsson of Integrale Advisors.

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