The blockchain can profoundly change the real estate sector. Its structure does not require any intermediation to complete a valid transaction between two subjects.
The Blockchain guarantees authenticity
Authenticity with the blockchain is guaranteed by the system itself that encrypts the contents of the single transaction.
The following transaction is linked to the data from the previous one and so on.
Furthermore, the database of these recordings does not belong to an institution, but is distributed among the blockchain participants. All have a copy of the ledger that updates automatically.
The distribution protects from counterfeits: you can’t modify only a copy to change the recording.
Find out more about blockchain: watch this video.
In the real estate sector, there are several “institutional” figures and professionals who are included in the sale of real estate as intermediaries.
With the application of the blockchain a lot could change.
Smart Contracts could regulate real estate transactions.
The Smart Contract will allow transaction between buyer and seller (or renter and owner or between owners and managers of real estate etc) without involving other parties. It could be enough a digital signature!
In a hypothetical system of sharing between blockchain platforms it will be possible to cross data (property, buyer etc) to verify, for example, the soundness of the payer.
What are the advantages of blockchain in real estate?
1 – Rapidity
The transactions will be faster without intermediaries and even bureaucratic terms to be respected. Just think of long times to record or transcribe a public act …
2 – Reduction of costs
Cadastral surveys, verification of mortgages, etc are expenses for the buyer, as well as taxes related to bureaucratic procedures.
3 – Protection against fraud.
4 – Reduction of errors in property registrations.
Less people involved, less errors and less delays.
Where the Blockchain is applied to the real estate sector. The first steps.
Several Countries are adopting the blockchain in order to streamline and make the management of real estate practices more flexible.
In Sweden and the Netherlands, the respective governments are testing the blockchain in the real estate sector.
Sweden, by 2019, should complete the mapping of the territory and the digitization of the land registry. This will allow the first trades by Smart Contracts.
Even the Netherlands is proceeding to digitize the land registry.
In Great Britain, this year, some homes were sold using cryptocurrencies as payment.
In Spain, a blockchain system is being tested for the commercial esteem of real estate.
Other projects are active in the United States: in Vermont, partial digitization of the cadastre.
In India: studies for the registration of property on blockchain.
In the Republic of Georgia: archiving on public register of sales deeds and mortgages realized on blockchain technology.