Technology continually improves the way we transact in business and real estate. I believe cryptocurrency and blockchain technology are going to have a positive impact as well.
Let me first say – I will touch on some of the aspects, but this article isn’t meant to give you a detailed explanation of cryptocurrency and blockchain technology.
For a quick layman’s guide on that please go here: ScaredyCatGuide to Knowing What the Heck Bitcoin Is
What I would like to talk about is the facets of real estate transactions that will be vastly improved by using this technology.
Three Reasons Blockchain Technology Will Change Real Estate
1.) Blockchain tech provides a quick and safe way to transact money and data
The blockchain is basically a ledger. It’s one that is fully transparent and cannot be manipulated because there is no central point of data transmission or transactions.
For instance, there are more than 10,000 people running the bitcoin blockchain (also known as running a node) on servers across the world. Thus, it is decentralized and no single point to cook the books.
Depending on the blockchain and crypto being used; data – such as money can be transferred in seconds or minutes. As opposed to dealing with wire transfers and other traditional bank transactions that take much longer.
Thus, the application for real estate is great! You can have financial transactions that execute nearly immediately as well as having a secure record that cannot be lost or forged.
This is certainly useful with the transfer and recording of deeds, titles and more!
2.) Two words: Smart Contracts
One of the biggest selling points of blockchain technology is the ability to use “smart contracts.” When information is entered onto the blockchain it basically becomes impossible to change, as I mentioned.
With a smart contract, you are entering an agreement onto the blockchain. The technology will then follow the protocol of that contract.
For example, the deposit on a property would be held in the smart contract and then distributed per the terms of the contract. This would prevent situations where a buyer doesn’t fulfill their obligation and then tries to hold up the earnest money with disputes.
The contract is what the contract is – it will be executed according to that. No he said, she said type nonsense that just leads to unwarranted legal fees.
3.) Transparent and immutable record of title
I’ve mentioned the transparency and the fact it is nearly impossible to manipulate the blockchain – so how else can that be of use?
With chain of title!
Think about this, once a clean title is entered onto the blockchain that information is there forever. Each proceeding transfer of that title will be too.
Basically, we would end up at a situation where you never have to worry about record of title and it being disputed. It’ll be right there on the blockchain.
Thus, the odds of paperwork being incorrectly filed are minimized. The process will take a fraction of the input compared to current processes.
Also, information not making it from the title company to the county’s property record office is thing of the past as it will all be on the blockchain.
Just the reduction in paperwork and increased efficiency in communicating with the county property record office makes this a no brainer!
There are so many ways this technology can improve real estate transactions. These are just a few I particularly like.
Again, an environment with near instant transaction processing. Immutable records that cannot be lost (cause yeah, that definitely happened during the housing crisis) are reasons I hope this tech makes its way into real estate.
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