Last December 2017, the value of Bitcoin neared the $20,000 mark, setting off great speculation, excitement (and some skepticism) about the future of cryptocurrency. While much of the news focused on bitcoin as an asset, many of the most impactful applications center around the underlying technology – the blockchain. Blockchain technology is transforming industries, including real estate, to make them more modern and efficient.
During the 9th session of the World Urban Forum in February, incoming World President Assen Makedonov gave a speech on transparency and blockchain technology in the real estate industry. Following are highlights of the presentation, excepted from the presentation slides.
What is blockchain?
Blockchain is a public way of storing the data or digital registry of transactions, deals and contracts. Any event information is recorded into “blocks,” which are united in chains, forming blockchain registry. You cannot change or delete these blocks or its sequence. You can only create a new one.
Copies of blockchain are stored and processed on independent computers of blockchain-net participants. Any net user has access to the latest version of the registry, but the level of access differs. The details of a deal can be seen only its participants, while others can see only the deal itself.
Advantages for the real estate industry
With the use of blockchain and other distributed registry technologies, real estate operations will become easier, quicker and cheaper. The real estate market will get rid of excess middlemen and become more safe, transparent, i.e. more liquid.
Blockchain technology directly touches and impacts the following areas:
- Money Transfers
- Smart Contracts
- Reduction of Transaction Costs
- Object, Deal & Property Registries
- Escrow Accounts
- Liquidity & Transparency
World President-elect Assen Makedonov included in his presentation information on GREM (Global Real Estate Market), an innovative real estate platform that unites all the advantages of blockchain technology which aims to make the global real estate market open and available to all. Its mission is to be a convenient, simple and safe place for real estate deals.
The GREM platform is a single global platform for communication and concluding deals between main market participants (dealers, brokers, property owners), experts and service providers (investors, developers, architects, appraisers, notaries) and buyers of real estate around the world. It allows all market participants to interact in an online-network, eliminating geographical, informational or bureaucratic barriers.
All deals conducted on the platform are registered in the blockchain register, which cannot be changed or forged. Holders of the platform’s blockchain deals registry will be the largest legal and insurance companies, banks and specialized state bodies in most countries.
Blockchain technology adoption
Both technology and real estate experts say blockchain technology has an important place in the commercial real estate market with its ability to streamline processes, reduce fraud and cut costs, but the adoption rate is a work in progress.