Given the possibilities of blockchain technology, it is difficult to find a segment that it would not affect, and which it would not seek to penetrate. Cryptocurrencies now have a significant impact on the mechanism for making payments, international money transfers and other aspects of the financial services sector. The blockchain projects in real estate look no less promising.
This area also failed to avoid the expansion of cryptocurrency technology. Previously, real estate transactions have never been carried out through digital channels. Such operations are usually carried out offline and provide for personal meetings between the parties to the transaction.
A New Era of Digital Trading Platforms
Now, the blockchain has proposed a way to change this scheme. The introduction of smart contracts based on cryptographic technologies is preparing a revolution in the sale of assets such as real estate. This allows you to trade them as conventional digital coins, such as Bitcoin and Ether.
Real estate trade can undergo significant changes due to a number of advantages from the introduction of blockchain technology:
• Lack of intermediaries;
• Liquidity;
• Real estate splitting;
• Decentralization and transparency;
• Cost reduction
Lack of Intermediaries
The modern system of real estate trading is mainly a process of selection of sellers and buyers and ensuring contacts between them through the provision of mediation services. This is how most companies and agents working in this field act, receiving a certain percentage of the transaction amount for their services.
Nevertheless, the blockchain in working with real estate offers new ways of organizing a trade. It is able to allow trading platforms and online markets to more quickly complete transactions.
An example of international blockchain real estate platform is ATLANT which recently completed ICO to raise funds for the launch of its startup. Its project is based on blockchain technology, which facilitates the execution of real estate transactions with both buying/selling and leasing. The system allows you to organize the process of selling objects (assets) by analogy with the trading of shares on the stock exchange. All transactions within such transactions are made online.
The ATLANT project allows sellers to tokenize their assets, turning them into trading tools like stocks. Then these assets are liquidated by selling tokens through a trading platform. These tokens can be exchanged for fiat money and removed from the system. Buyers who purchase them, in turn, receive a certain share of the purchased real estate.
Brokers, lawyers, and banks have long been part of the system of working with real estate. However, the blockchain may soon begin to play an important role in such transactions. New trading platforms can ultimately take on such functions as organizing and maintaining lists, making payments and storing legal documentation.
The refusal of intermediary services will lead to the fact that transactions between buyers and sellers will be more profitable for both parties since they will save on fees. This will also make the process much faster due to the elimination of the need to prepare “extra” documentation between the three parties to the transaction. You can meet with blockchain companies to hire blockchain developer.
Liquidity
Real estate has long been considered an illiquid asset since it takes some time for operations with it. But this does not apply to tokens since they can be easily exchanged for fiat money and various cryptocurrencies through exchanges.
Another advantage is the absence of the need for the seller to wait for the buyer who can afford to buy his property, especially when it comes to an expensive object.
Splitting Real Estate
By providing the possibility of acquiring objects in parts, and not only entirely, but the blockchain also removes barriers to investment. This opens the way to the market for owners of small capitals who do not have a large amount of cash.
As a rule, to make a purchase in this area, it is required to make a significant amount in advance. Alternatively, investors can come together in groups, acquiring expensive objects for the combined capital. Accessibility to trading platforms based on blockchain technology will allow buying and selling tokens around the clock from anywhere in the world.
In addition, the fragmentation of property can help them avoid the need to engage in such management tasks as maintenance and leasing.
However, some possible difficulties should be considered. Such a modernization of the real estate sector can lead to problems in communicating with tenants. It will also affect other activities related to the real estate sector, such as lending, when the object is provided to the bank as collateral for a loan. All these questions are still open, and they have yet to be resolved. You can meet with blockchain companies to hire blockchain developer.
Also Read: Biggest Trends In Technology
Decentralization and Transparency
Blockchain provides a high level of trust and security, representing a decentralized technology. Information stored in a blockchain is available to all peers in the network, which makes the entire system transparent and unchangeable.
The decentralized network offers confidence to all participants thanks to the ability to access any information stored in it. Since this data is equally available to both buyers and sellers, participants in the parties will be able to trust each other more. The risk of fraud will be reduced to zero.
Smart contracts are also becoming more and more common. In particular, in the US states, Vermont and Arizona are already developing legislation to regulate this area of the digital economy. Thus, intellectual contracts will receive legal status and more opportunities for use outside the blockchain technology.
Cost Reduction
Transparency can reduce all costs associated with real estate transactions. In addition to savings on commission intermediaries, there are other expenses, including the assessment of compliance with the object specified in the transaction value, registration and tax fees, and others. All of them depend on the specific country and the legislation in force at the time of the purchase transaction.
Most of these costs can also be eliminated since the blockchain platform automates these processes. Of course, it will not be possible to avoid paying taxes and other mandatory government fees, but technology does not set such a goal. It can simply make them part of its ecosystem and carry out all the calculations and payments on the machine, freeing sellers and buyers from the need to “run” through various agencies and institutions. To hire a blockchain developer, you can meet with blockchain companies.
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