In a massive scale study, it was revealed by International Real Estate Adviser, Savills, that the Global Real Estate Market was valued at a whopping $217 Trillion.
To offer some perspective to that number, here are a few examples of other sectors :
- Stock Market | $67 Trillion
- Gold | 8 Trillion
- Cryptocurrency | $150 Billion
By now, we’ve all heard or seen the term “Blockchain”, across the headlines of newspapers and websites almost on a daily basis. And it is this revolutionary technology that decentralizes digital data, as to keep it incorruptible and transparent.
Originally the exclusive breakthrough for cryptocurrencies, this impacting technology is now being explored for use in other sectors of business and finance. And as you may have guessed, the Real Estate Market is on that short list as of recently.
It’s no secret that the Global Real Estate Industry has been largely controlled by financial moguls and conglomerates - that is, until now.
How, you might ask?
Generally, Real Estate Deals would be conducted over several weeks or months and in person, with several entities involved. Such is the methodology when dealing with the exchange of assets of high value. Blockchain Technology is now disrupting this entire process with its digitalization of financial exchange across the board. And it was only a matter of time before Real Estate was impacted with this technology.
Now, owners and investors do not need to even be present to acquire or broker a purchase or sale. It’s all done digitally and more secure than ever.
So let’s take a look at how Blockchain Technology will not only shake up the way Real Estate business is done but how it will make the investing aspect of it accessible to nearly everyone across the globe.
- Smart Contracts - In a nutshell, the terms agreed upon are laced into digital lines of code and placed into a decentralized Blockchain network. They are self executing and enforcing data at all times, keeping terms enforced and transparent in real time. Even more assuring is that Smart Contracts are now becoming admissible records in the U.S. Courts, raising their overall credibility and familiarity. A once complex and lengthy process now becomes a quick and transparent transaction, from the comfort of your desk or smart phone.
- No More Middlemen - Another impact of implementing Smart Contracts is that it negates any use of middlemen such as Brokers, Attorneys and Banks, all while keeping the entire process transparent and secure. Sidelining all these 3rd Parties also removes many fees and commissions from the equation of a deal, saving substantial amounts of money for all immediate parties involved. Consequentially, taxes, registrations and inspection fees are also neutralized during the entire process. Blockchain Technology and Smart Contracts are able to take on the processing of payments, listings, legal documents, simplifying and expediting the entire process.
- Affordability - You will no longer have to be a multi-millionaire to own equity in a new construction build, commercial, residential or even established property. You can invest any amount, without a traditional minimum entry threshold, and obtain Fractional Ownership. Allowing investors of all walks of life to participate in deals that would normally require mass amounts of finance upfront. On the flipside of that, sole owners of large commercial real estate won’t be forced to sit and wait for another singular investor to purchase their property. New technologies will allow a large group of investors to combine their tokens of all values to purchase any size of property, saving time and money for the seller and bringing new investment opportunities to the buyers.
And while just a handful of platforms are attempting to break into the field of Blockchain Real Estate, it seems that some are planning to make platforms as inclusive and convenient as possible.
Take BitRent for example, they’re not just bringing the ICO concept to the Real Estate Market by offering all the above mentioned capabilities but they’re implementing never before used features to provide an entirely comprehensive platform.
From the early stages of construction, an investor will be able to take advantage of the use of such resources as BIM Technology and RFID Tags. These two technologies, combined, allow for digital monitoring and control at all stages, from any location in the world, in real time.
Blockchain Technology will now allow assets such as land and property to be quantified as cryptocurrency and traded, bought and sold with the greatest of ease. Allowing for the purchase of businesses, shopping centers and even hotels to any investor and essentially affordable to everyone.
To imagine that one can own a piece of commercial real estate, as big or small as I want, that sits across the globe - is in a word, mind-blowing.