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May 2009

How Can Blockchain Transform the Real Estate Sector?

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blockchain real estate

blockchain real estate

Blockchain technology has the potential to revolutionize the real estate sector, from property trading to land registry process, diligence, and quick settlements.

Real estate is one of the significant assets in the world. The survey done by Grand View Research says that the global real estate market is estimated to reach a revenue of $4,263.7 billion USD by 2025. However, citizens in developed countries like the USA lost approximately $150 million because of real estate scams in 2018.

Though a lot of technology advancements have been made to overcome real estate scams and disputes, no technology solution has been found capable of completely doing so. If you would try to relate real estate with blockchain, you won’t find any relation at first.

But when we look at the possibilities that blockchain can bring, blockchain for real estate tends to be the next step in the revolution of the real estate industry.

blockchain real estate

In this article, we will discuss how blockchain can help overcome the problems faced by the real estate industry currently. We will map challenges faced by the industry with blockchain solutions.

Here are some of the issues faced by the real estate industry and why it requires a blockchain solution:

Lack of Transparency

The real estate market is filled with too many intermediaries who always wish to make a profit. Every intermediary involved in the process has a business model that they remain biased towards, as the deal can make them gain profits. They usually prefer to restrict options so that they are only available to sellers from whom they can make more benefits.

Lack of Liquidity

The issue of liquidity has existed in the real estate industry for a long time. Liquidity is termed as how rapidly any asset can be transformed into cash. The reasons why real estate properties are not as liquid as cryptocurrencies are because:

  1. The user base for buying cryptocurrencies is large than that for real estate.
  2. Crypto assets can be sold quickly by getting listed on public exchanges.

Also, entering real estate trading is quite costly because of the presence of intermediaries in the ecosystem.

Reliability

You might know how online scams can affect real estate traders. Imposters can deceive buyers into buying a property that is not even available for sale using their attractive website. Buyers may not be educated enough to perform background checks of the middlemen in the real estate ecosystem. It leads to a lot of legal issues and a loss of money.

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Correctness

Forged documents play a crucial role in deceiving buyers and convincing them to purchase illegal property. Morphing applications can edit the entire image of a person. Such software can make it possible to edit the text in a physical document. These documents can be any bank-related statements or property papers.

Here’s how implementing blockchain in real estate can offer benefits:

Process of Searching Properties

Nowadays, brokers, owners, tenants, and buyers access and upload property listings via a third-party property listing platform.

Most of these platforms are subscription-based and request high fees from users. Also, the current process lacks standardized processes and has poor communication between the platforms. Besides, the data on third-party property platforms is fragmented across multiple listing sites, leading to data silos.

Blockchain can solve this issue by providing a single decentralized database to maintain the property listing. Since the data is distributed across a peer-to-peer network, brokers would have control over the data. All stakeholders of the platform can access the information without being able to manipulate it.

Property Management

Property management is complicated and involves multiple stakeholders, including property managers, vendors, landlords, and tenants. Many properties are either handled offline via paperwork or by software applications that cannot be integrated.

With a decentralized application that uses smart contracts, the process of property management, from managing cash flow to signing lease documents and submitting maintenance requests, can be performed in a secure yet transparent way. For instance, tenants and landlords could sign an agreement added to smart contracts that includes information like rental value, property, tenant details, and payment frequency.

Once the terms are agreed upon, lease payments are automatically initiated from the tenant to the landlord using smart contracts. Upon the lease period termination, the security amount is also sent back to the tenant’s account automatically. Implementing blockchain into property management can help to bring such a transformation.

Financial Evaluation and Due Diligence

Paper documents for identity proof still exist in the market nowadays. It requires a significant effort and time to perform financial verification and due diligence. Since it is a manual verification process, it also increases the chances of errors and usually involves third-party service providers. Such factors lead to additional costs and consume a lot of time in due diligence.

With digital identities on the blockchain, the whole process can be done online in a secure way. As a result, it improves efficiency, cuts down costs, reduces the risk of manual errors, and enhances data security.

For example, information like financial and legal status, vacancy, and performance metrics of a person can be associated with their digital identity, streamlining the process of property trading while adding layers of security.

All parties involved in property management would have their own digital identities. Everyone can use the property management application to send and sign property documents using smart contracts.

Land Registry

The process of a land registry currently involves middlemen who hold information that nobody else can access. The implementation of blockchain in the land registry could transform the process by allowing anyone to access and save information without the involvement of the third party.

Blockchain could also solve fraud issues by allowing everyone to access land title records while maintaining the immutability of land records. With the timestamped and immutable record of transactions, you have full control over your land title and forged documents become a thing of the past.

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Takeaway

Blockchain has the potential to bring transparency, enhance efficiency, and cut down costs for real estate investors by eliminating inefficiencies from key processes.

This article was curated through CryptoCurrencyNews’ Contributor Program. If you would like to write for us, send us your submission!

Featured image: DepositPhotos © sdecoret

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Facebook Warns Libra Currency May Not Hit the Market

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Libra

Libra

The month of July has been one of turmoil and chaos in the crypto sphere, and one of the big reasons behind such a state of affairs was the announcement of the Libra coin, the cryptocurrency that is to be introduced by Facebook (NASDAQ:FB) next year. As soon as it was announced, it sent alarm bell ringing among regulators all across the world. The head of the United States Federal Reserve, Jerome Powell, expressed his skepticism, while the President of the United States, Donald Trump, did the same in a series of tweets.

Confusion in the Crypto Market

Eventually, such comments led to complete chaos in the crypto market as more and more traders believed that such comments could eventually lead to skepticism regarding the entire crypto market. As a matter of fact, Bitcoin’s excellent run during the first half of the year stuttered in July as the token continued to lurch from one extreme to the other on the back of any news relating to Libra.

However, todayFacebook announced that although it has every intention to launch Libra officially in 2020, there are plenty of factors that could scupper its plans. In fact, the social media giant seemed to concede in its quarterly report that the cryptocurrency might never actually be launched.

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The company’s statement seemed to reflect its wariness at the regulatory scrutiny that it is surely going to face when it launches Libra. In its filing made to the SEC, the company stated, “Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue.” In such a situation, the company believes that it would not be able to roll out its product in its entirety in a timely manner, and it would eventually result in a poor product.

It remains to be seen how the crypto market reacts to the latest installment of dramatic news from Facebook’s Libra currency.

Featured image: DepositPhotos © TarasMalyarevich

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Bakkt is All Set to Introduce Bitcoin Futures in September

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Bakkt

Bakkt

Bakkt is all set to launch its much-awaited platform for Bitcoin futures.

When cryptocurrency first grabbed the attention of the global public, it was still looked upon as a novelty and something far too chaotic to be regulated by the relevant authorities. However, much has changed over the past couple of years as a range of fresh products have been launched, and perhaps the most important one is Bitcoin futures.

Everything is on Schedule

Earlier on this year, cryptocurrency firm Bakkt announced that it was all set to launch a fully regulated Bitcoin exchange in September. Moreover, the company also stated at the time that Bitcoin futures were going to be offered in the said exchange. It goes without saying that there is a lot of excitement around this platform, and recently, the company confirmed that it is on track for the launch.

The new platform that is going to be launched by Bakkt is aiming to make an investment in Bitcoin easier for most customers. However, it should be pointed out that the primary focus for Bakkt is to attract institutional investors to the platform and if it can do that, then that could prove to be a major breakthrough for the entire crypto space.

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In addition to that, the Bitcoin futures contracts that are going to be traded on the platform are going to be settled in Bitcoin. This particular feature makes it especially advantageous for institutions that might want to avoid any kind of volatility. Over the years it has been noticed that advanced platforms often failed to meet their deadlines when it came to launches.

However, Bakkt has managed to buck the trend and announced that it is going to launch its new platform on September 23 as planned. It is a platform that could have far-reaching consequence for the entire crypto space if it does manage to attract a considerable chunk of institutional investors.

Featured image: DepositPhotos © grejak

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Over 93.5M Ripple (XRP) Moved Across Exchanges: Market Reaction

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Ripple

Ripple

Over the past week or so, Ripple has been in the news after it emerged that the company is exploring the option of actually going for an initial public offering at some point. However, in a new development that might not please XRP fans, it has emerged that as many as 93.5 million tokens of the cryptocurrency were moved across crypto exchanges. Last year, there was a lot of controversy with regards to Ripple’s practice of selling large volumes of XRP and thereby affecting the price of the world’s third-biggest cryptocurrency.

Major Details

Market watchers revealed that the transactions took place soon after the Chief Executive Officer of Ripple, Brad Garlinghouse, revealed that plans are being made with regards to an IPO. However, analysts are now wondering whether the news of the IPO is going to lead to a rally in the price of XRP in the near term.

More importantly, it should be noted that the 93.5 million XRP tokens were moved from wallets to exchanges in four transactions. The entities involved in the transactions involved Bithump, Bitstamp, and Coincheck. It remains to be seen how this will affect the XRP price, and crypto investors could do well to keep an eye on the token over the coming days.

However, that is not all. XRP is best known for its use case, which is in the sphere of payments, and Ripple is looking to expand the payments network in a big way in 2020.

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The company revealed earlier this week that in 2020 it is looking for ways in which it can help individuals and enterprises make cross border payments with far more ease. It is important to note that Ripple has already managed to sign up 150 validators for its XRP ledger, and that is a significant development when it comes to eventual expansion.

Featured image: DepositPhotos © adriantoday

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