Few sectors are as dynamic as real estate: from the quest for dream homes to the demand for commercial hubs, no one can deny the appeal of real estate investing. At the heart of this dynamic industry is a technology designed for continuous evolution: blockchain.
Blockchain is mainly known in relation to cryptocurrencies, and those who look at the bitcoin price prediction for 2025 are also introduced to the concept of this technology. However, the use of blockchain technology goes beyond the realm of digital currencies, as it has impacted many industries including supply chain and finance, and has also left a mark on the real estate sector .
As the data suggests, blockchain holds considerable potential in the real estate sector. For example, in 2020 alone, the global real estate blockchain market was worth $328.3 million, and it is expected to reach $3.8 billion by 2028. This massive growth illustrates a sustained expansion of blockchain applications in the real estate sector. real estate landscape – in fact, around 86% of industry decision-makers believe blockchain can be truly transformative.
Most common applications of blockchain in the real estate sector
Due diligence
In the real estate industry, diligence activities tend to take a lot of time. Before buying or renting a property, different intermediaries inspect the documents to deal with possible future problems, whether legal, financial or technical. Additionally, property information is written on paper, making it subject to change or corruption.
However, blockchain technology has the potential to change this: digitally storing property-related documents on blockchain-powered platforms makes them easily accessible while protecting them and ensuring that they will not be altered in any way. In other words, implementing blockchain means automating due diligence, making it faster and more accurate.
Property search
Brokers, renters, landlords, and buyers rely on different listing platforms to search for property information. These platforms often require high fees and are subscription-based. Unfortunately, they often lack accuracy and offer outdated and distorted information, leading to inefficiencies in the real estate process and, often, litigation.
Fortunately, blockchain solves this problem by decentralizing data and allowing everyone to share it in a P2P network. Additionally, it allows brokers to benefit from additional data monitoring solutions while reducing associated costs.
Property management
In the traditional real estate landscape, property management is a complex task, especially when different stakeholders are involved. There are often two ways to approach property management: offline, through manual paperwork, or using independent software. The information is limited to a particular person and a particular database, respectively.
However, blockchain can also help solve this problem in real estate by increasing its role in real estate transactions. How exactly does it work? A blockchain-based property management system can make every step of the process much easier, from start to finish. For example, smart contracts can automate rent payments between tenants and landlords, meaning the security deposit will automatically be transferred back to the tenant’s account at the end of the lease, ensuring a seamless experience for both parties .
File and payments
Another area of real estate impacted by blockchain is records and payment management. Currently, the involvement of third-party intermediaries and extensive documentation leads to a difficult, time-consuming and costly process, an effect that worsens when it comes to mortgages and international transactions.
However, blockchain technology can simplify the filing process, bringing innovation to the world of real estate by introducing ownership-verifiable digital identities. Likewise, the introduction of crypto assets can reduce the barrier of various currencies used in multiple locations, thereby reducing the fees and taxes involved and improving the payment process.
Real estate investment
Finally, a blockchain-based real estate platform can also facilitate the investment process through tokenization and fractional ownership. Many companies don’t really know how real estate tokenization works, but on the other hand, some organizations are implementing it on a large scale.
Simply put, in the tokenization process, the owner offers digital tokens to those who share ownership, allowing investments to be tracked through the blockchain, where all transactions are time-stamped and immutable. The most important benefit of tokenizing real estate through blockchain technology is reducing the risk of fraud, which is quite common in the industry.
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Common Obstacles to Implementing Blockchain in Real Estate
Although blockchain brings incredible benefits to the real estate industry, it is by no means a perfect technology, and given that its application in real estate is still relatively new, it is essential to understand the challenges that lie ahead.
Cost
Like any other technology, blockchain adoption in real estate is expensive as it involves costs at different stages, from development and integration to training. Let’s say you’re an aspiring real estate salesperson; in such a case, this initial financial commitment could prevent you from adopting the technology. A solution to this problem would be the adoption of public blockchain infrastructure, such as the BSV blockchain, offering incredible functionality without incurring infrastructure costs.
Skill
Developing and managing blockchain solutions requires specialized technical expertise in areas such as cybersecurity, programming and smart contract development; However, these skills can be expensive and rare, and without access to qualified professionals and appropriate in-house expertise, implementing blockchain in real estate can be quite difficult.
Security
Although blockchain has inherent security advantages, it remains prone to vulnerabilities such as insider threats and smart contract bugs. For this reason, it is necessary to implement strong security measures and perform continuous monitoring to protect sensitive information in the real estate world.
Regulatory landscape
When it comes to blockchain in real estate, the regulatory landscape continues to evolve and countries around the world have unique laws regarding the technology and real estate. This aspect is worth mentioning because the management of smart contracts and digital property registries requires clear regulations and rules. Fortunately, the BSV blockchain was created to work within the legal system and comply with different regulations and rules, so it is the ideal solution to ensure initial compliance.
The essentials
There is no doubt that blockchain holds great promise in real estate, simplifying processes, strengthening security measures and providing new opportunities for buyers and sellers. Although technology continues to evolve, it’s worth paying attention to its advancements and how it will transform the world of real estate.
Editor’s Note: The opinions expressed here by the authors are their own and not those of Impakter.com — Cover photo credit: Free pik.
