Blockchain Technology Enters the Real Estate Sector

blockchain

It’s spreading. No, not a new disease but rather a new sector for blockchain to get into. This time it’s real estate and there are a whole lot of ways to transform this “old-fashioned” industry. Can real estate be “tokenized”? YES. Can deeds and titles be brought into the 21st century with blockchain? YES. Can purchases and rents be paid in tokens or cryptocurrencies? OH YES (being done). Here is a great insight to another financial sector being “dragged” into the new world. It’s not you grandparents real estate anymore.
(Bill Taylor/CEO)

“Every now and then, we get reports of another old-fashioned industry embracing Blockchain and its innovations. Even though this parade is mostly led by IT-related industries, such as finance, social media or eSports, their more traditional peers seem to gain pace.

There have been news suggesting that such cumbersome industries as logistics and advertisement gradually let Blockchain into their sacred realms.

One such industries, real estate, seems to have embraced Blockchain under the radar. Certain governments are testing Blockchain solutions to run auctions on public land plots or confiscated properties, and most of them are satisfied and deem the innovation worthy of further development.

Unfortunately, real estate as a business rarely produces any noticeable news when it comes to employment of distributed ledgers.

Tokenization of Real Estate

There is in fact a plethora of companies and startups that use Blockchain-based solutions in the real estate industry. While their approaches may differ, there is one thing they have in common.

Most of them offer some form of property tokenization. The general idea of tokenization is that people may invest in real estate by purchasing digital tokens that represent real property.

Said tokens are used as a sort of share by their holders, even though officially they are not treated as such. Legal constraints in most jurisdictions would prohibit token issuers from officially handling their tokens as shares.

Such tokens, on the one hand, entitle their holders to own a certain percentage of a future structure or building proportionally to the amount they have purchased. Construction companies and contractors, on the other hand, directly or indirectly sell such tokens to raise funds for said construction project…”

Full Story at Cointelegraph