There is no doubt that the world of finance and technology has been constantly changing and evolving compared to before. Crypto and blockchain have also become rapidly popular hot words, and our world is rapidly incorporating some digital financial entities into mainstream financial transactions. The real estate market is no exception.
What exactly is a blockchain?
First of all, the concept of blockchain may seem very complicated, but in essence it is a database that stores data in digital blocks and forms a chain. When new data appears, it will directly enter a new block. When a specific block is filled with data, it will be linked to the previous block, so that the data remains in chronological order, and each block will be time stamped when it is added to the chain. Essentially, the operating process of the blockchain is as follows:
- Request to generate transaction or record
- The request is sent to the computer network
- The computer uses a specific algorithm to process and verify the request
- After the verification is passed, the ledger will be updated to a new data block
- The data block is time stamped and added to the blockchain, and cannot be deleted or tampered with
Although different types of information can be stored on the blockchain, its most common use is as a transaction ledger. Take Bitcoin, for example. Bitcoin uses the decentralization of the blockchain to ensure that no independent individual or group can control it, but all holders have the right to control it. The data on a decentralized blockchain cannot be tampered with, which means that all transactions are permanently recorded and open and transparent to everyone.
A closer look at the use of real estate
Since blockchain does have many potential uses, many people predict that it may also have a great impact on the real estate market. The most fundamental use is that it can promote additional trust in the real estate market transaction process. Blockchain can be used to verify and protect real estate transactions and automate many parts of the transaction. Other impacts include but are not limited to:
Verify property rights
Having the ability to identify property records is extremely important. This will allow both parties in a transaction who may not know the other party to believe that the seller has real property rights and that there are no contradictory ownership rights. This is a very important potential advantage of using blockchain, which may greatly improve the efficiency of the real estate transaction process.
A smart contract does not refer to a digital version of an existing legal contract. Instead, it is a string of computer code used on the blockchain to automatically trigger certain parts of the real estate transaction process. Smart contracts can be used for custody management, payment, ownership transfer, etc.
Traditionally, real estate transactions have always been implemented face-to-face. However, the introduction of smart contracts using the blockchain platform may make the value of real estate tokenized, and even the same discount phenomenon as Bitcoin and Ethereum in Crypto .
The transparency and trust of the decentralized blockchain network is improved. It also has great potential to reduce the transaction cost of real estate. Of course, by cutting the commissions and fees of various intermediaries. And related costs such as inspections, loans and tax assessments can save expenses. If your real estate transaction process becomes more and more automated. Some of these costs may be reduced or even eliminated.
Although the blockchain has great potential and uses in the real estate market. But many experts believe that blockchain is used in the mainstream real estate industry. It may still take a few years. Nevertheless, this is indeed a range of knowledge with great potential. It is also very worthwhile for us to delve into its potential and to study and plan its application in real estate transactions in the future.
There is no doubt that blockchain will have a vital influence in the future real estate market. But no matter how it will change the way of buying and selling transactions in the real estate industry. The only thing that will not change during the real estate transaction is the need to find and hire a suitable real estate agent. This will put all experiences between a satisfying and successful real estate experience. And a slightly stressful real estate experience.