Let’s establish the facts of the matter. We’re all bullish on blockchain. Right?
Everyone is bullish on blockchain. Everyone is betting on the housing market to make the best of blockchain technology. So how does an industry that prides itself in keeping several aspects of its operations secret, deploy the technology at the heart of disrupting such practices?
The New Technology on the “Block”
Secrets are hard to keep in today’s hyperconnected and digitized world. So the real estate industry is just bowing down to the pressure for more transparency, the need to keep up with new technologies, and the disintermediation is coming from start-ups that are making some of this information public.
When we speak of information, we referring to comparable lease rental rates on various properties, or how property prices are arrived at, and the valuation process — the kind of information you’ll find in some hidden server hidden.
At the moment, there’s a high potential for fraud in the real estate market. However, the new technology on the block could enable the real estate industry to address these inefficiencies. Until recently, blockchain technology was only known inside computer scientists circles for powering the bitcoin protocol. However, someone somewhere realized the genius behind the technology through smart contracts, and now industry players are rushing to gain an advantage.
But is the real estate sector ready for blockchain technology?
The Cost and Benefit Analysis
Blockchain has the potential to transform the core of the real estate industry in a few ways. For instance, disrupting property transactions; such as sales, purchases, financing, management, and leasing, for smart contracts, which will automate these processes.
Over time, experts predict that the scope of blockchain applications will have a broader impact. Some projects are already working on leveraging the technology for a public utility such as waste and water management, smart parking, and energy management.
Blockchain technology might not address all the inefficiencies in the current business models. Real estate companies are still in the process of evaluating the characteristics of blockchain technology before they can move forward with investing in it. Many of the industry players want to see particular prerequisites for blockchain to make sure it is relevant to their operations.
Afterward, these real estate companies will have to identify a process in their business model that is blockchain-ready. The results of the cost and benefit evaluation could hasten or delay blockchain disruption in the real estate sector. While doing so, these companies also have to assess the extent of overhauling the system that’s already in use. Will there be interoperability with other system used by different stakeholders in the industry?
While blockchain does have applications in real estate, several factors determine how fast or how slow changes in the industry are realized.
What do you think? Let us know in the comment section below.