One of the world’s oldest businesses is about to experience disruption from one of the world’s newest. Buyers, sellers, and renters of real estate are experimenting with blockchain technology to trim burdensome middlemen from the industry.

Precious few real estate transactions proceed directly from provider to client. There are typically notaries, agents, lawyers, banks, trusts, and more in the mix. Even relatively simple issues, like renting parking spaces or charging for utility use, involve intermediaries.

Blockchain Real Estate

While blockchain adoption remains low and the technology largely untested, there are at least two major arenas that stand to immediately benefit from blockchain use – repetitive transactions and good old-fashioned liquidity.

Automating Micropayments

Finding a city parking spot is a chore. It involves a lot of mindless driving, checking of signs, and an antiquated payment process. Either a human being or a machine takes your fiat, records that transaction on a paper slip, and then that paper slip tells another human or machine that you are all paid up and free to leave the garage.

Running a parking garage is no picnic, either. Someone has to pay those human beings or service those machines. They need to be filled with paper slips, and someone has to check at the end of the day if the system is running as expected. As anyone who has stood in line to pay for parking after a major sporting event can tell you, one broken machine or lackluster human in the mix can cause a serious bottleneck.

Enter the blockchain, embodied here by prospective solution provider PARKGENE. Using the company’s GENE token, drivers can find, reserve, and pay for a parking spot through a mobile app. The parking lot operator gets a real-time snapshot of availability, and there are no messy credit card transaction fees or payment bottlenecks.

Parkgene

Parking is just one example of a repetitive real estate transaction that could benefit from blockchain automation. Similar tech solutions are being considered for hotel rentals and routine utility payments.

Beyond the superficial use cases, like Russian hotels accepting Bitcoin ahead of the World Cup, several tokens are already in play to allow hotel owners to cut management companies out of the mix and rent directly to their customers.

LockChain aims to bring an Airbnb atmosphere to major hotel chains with zero commissions and the ability to list available rooms directly on the blockchain.

“Advanced blockchain technology and the use of a native token will allow us to operate at effectiveness which is unmatched by any other accommodation provider in the industry,” LockChain stated. “This will allow us to cut out all commissions on revenue and focus on providing value driven service for a fixed monthly fee in combination with a ‘freemium’ model, where some extras can be provided at an additional price.”

Lockchain

Cut the Paperwork

One of the best things about dealing with real estate is its relative stability; the house or lot physically exists in a fixed location. Moreover, it’s tied up in a nearly inscrutable web of legal and regulatory red tape.

Ironically, this is also one of the worst things about real estate. It is by definition an illiquid asset. The process of turning your home into a cup of coffee or concert tickets involves banks, real estate agents, home inspectors, and more.

Moving some or all of the paperwork associated with buying or selling a home onto a blockchain turns a byzantine process into a fairly straightforward transaction. Everyone at every stage of the process has access to the applicable documents, and smart contracts are verified and time-stamped by virtue of the blockchain rather than an agent or notary. The fees for all of those steps and services are also drastically reduced.

Introducing blockchain tech into the mix won’t quite make turning houses into dollars easy. Some may argue that it probably shouldn’t, due to the sums of money and responsibility involved. But blockchain tech has the potential to drastically reduce the time and money spent on the average real-estate transaction.

One company exploring this arena is REX. Buyers and sellers can use the company’s blockchain, with a REX token, to find, list, and buy properties. The REX system is also self-polishing; it rewards listers for keeping information clean and timely.

REX

“Through a decentralized marketplace, REX offers a spectrum of information ranging from tax, sales, trends, and neighborhood all contributed by users,” the company offers in its FAQ. “Spam and stale listing data is curated by community members that are compensated for their contribution to the REX ecosystem. It’s the real estate listings industry, democratized and decentralized.”

Spreading the Wealth

Real estate is one of the big boys. It’s a trillion-dollar business. This fact has not gone unnoticed by crypto sphere investors. In addition to disrupting the real estate process itself, several cryptocurrencies have the potential to effectively take the real estate behemoth and spread it out over a much wider investment base.

Under the old regime, it took serious capital to invest in real estate. You might need a small loan of a million dollars from your father, as President Donald Trump once famously said about his rags-to-riches story. If you couldn’t raise the necessary capital, you could pool your resources in an arrangement like a timeshare. That brought a whole new suite of entanglements, with the timeshare management company nestled right in the heart of it.

CrowdVilla, an REIDAO project and partner of REX, is taking direct aim at the old timeshare model. The company aims to use the proceeds from its initial public offering to purchase vacation rentals, which can then be used with the company’s CRV tokens. It’s a timeshare without the strings.

“CrowdVilla enables true sharing of a global portfolio of hotels and holiday properties on the blockchain,” the company said. “Based on the concept of the common good, CrowdVilla enables the community to pool its resources and acquire properties together for shared use. The portfolio will occupy the casual luxury segment that has broad appeal to mobile businesses and holiday travelers.”

Several coins are targeting more traditional real estate investment, notably BitProperty with its REIT token. The token allows casual investors to own a digital share of physical real estate, complete with dividends.

Keeping It Real

The established real estate market isn’t going anywhere soon. That’s its biggest selling point. But innovations in blockchain technology are slowly chipping away at the foundation of the modern real estate system. The overall effect seems to be a flattening. Investors with casual amounts of cash can now own a chunk of real estate without involving banks or agents, and those same owners – large and small – can use their properties to generate wealth in an efficient and ongoing manner.

The day might soon come where billionaire real estate tycoons are a thing of the past, replaced largely by community co-ops or similar entities. There’s nothing technically stopping a local union, for example, from owning its physical factory without the complicated legal and financial morass that would normally entail. Nor is there any barrier to a casual real estate investor hopping into a major project alongside stately banks or dedicated investment firms.

In the words of college football teams across the nation – “Whose house? Our house.”

References

  1. https://hackernoon.com/how-the-blockchain-will-impact-your-industry-a6374d4c3aaf
  2. https://parkgene.io/
  3. https://bitcoinj.github.io/working-with-micropayments
  4. https://www.ccn.com/russia-allows-cryptocurrency-payments-for-hotels-during-fifa-world-cup-2018/
  5. https://bitcoinexchangeguide.com/lockchain/
  6. https://steemit.com/cryptocurrency/@markjackson1989/these-3-cryptocurrencies-could-change-how-we-look-at-real-estate
  7. https://www.inman.com/2018/02/12/property-coin-cryptocurrency-real-estate/
  8. https://btptoken.io/en/


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Posted by Oliver Dale

Editor-in-Chief of Blockonomi and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all.


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