Blockchain technology will add transparency and open massive opportunities in the real estate industry.
FREMONT, CA: Proptech is a sector with a massive scope of disruptions and innovations. Blockchain has a reputation for triggering innovations in an industry. Thus, it’s not a surprise that blockchain is set to change proptech in more than one way. According to experts, Blockchain is the next revolution in the proptech sector. Blockchain will minimize the dependencies on intermediaries involved in the real estate.
Further, blockchain will encourage the idea of the tokenization of assets in real estate. An individual who wishes to own a property need not deal with a number of mediators who charge for the services. Thus, a potential customer is freed from having to invest an inflated amount that can be avoided by buying the property directly, without the need of a third party. Blockchain addresses the above issue. For instance, lawyers involved at the multiple stages of real estate transactions can be removed by the integrity and transparency of the blockchain.
Further, blockchain will mean faster transactions and lower costs for the remaining stakeholders. Blockchain is also an efficient way to minimize risks such as fraud. The electronic recording system is highly transparent and eliminates the hassles of paperwork. Thus, the blockchain transaction not only reduces the risk of fraudulent activities but also minimizes expenses. Another major disruption with the incorporation of blockchain in proptech will occur with tokenization. Tokenization in real estate is the means of digitizing assets into tokens, or digital representation. In simpler terms, tokenization results in splitting the value of a property into small pieces. Owners can sell the tokens if they want to liquidate some of their capital.
On the other hand, anyone who cannot afford the whole property can also have a share of the property. Tokenization can also be considered as a way to finance real estate. The ability to create tokens and digitization of the assets expands the investor pool. Thus, there is a huge potential underlying blockchain incorporation in proptech. As the technology garners trust among the investors and the leaders, blockchain will steadily evolve the proptech processes in the future.
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