From the moment the first Bitcoin was mined, the potential of blockchain to transform almost any commercial market was manifest. A blockchain transformation in real estate was mooted five years ago, but at the time, the crypto market was so volatile that nobody had the courage or the inclination to push forward with it.
Adoption is happening
Mainstream crypto adoption was never going to happen overnight, and when Bitcoin celebrated its 10th birthday, cynics questioned whether it ever would. The point is, now that volatility is less extreme, mainstream adoption is closer.
To see the evidence of that, you need to look at specific sectors. 10 years ago, there were a few online crypto casino platforms around but they were mostly seen as interesting novelties. Today, the best online casino platforms are expected to accept Bitcoin payments as a matter of course.
The world of blackjack, roulette and jackpot slots might seem to occupy the opposite end of the economic spectrum to real estate, but it is the same basic drivers that are in operation.
Dedicated Platforms and Marketplaces
What does real estate technology really demand from technology? Up till now, it has been all about the listings that connect buyers and sellers. Yet that is only the initial preliminary step in a real estate transaction.
Blockchain brings completely new ways to trade real estate, and can provide an ecosystem for real estate trading platforms that support transactions from cradle to grave. For example, the ATLANT platform essentially tokenizes real estate assets, allowing them to be traded like stock on an exchange.
Eliminate the intermediaries
Dealing with the complex, diverse and mysterious demands of banks, lawyers and brokers is often the most stressful part of a real estate transaction. Could blockchain render them all obsolete? This report by Deloitte suggests it’s perfectly possible, and sooner than you might think. The net result is faster transactions, fewer costs and less stress.
Boost real estate liquidity
Real estate is conventionally considered about as illiquid an asset as you can get because, in simple terms, it takes time to convert it to cash in the bank – potentially months, depending on the type of real estate and the circumstances of its ownership. Now cryptocurrencies are highly liquid, you can trade them on exchanges and have cash in your hand in seconds. When real estate is tokenized, it is easier to trade, or at least to realize some value from its partial sale. This brings us neatly onto fractional ownership.
Allow fractional ownership
Fractional ownership through blockchain practically eliminates the traditional barrier to investing in real estate. Suddenly, investors don’t need five or six figure sums to invest. All they need is a trading app to buy and sell tokens, or fractions of tokens on exchanges.
Decentralization and transparency
Blockchain is built on an underlying ethos of trust and transparency. Put bluntly, these are qualities that have been conspicuous by their absence from the traditional real estate market.
Plenty of experts believe that it was purely greed and lack of transparency that precipitated the crash in 2008. A decentralized real estate exchange built on the blockchain would have trust built in and that can make all the difference.