Blockchain technology is revolutionizing how we do business and how we finance things.

The future of housing is here, but how does blockchain improve such a massive industry?

With blockchain, property ownership could be shared in a way that does not involve a single point of failure or control. A property could be owned by anyone with the proper security measures and could be bought, sold, and traded in a variety of ways.

Property ownership is thought to be universally accessible with the help of blockchain technology. We will not have to rely on a centralized system that is vulnerable to hacking, fraud, and major restrictions. The activity in the real estate market can be transparent and safe with the use of this technology.

Let’s look at what blockchain technology is and why it is important before we discuss how it will change property ownership.

What is Blockchain Technology?

The term “blockchain” was first introduced in 2008 by Satoshi Nakamoto, a pseudonym for the anonymous creator of Bitcoin. At the time, the technology was designed to record and verify all Bitcoin transactions using a public ledger. Since then, Bitcoin and other cryptocurrencies have led to the development of new applications based on blockchain technology.

A blockchain is a collection of data in the form of blocks that are linked together.

Each block contains fixed information, meaning that it is permanent and cannot be changed once created. Bitcoin technology is decentralized, meaning that it’s not subject to singular interference, government or financial institution control.

Blockchain data is stored on a database that is distributed among all participants of the network. There is a copy of the fixed data located in many locations. There are thousands of copies of this information that can be found in a single blockchain.

Blockchain technology can be used in many ways, including for crowdfunding, asset-backed management, logistics, microfinance, and real estate.

The Future of Housing: How Can Blockchain Improve the Real Estate Process?

Real estate is a huge business and with a value of over $10 trillion, it’s one of the largest industries in the world. But this industry also has some serious challenges to overcome, including fraud, lack of transparency, and high transaction costs.

Real Estate Fraud

Real Estate Fraud is a very complex issue that is unfortunately on the rise. It’s not an easy issue to figure out because there are many different forms of fraud that can be committed.

The most common form of real estate fraud is when a property is misrepresented as being in better condition than it actually is. Another common form of real estate fraud is when a real estate agent or seller tricks a buyer into thinking they are getting a better deal than they actually are.

Blockchain technology can help resolve real estate fraud by securely recording and tracking the data of a property. Due to the fact that the information can’t be changed, it can be used to identify and stop misrepresented information from being shared in order to prevent any damage that may be caused as a result.

Lack of Transparency

Real estate transparency is the practice of making information public about property and the transactions involved in the real estate market. Some information such as sale price, mortgages issued, and ownership names are already made public, but other information, like appraised value, inspection reports, and violations of property are not. This raises the question of how much information is truly transparent and what information should the public be aware of.

It’s possible to make real estate more transparent with the use of this technology. Each property will have a public and private unique identification that is associated with the blockchain. The public can have access to transactional data of a property, including recent sale price, appraisal and inspection reports, violations on taxes and permits, and other data deemed important by the public through this unique identification. The public will also have access to data on a property’s history and current condition.

The High Costs of Real Estate Transactions

Real estate transactions can be expensive, depending on the location, size, and condition of the property. According to most, it takes between 1 percent and 1.5 percent of a property’s sale price to cover closing costs. These costs include things such as title insurance, attorney fees, and other closing expenses.

According to most, it takes between 1 percent and 1.5 percent of a property’s sale price to cover closing costs.

A growing number of homeowners are concerned about paying a real estate broker. When a broker is involved in a real estate transaction, the cost of selling property increases by 4 to 8 percent of the home’s sale price. With the latest developments in technology, many homeowners are wondering if the convenience of a broker is worth the cost.

Brokers are very helpful in facilitating a real estate transaction. For example, a broker can craft a marketing story with the market value of the property to potentially yield a higher sale price. Data can be easier to understand if a broker advises on the dynamics of the market. A  broker is also able to deliver an exceptional experience to buyers that may not be possible with technology. While a broker allows for convenience during a transaction, blockchain technology will make it possible to market property with accuracy, including details about recent inspections, repairs, and valuation.

In the very near future, buyers and sellers will be able to easily access transparent and untainted information with the use of blockchain. Homeowners will be able to get pertinent housing data at a fraction of the cost, which will make transactions far more efficient.

The Future of Housing: Leveraging Blockchain to Improve Smart Home Technology (IoT)

Smart home technology is a collection of technologies that are designed to make one’s life easier. These technologies can include things like smart locks, smart thermostats, and smart home security systems. They can also include things like smart appliances and smart lighting.

It will be simpler for people to control their smart home devices and data with the help of blockchain. The sharing of data between devices and members becomes easier and safer with this technology because it helps devices communicate with each other more securely. It further limits the possibilities of a wireless-enabled hack due to the fact that the technology requires a hacker to connect to numerous physical devices (blocks) at the same time.

The Future of Housing: Leveraging Blockchain to Finance a Property

Cryptocurrency, as most people know it, is a way of making payments for goods and services without the use of banks or credit cards. Bitcoin and the hundreds of other cryptocurrencies out there are based on a blockchain, which keeps track of every transaction made.

There are a few different options available to finance a property using technology. One option is to use a crypto-backed mortgage. As the name suggests, a mortgage backed by cryptocurrency is where the borrower uses crypto as collateral for a loan.

Another option is tokenizing real estate. Tokenizing real estate is a type of ownership in which a person owns a portion of a property, rather than the entirety. This type of ownership is supported by many real estate investors and allows individuals to purchase and manage a property collectively. RealT, a Miami-based company, and platform evaluated the concept and found it to be very successful.

How to Get Started in Blockchain?

There is no one-size-fits-all answer to this question, as the best way to get started in blockchain depends on one’s level of expertise and experience. However, some helpful tips include reading online resources, joining online communities, and participating in introductory workshops.

What Does the Future of Blockchain Real Estate Look Like?

Tracking and verification of the authenticity of property deeds are one of the things that could be done in the future using blockchain in the real estate industry. Additionally, it may be used to alert owners about the health of the home. Information produced using this technology will better equip our economy in detecting whether we are entering a housing bubble. When assessing the future, it is fact that blockchain technology has evolved and many more possibilities will arise.