Real Estate Blockchain Apps: Benefits
and Use Cases
In the context of the real estate industry, there are several possible uses for the block chain along the entire property value chain.
Transfer of Purchase Price: Tokenization
Traditionally, only the wealthy could afford hard assets such as real estate and wait years to liquidate it. That changes with tokenization.
Tokenization democratizes ownership of assets by using cryptocurrency to split assets into tokens that are stored on the blockchain. Someone who wants to invest in a trophy real estate project now can resell their share on the open market through secondary trading. Also, people in different geographies and tax brackets can buy property that was erstwhile inaccessible. Landlords now have the ability to sell off just a portion of their property to the crowd. In 2019, I believe we will see a major migration of real estate ownership moving to the blockchain.
Traditional Contracts turned into Smart Contracts
In residential real estate, for example, a landlord and tenant could digitally sign a smart contract agreement that includes information such as rental value, payment frequency and details of both the tenant and property.
Based on the agreed upon terms, the smart contract could automatically initiate lease payments from the tenant to the landlord, as well as to any contractors that perform periodic maintenance. Upon termination of the lease, the smart contract could also be set to automatically send payment of the security deposit back to the tenant.
This allows traditional contracts, such as mortgage agreements and tenancy contracts, to be brought onto a blockchain to establish a history of agreements and financial transactions that can be traced and audited.
Benefits of Smart Contracts
Tax and Customs
Payments, royalties and licensing
Records and Contract management
Audit and Compliance
There are several projects promising tokenization and transaction services. However, in order to reach that potential, there are certain steps that need to happen and the first is connecting the physical real estate world to the digital world.
Blockchain apps gives us the ability to do it in a safe, accurate and secure way. Blockchain’s impact will be an unparalleled paradigm shift for the real estate industry going forward.
Comprehensive Blockchain Glossary
Document Signing with the use of Blockchain Technology
Benefits & Use Cases of Real Estate Blockchain Apps
Redefining Blockchain Security
Blockchain in Real Estate
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Blockchain in Education
blockchain in IoT
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