Blockchain has been a hot topic in the real estate industry ever since blockchain technology started producing tons of altcoins that were meant to change every imaginable niche.
That mood now cooled off with the onset of the recession, although I hope it’s not an ideological crime to call it that.
Some people believe that blockchain will eventually replace real estate agents, while others think that blockchain will simply change the way that real estate transactions are conducted.
So what uses can blockchain have in the future of the real estate industry?
What are the benefits of using blockchain in real estate?
The use of blockchain technology in any industry is still in its early stages, but there are a couple of ways that in which blockchain can already be used.
It’s nothing high-tech, however: At the moment, you could realistically use cryptocurrencies only as a means of payment.
Still, if used correctly, it does improve the process of buying and selling property.
Some of the benefits of using blockchain in real estate include:
- Increased transparency: Signing an address with a random string is a super simple way to prove to the selling party that you have the means to cover the amount.
- Reduced costs, especially for cross-border transactions: When you buy property in a country where you don’t have a bank account, usually that transfer gets rather expensive. You will almost certainly need to pay a fee for transfer in a foreign currency. On top of that, some countries also impose a tax on transactions coming from abroad.
- Credit report without credit report: On public blockchains, it is trivial to verify how long a coin resided on a specific address. If a buyer comes with an address that has held coins for years, it can be taken as a proof of good financial standing of the buyer.
Can blockchain completely eliminate the need for real estate agents?
While it is still too early to say whether blockchain technology will have a role in the future of real estate, it is quite certain that blockchain will never completely eliminate the need for real estate agents.
Blockchain has the potential to significantly change the way that real estate transactions are conducted, but only as far as the back office side of real estate is concerned.
Blockchain is just a system for storing data or a system for computing data, but real estate agents are sales people who are experts on the neighborhoods of their city. Blockchain does not have what it takes to recommend a good neighborhood fit for you, or to sell your property at a good price pre-market.
Artificial intelligence could maybe one day do that, but even that is far fetched. Either way, blockchain simply does not have what it takes to eliminate real estate agents.
Will blockchain eventually replace real estate agents? Almost certainly not, but there are a number of ways that blockchain could be used to improve the process of buying and selling property.
Some of the benefits of using blockchain in real estate include: increased security and transparency, reduced costs, and faster transactions. There are also some risks associated with using blockchain in real estate, including fraud and privacy issues.
While it is still too early to say whether or not blockchain will completely eliminate the need for real estate agents, it is clear that it has the potential to significantly change the way that real estate transactions are conducted.