Buying real estate isn’t like buying an equivalent value in shares in the stock market. It isn’t even like buying a car.
The real estate industry is one shrouded with secrets - primarily to keep competitive advantages. Technology has brought greater transparency to most industries, and has closed the gap between buyers and sellers. As it relates to real estate, blockchain is at the forefront of these solutions, potentially disrupting all property transactions.
Benefits for using Blockchain:
1. Shared Database
A shared database is crucial to leasing, purchase and sale transactions, and results in transparent, efficient and accurate information. This reduces the risk of manipulation and fraud.
E.g. a multiple listing service could be used to aggregate property-level information from private databases of brokers and agents.
2. Multiple Entities Can Modify Information
Blockchain provides a common database where transactions can occur, with multiple users able to modify and verify information. Multiple entities, such as owners, tenants, operators, lenders, investors and service providers, can provide, access and modify transaction information.
3. Streamlined Due Diligence Process
Entities in leasing, purchase and sale transactions may have strict due diligence processes and may have concerns for data integrity between parties. Blockchain uses encryption techniques to verify users and transactions with a digital identity, such that trust between parties is not required. This benefits the process of real estate titles, entitlement, liens, financing, tenancy and more.
4. Removal of Intermediaries
Because of the increased transparency and security of blockchain, trusted intermediaries can be removed. For example, in the case of title companies, blockchain allows transparency in title management, and automatic confirmation by government land registries.
5. “Smart” Contracts
“Smart” contracts are lines of code that give instructions in the blockchain to fulfill transactions. Using smart contracts, transactions can be settled automatically and immediately after requirements are fulfilled for example, in real estate transactions, conditional clauses can be executed automatically, such as purchase-sale transaction after loan approvals or title clearances.
Increase Your Real Estate Data Transparency with DreamBlock
Envision your business to have a clear, efficient and expected process and paperwork.
Those are some of the benefits of using blockchain for the commercial real estate industry. DreamBlock expedites deals and is a faster and more effective way to contract the management process.
Clear - Blockchain enables transparency of data because of its decentralized nature, increasing accountability and cultivating a productive business environment. The availability and quality of information from prices to ownership is crucial in making real estate investment and management decisions. DreamBlock is especially useful in this manner, as clear data is necessary for a company expanding into new markets and
allocates increasingly more capital.
Efficient - Contracts can be created, authenticated and audited globally and in real-time, without an intermediary - saving time and resources. Furthermore, every part of a lease or sale agreement can be automated, and payments can be received instantly at any time. Blockchain also benefits the pre-lease due diligence process by issuing personal digital keys, which helps verify identities, speeds up the background check and reduces fraud.
Expected - Transactions are only fulfilled if all instructions have been completed, providing complete transparency and expected results to all parties, reducing the likelihood of payment disputes.
Book a trial to learn more about how you can use DreamBlock to bring transparency to your business operations: CLICK HERE.
In spite of their recent rise to fame, few people actually understand the difference between “blockchain” and “cryptocurrency”.
To think of “blockchain” and “cryptocurrency” as the same thing is like saying… that a factory is equivalent to one piece of machinery. That simply is untrue.
Blockchain =/= Cryptocurrency
A simple analogy to help explain this concept:
You have a spreadsheet. Specifically, a shared ‘Google Sheet’ where multiple users can access and observe it. The catch? There are rules.
- There can only be additions to the spreadsheets. No changes or deletions allowed.
- Additions have to be verified.
- No one has full control of the spreadsheet (since it’s “shared,” remember?).
These are the rules that keeps blockchain secure. Every piece of information handled by blockchain technology is “locked-in” or “chained together” (Rule 1) and encrypted (Rule 2).
In-line with our analogy where a spreadsheet is capable of handling various types of functions from doing simple calculations to handling financial statements, blockchain technology has many uses too.
Blockchain: A distributed ledger of all transactions across a network, using encryption techniques, which allows participants to confirm transactions without a central clearing authority. The benefits of using this technology are increased (1) transparency, (2) accurate tracking, (3) permanent records and (4) cost reductions.
Cryptocurrency: A medium of exchange in the blockchain. Cryptocurrencies offers one way of maintaining the blockchain network, by incentivizing people called “miners” who get rewarded in cryptocurrency coins for verifying transactions and updating the blockchain. Blockchains can be sustained without cryptocurrencies if the network provides more benefit than the cost of running the network, in terms of computing power and server usage.
Blockchain as a Service (BaaS) - The DreamBlock system makes investing in real estate assets easier, faster, and cheaper. We do this by using blockchain technology to minimize transaction costs. Learn about how we cut-off the “middle-man” and give users unparalleled transparency here.