4 ways blockchain is revolutionizing the real estate industry
Since blockchain’s conception more than a decade ago, we have seen it grow from a mysterious, foreign technology to a burgeoning industry disruptor, now changing the way business is done in healthcare, supply chain, and everywhere in between.
Real estate has seen its fair share of blockchain innovation, as well, which is especially noteworthy for a global industry expected to grow to $3.7 trillion by 2025.
In a space that has always been characterized by face-to-face interactions and long, drawn-out transaction processes, blockchain is offering a modernized way forward – while also lowering the barrier to entry in a space once dominated by wealthy individuals and large corporations.
Where meeting with realtors and lawyers to view properties and sign closing papers has always been the norm, blockchain is shifting to tokenize real estate assets to provide advantages for both property owners and investors.
Here are some of the primary ways blockchain technology is reshaping the real estate industry through its transparent, decentralized nature.
Bringing real estate transactions online
Traditionally, technology in the real estate space has been used almost exclusively to connect buyers with sellers so they can then facilitate further virtual or in-person communication to carry out the process.
Blockchain makes it possible for parties to carry out entire transactions via online platforms, whether buying, selling, or leasing. The tokenization of real estate assets allows properties to be acquired and traded from anywhere, with smart contracts designed to keep the process moving once desired actions have taken place.
Within a smart contract, a buyer can make an offer or deposit toward a property which will then automatically inform the seller and streamline next steps (whether to move forward, decline, counteroffer, or take another action). The digitization of real estate transactions removes many of the industry’s most prevalent pain points, such as timelines, intermediaries, and fees.
Removing costly intermediaries
It is almost impossible to think about the real estate industry without immediately thinking of realtors, lawyers, and banks. Such intermediaries have always been relied on and deemed necessary to complete transactions in the most confident and secure way. But blockchain is making a big difference in how these roles are involved in the process.
Through blockchain, online platforms are able to facilitate property listings, transaction payments, legal documentation, and more. Not only does this reduce the need to rely on these intermediaries, but it also reduces the costs associated with them, such as brokerage fees, closing costs, and appraisals.
The efficiency of transaction timelines also stands to see an increase through blockchain, as the removal of middlemen can result in near real-time settlement to mitigate one of the industry’s leading frustrations.
Empowering fractional ownership
It has long required significant upfront funds to acquire property, which has made it difficult for smaller, independent investors to stake their claim within the industry. Blockchain is helping to lower the barrier to real estate investing, inviting a wider selection of newer players to get involved.
Blockchain makes it possible for investors to buy and sell fractions of tokenized assets, rather than requiring an all-or-nothing purchase. This empowers those smaller players to confidently enter the market, while also providing property owners with a larger pool of investors to partner with.
Fractional ownership also prevents the need of a sole party to manage a property themselves, which in turn leads to reduced maintenance and upkeep costs.
Enabling security and transparency
The most notable characteristic of blockchain technology is that it is decentralized. Information is stored on the blockchain and is accessible to everyone on the network, making it fully transparent and immutable.
This and the secure nature of decentralized networks delivers an unheard-of upside within the real estate space – an industry long plagued by a lack of transparency that has helped lead to catastrophic events like the housing crash of 2008.
By providing a single version of verified information sharable and viewable by all involved parties, blockchain enables more confident transacting on the parts of both buyers and seller.
Make the most of blockchain technology with Compute North
Blockchain represents a never-before-seen opportunity to foster transparency, efficiency, and confidence among real estate investors – and now is the right time to get involved.
Compute North owns and operates state-of-the-art colocation facilities designed to help you make the most of blockchain technology. We have pioneered the concept of the TIER 0TM data center – an innovative concept aimed at providing organizations with an alternative to the more expensive, more traditional solutions available both here in the U.S. and abroad. Each of our campuses is constructed in a strategic location across the U.S. to allow users to focus solely on ROI and less on logistics.
Our blockchain hosting services can allow you to:
- Reduce your CapEx while making your OpEx predictable and affordable
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TIER 0™ facilities offer an ideal solution for non-mission critical applications such as cryptocurrency mining, blockchain, image rendering, machine learning, and other edge computing applications where redundancy is built in and latency is not a key driver. We offer fully managed services to oversee all aspects of your operation with hands-on, professional support.
Benefits of our blockchain hosting services include:
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Contact us to learn more.