The technology has major implications for Commercial Real Estate
Chances are you know someone mining or trading bitcoin and they are happy to tell you all about it and how it’s the future.
This post won’t be doing that.
We do want to talk about blockchain though – the system that manages exchanges of cryptocurrencies. It does have the potential to revolutionize how we conduct transactions in Commercial Real Estate and, in fact, it’s already making waves. Understanding this emerging technology, and how it applies in CRE, can help you get ahead of the game.
What is Blockchain?
The simplest definition is that it is a digital ledger that records and verifies transactions that are made. You can use blockchain to transfer money without using a third party (such as a financial institution).
To make an analogy: if you and a friend are in front of an audience of 1,000 people and publicly declare that you are trading your home for hers, you then have a thousand witnesses that the transaction was made. Even if ten people give differing statements, there are still 990 that have a record of what actually happened.
Like the audience of witnesses, blockchain is a network of computers that keep the same record of a transaction. Further, as each individual record is encrypted, blockchain is virtually hack-proof.
Blockchain and CRE
Blockchain has enormous potential in commercial real estate, and it’s already being used in some applications. Looking down the road, it can help CREs create smart contracts, which will make contracts, escrows and property records completed and money distributed more efficiently and securely than it is today.
The technology can also potentially be used to record titles, deeds, purchases, or sales. In the not-too-distant future, CRE investors may even be able to purchase properties and complete the sales online, similar to how purchases on e-commerce sites are made.
Blockchain has universal application in just about any area where there is an agreement or record. The technology can record, encrypt and protect the information.
As blockchain becomes more widely known and adopted, don’t be surprised to see it become a part of day-to-day operations in CRE.
At RealMassive, we’re always looking at what’s coming down the pike in Commercial Real Estate. To find out more about our CRE marketplace that’s always free to list and search, visit: www.realmassive.com