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Blockchain for Real Estate and Cryptocurrency Explained
Any change in technology or the development of new technological processes that can improve the efficiency, transparency, and productivity is alwayswelcome.
One such change has happened as the Internet was exploding in our life. The range of options itprovided to any individual is simply overwhelming.
Just like the changeof business from traditional method to online platform improved the efficiency and speed of doing business, there are few other technologies that will revolutionist the online transaction even further.
Among a range of technologies that are introduced to improve online business, one that stands out thanks to its reach, security, ease of use, and effectiveness is the real estate block chain solutions.
You need to understand that the block chain solution is very different from the traditional buy and sell process in the real estate sector.
While the nature of buying and selling relation among property dealers and buyers remain the same, what block chain in real estate does is remove the intermediates.
This will not only make the transaction faster but also cheaper as you don’t have to pay for the services that are rendered by middlemen who are essential (in the traditional process) to make any business deal in the real estate.
In this article, we will go to explain to you in detail how block chain can become one of the most effective real estate solutions.
However, we must start at the beginning to first understand what is a block chain and how to use it.
What is a block chain?
The block chain is a digital ledger where every transaction made in bitcoin, or any other concurrency is recorded chronologically and publicly.
To explain this concept further, you can imagine that block chain is actually a series of computers that record any transaction in bitcoins in a ledger, which is open to the public.
Each of these records is heavily encrypted and the ledger is secured in such a way that it is hack proof.
As all the computers in a block chain record the same transaction, it is easy to prove whether a particular transaction is valid or not.
The amazing thing about using block chain is that it allows more than 2 people to transact business online without the help of any middlemen.
Why bitcoin is so important part of block chain?
While the block chain is a platform that allows two or more than two people to transact business, Bitcoin,on the other hand, can be described as the application part of that process.
In the block chain,the entire transaction is digital in nature and all the records are placed in the public domain. Therefore, in place of traditional transfer of money through the banking channel, people use cry to currencies.
You have to buy bitcoin (or any other concurrency) with cash online and then transfer the ownership of the bitcoins to the seller when you get ownership of the title of the property.
As there is numerous witness to this transfer of ownership, it is considered as legal and valid.
The individual to whom the bitcoin is transferred can then transfer the ownership of the bitcoin to another person or he/she can encase it through the regular banking channels.
Therefore, you need to understand that bitcoin is not a physical entity, but a digital token that you have to either purchase through cash or have the ownership transferred to you by selling a product or services.
In short, using bitcoin for any kind of commercial transaction is just like transaction using cash. The only difference is that you have to buy the bitcoin and use it to make secure online transactions.
Application of bitcoin in the real estate sector
As explained above, bitcoin is very secure that allows you to transact business online.
If you want to buy or sell your property, then you can choose the block chain to make a faster, cheaper, and more secure transaction.
Some of the factors that make currencies like bitcoin so amazing are discussed below for your ready reference.
How block chain can be used in the real estate?
It speeds up the process
In any real estate transaction, you will need the help of few intermediaries like lawyers, brokers, notary official, and so on.
The advantage of using the block chain is that cuts through all the red tape and you can connect directly with the buyer/seller.
In the traditional method, information is segregated among various officials, which are not easily accessible to the buyer.
As this information’s not available to the public at large, the buyer/seller has to take the services of intermediaries (for which they have to pay) to complete the transaction.
However, when you use the block chain process by some property, then all the information is available in the public domain.
For example, in the traditional method, if you have to buy property, then you have to fill out several forms and get the deed, notarized. This is a painfully slow process where you will require the services of various officials.
However, in the real estate smart solutions, you can create a digital title and transfer ownership of the property by sending that digital title to the buyer.
This process helps the buyer to check the title on his/her own without taking the help of any intermediaries.
This process not only speeds up the transaction but also makes it cheaper as you do not have to pay for the services of the intermediaries like lawyers, brokers on notary officials.
Block chain in real estate will help reduce fraud
Block chain can reduce fraud in any real estate transaction as it is more transparent, and all the information is available in the public domain, which can be verified easily.
One of the greatest advantages of using the real estate block chain solutions is the fact that the buyer can safeguard his/her interest by not entering into any fraudulent commercial dealing.
In the traditional method, fraudsters can use forged documents to sell a property illegally and thereby defrauding the buyer.
However, if you use block chain in real estate, then the chances of committing a fraud is almost negligible.
In block chain for real estate, the proof of ownership, the proof of commercial transaction and the proof of existence is all out public domain, which can be verified more accurately.
In the block chain transaction, people use digital proof compared to the paper proof. Moreover, as these digital proofs are highly encrypted, it is very difficult to fake them.
While using block chain, the owner of the property has to upload the title documentation of the land/flat to the block chain network.
As the process is highly decentralized, it is next to impossible to hack the system and fake the documents to make any fraudulent commercial transaction.
It allows you to use Smart contracts to complete the process
Any transaction related to buying or selling of properties, it takes an inordinate amount of time as the entire process is very slow and you have to navigate through multiple officials to legalese the transaction.
However, if you invest in real estate smart solutions by using smart contracts, then you can make the process much simpler and faster.
One thing you should know that creating a smart contract is not a job for the nonprofessional, you will need the help of experts who specialist in this field and know how to use the block chain to create smart contracts.
Through the block chain process, you can easily create a digital ID for the buyer and the seller. This will be a great help in the seamless transfer of property ownership from one person to another without any major hassle that you face when you use that traditional method.
Another advantage of using smart contract is that you can track the transaction process in real-time, and once the transaction is completed and the ownership is transferred, then the entire record is stored in the block chain network.
Once the record is made, it becomes permanent and it cannot be changed, reversed or tampered.
These advantages make block chain in the real estate so effective and useful.
Therefore, if the block chain technology in real estate has to grow further and became the new normal, then a lot of work needs to be done.
All the land record has to be digitized and a greater awareness campaign has to be launched among property buyers so that they recognize the advantages of using block chain for commercial transactions relating to real estate.
All this will take a lot of time and sustained the effort. In the coming years as technology changes, block chain will become more efficient, secure, and easy to understand and it will turn mainstream.
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