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Blockchain and Commercial Real Estate

Bitcoin and Blockchain, Real Property

Blockchain technology is becoming more accessible to the general population through the real estate industry. The use of blockchain, and its ledger, will help real estate investments through some of their major drawbacks. Brokers and agents end up taking up to six percent of the total payment made on the transaction. When home owners sell their homes, it ends up that a fairly costly chunk of money goes towards paying off their broker’s fees. “A blockchain is an immutable ledger in which transaction data can be recorded. Its benefits include transparency, traceability, accessibility, and enhanced security. When implemented in the real estate industry, these properties can solve its major issues.”[1] Through the implementation of this platform, the external costs of buying a house are negated. The platform, “provid[es] a means of property verification and payment to buyers.”[2] The transaction goes through a makeshift online marketplace that is both safe and profitable for both buyer and seller. Because the blockchain technology is transparent in ownership, it easily provides authentication of the property.

Another attractive feature of using blockchain is that “those who cannot afford to purchase the whole property can simply buy a part of it.”[3] Real estate becomes similar to stocks, in that parts of the property can be owned many. This would allow for people in different socioeconomic levels to have the opportunity to own property. “Several companies are working to bring these solutions to the commercial real estate industry. One such company is i-House.com, which implemented a series of ATO (Asset Tokenization Offering) projects in less than a one-year span. These projects allow users to crowdfund real estate development projects using IHT, the company’s cryptocurrency.”[4]

The future is coming at us fast, and now it depends on how quick people are ready to implement these changes into their lives. Transactions are becoming more and more digitalized, which helps solve many of the current problems in real estate. I-House.com Chairman and Founder, Ricky Ng, says that companies like “i-House ATO provide real estate owners, developers, and end users the means to own and share assets easily.”[5] As complicated as blockchain may seem to some, it has the potential to simplify and reduce the costs in real estate transactions.

[1] Agoni, H. (2018, November), Blockchain Set to Change the Face of Commercial Real Estate As We Know It. Retrieved from The Cointelegraph https://cointelegraph.com/news/blockchain-set-to-change-the-face-of-commercial-real-estate-as-we-know-it Accessed on November 13, 2018

[2] Ib.

[3] Ib.

[4] Ib.

[5] Ib.

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