Cryptocurrency has gained momentum as a new form of payment in many industries--a Miami penthouse was recently listed for 33 bitcoin (valued at the time of listing at $544,500). The system runs on blockchain technology, and many are now wondering if blockchain could transform the real estate industry.
Benny L. Kass explains the technology, and impact it could have on builders, for the Washington Post:
Blockchain is a shared, distributed ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible — a house, a car, cash, land — or intangible, like intellectual property, such as patents, copyrights, or branding. Virtually anything of value can be tracked and traded on a Blockchain network, reducing risk and cutting costs for all involved.
In 2016, Goldman-Sachs projected an annual $2 billion to $4 billion savings in the title insurance industry as a result of applying Blockchain to title examination. As discussed earlier, Vermont is in the forefront of trying to put title documents routinely in Blockchain, and the Swedish government recently started using Blockchain to register land and properties.
According to Lantmateriet — the Swedish land-ownership authority — land titles are already highly digitized and on a paperless system. However, despite the system, it still takes several months between signing a contract and finally registering a sale. With Blockchain, Swedish officials suggest, it could be just hours.
What are the potential real estate applications here in the United States? Clearly, it can be applied to buying and selling both commercial and residential real estate — and registration of ownership as is being developed in Sweden and Vermont. But any aspect of real estate which requires ledgers — such as property management — is also a prime candidate for Blockchain.Read More