What is blockchain technology?
Blockchain technology is the newest addition to the digital world. With innovation comes confusion as consumers attempt to figure out the latest technology and how it will impact them directly. One way is through the real estate market.
Before diving into the interlocking of blockchain and real estate, let’s define what blockchain technology is.
Blockchain technology, also known as cryptocurrency, non-fungible tokens, or NFTs, is a form of digital transaction. The technology opens the door to dealing consumer to consumer without needing a third party.
Blockchain technology’s impact on real estate
The transformation of digital transactions is making its way into new industries while taking a cue from an established presence in the art world through both tangible and intangible assets. The adoption of blockchain technology in the real estate realm is slow-moving but will eventually be prominent in property transactions.
In addition, blockchain technology proves secure as the system limits the possibility of hacks, thus protecting sensitive information.
What will change with the implementation of blockchain technology?
As panic ensues from implementing new technology, Realtors® shouldn’t worry, as blockchain technology will aid the home buying process.
The following are the main areas where blockchain technology could affect the real estate industry.
One of the most significant areas for technology enhancement is automated transactions. This process will simplify time delays, security risks, and consultations. It will also help speed up the buying process while keeping customer information protected as the transfer occurs.
Blockchain also can act as a reference for the complete history of the property without needing to go through a third party to obtain access.
Smart contracts are programs stored on a blockchain and run based on pre-established conditions. Implementing a digital contract will minimize the margin of error through false interpretation while speeding up the process through automation. A smart contract will serve as a new and improved paper contract.
Buying and Selling
The rise of cryptocurrencies could result in a futuristic purchase method. Many companies already allow customers to purchase goods using digital currency — home buying and selling will likely follow suit and use crypto in future transactions. The rise of crypto-transactions could also cause a rise in “For Sale By Owner” transactions.
What to expect from blockchain technology in the coming years
Blockchain technology is slowly making its way into relevant industries. The digital upgrade will likely open the real estate market to more investors, making the market more competitive. Title insurance may also change if the blockchain implementation proves successful. Ultimately, as with all technology, blockchain will be trial and error until it becomes routine.
As real estate professionals and consumers alike grapple with the change in currency, it is best to remember that this update is gradual. A real estate professional will have first-hand knowledge of the latest changes and can help answer any questions.
Melody Smith and Associates is a longtime leading broker associate in South Orange County, known for super service, and is in the top 1% of 1% of agents in the country. Please contact us for all of your real estate needs. 949-401-7033.