What is a blockchain and more importantly, how might it affect your real estate transactions?
Most people have heard of blockchain as it relates to digital currency, but the technology itself has unlimited potential uses. According to this article in the Wall Street Journal it will alter how we conduct commercial real estate deals. Whether or not it is the future that so many believe, it is worth having a basic understanding of the subject.
The blockchain is a decentralized network of nodes that creates an incorruptible data ledger. The digital information on a blockchain is shared and continuously reconciled while keeping the transaction history transparent and secure.
A ‘node’ is a computer attached to the network. ‘Decentralized’ means that the chain is not held in one place at any time. It is held on a network of many nodes, so that there is no one point of weakness or single entity that controls it, theoretically offering unprecedented security.
So, how may this affect you and your business?
Less Middlemen = Less FEES!
If you have ever purchased property, you have most likely paid for a title search and insurance. With blockchain technology, that need is eliminated. This is due to the fact that every piece of information related to that property will be part of its encrypted chain of history. These kinds of transactions are already occurring.
With the use of a smart contract, parties to a deal can execute a contract without the use of an attorney.
The most important advantage to blockchain tech is the transparency. For example, a friend recently bought a rocking chair online, once delivered it was exactly what it looked like in the pictures. Except for the fact that it was 3″ tall and clearly made for a barbie doll! With this technology, the life of the product is public, encrypted and time stamped into its chain. Including dimensions, time and place of manufacture, ingredients, etc. Elections, Identity theft, Data Privacy, Crowdfunding, etc. There is no end to what this technology could theoretically improve.
By: Amber Flowers, KW Commercial Raleigh