Blockchain is being explored as a technology that can alter supply chains and create added reliability. You can visit the official trading platform to access the best trading strategies, bots, and tools, to polish your trading skills. Industries from healthcare and pharmaceuticals to shipping are eyeing Blockchain to avoid fraud, increase data security, reduce costs, and increase efficiency. In the below-mentioned portion, we explore how real estate is already being tokenized with the help of Blockchain.
Applications of Blockchain in real estate:
Smart contract-driven tokens:
Intelligent contracts are tampered-resistant and allow you to embed contract rules that the participants can’t break. For example, intelligent contract-enabled tokens will change real estate from where buyers bid on a house to where their identity is verified, digitally signed off on the documents, and automatically billed via intelligent contract each month.
You don’t need to do traditional title searches anymore, notaries will become obsolete, and you must babysit your portfolio remotely. Nasdaq’s Linq platform uses this intelligent contract technology so deals can be done faster and cheaper than through a bank or lawyer.
Real Estate tokenization:
The real estate industry is a 250 Trillion dollar sector, which means there are plenty of possible uses for real estate tokenization. Let’s look at how Blockchain can change how real estate is bought, sold, and owned.
Real Estate Smart Contracts:
The innovative contract technology that people can use to tokenize any asset also works for buying and selling real estate. Real Estate Crowdfunding platforms now accept hundreds of tokens as payment. These digital tokens represent fractional property ownership through smart contracts, which provide immutability of title. The entire process reduces costs, fees, and intermediaries (no broker fee or mortgage person is involved in this digital process).
Real Estate-backed security tokens:
The tokenization of assets is not a new concept; however, it has only been recently that the concept has become viable enough to be used on a large scale. Security token offerings (STO) help re-monitor illiquid assets through blockchain technologies by trading shares and equity in real estate developments and other investment opportunities.
Tokenization on Blockchain allows it to keep proof of ownership at its owner’s fingertips. In addition, real estate businesses can digitize their transactions, points of sale and customer records on the Blockchain for increased reliability, efficiency and trust among all parties involved. It also improves data security by eliminating paper trails that attract thieves.
A landlord and tenant can choose to use their smart contracts to establish the tenancy agreement without a court. Intelligent contracts are less expensive and time-consuming than traditional court systems. It allows for quick resolution of disputes and eliminates paperwork in real estate.
Real estate is decentralized:
The blockchain revolution is decentralizing everything that used to be centralized. For example, organizations like Consensys are developing Ethereum blockchain solutions for real estate using Ethereum’s coding language and innovative contract technology. It will allow buyers, sellers, managers, and tenants to take advantage of all the benefits of blockchain technology without going through a third-party intermediary like a bank.
Tokenization in Real Estate: Benefits:
1. Liquidity Booster:
The tokenization in the real estate industry will elevate liquidity to a new level. Using smart contracts to transfer real estate ownership makes a seller less likely to walk away with the money because they can’t find someone with double the value. In addition, it opens real estate markets up to individuals who wouldn’t have otherwise been able to purchase the property.
2. Transparency enhancement:
No need to create new paper records when everything is recorded on the Blockchain. Buyers and sellers can use this transparency to negotiate on the spot and with lawyers and regulatory authorities.
3. Real Property Deed:
This authentic property token can be sold or exchanged without going through a third party like a bank, government, or title company. You can exchange your deed token for the equivalent amount of gold bullion if that’s what you want.
4. Payer-payee integration:
The real estate industry is notorious for waiting years for payments, yet it only takes seconds with tokenization technology. The transaction occurs instantaneously, and the money is deposited automatically in the seller’s bank account.
5. Tokenization of assets:
In tokenized real estate, mortgages, title certificates and deeds are shared between all parties involved in a real estate deal. It means clean and transparent information about the property is available to all parties involved, and scopes of data availability can be improved by people using blockchain technology.
Tokenizing assets will reduce costs and increase efficiency, transparency and trust among all parties involved while creating a more efficient market where people can purchase property without needing to go through lawyers or banks. Security tokens will also allow individuals to access real estate ownership without needing a big bank loan.