Blockchain Technology - Coming Soon To Commerical Real Estate
Updated: Jun 15, 2018
“Blockchain” is a relatively new word in our commercial real estate vocabulary referring to a new technology that you can expect to be reading more about in the months ahead. It is not the same as “supply chain” that has become a buzz word in recent years in our industrial real estate world. Whereas “supply chain” refers to “the linking and interchanges from the acquisition of raw materials to delivery of the finished products to the end user”, blockchain is a technology with numerous applications, ranging from bitcoin and cryptocurrency to its possible usage in commercial real estate transactions. It was invented by Satoshi Nakamoto in 2008 for use in the cryptocurrency bitcoin as its public transaction ledger.
The internet offers numerous articles written about blockchain, as its benefits and applications in commercial real estate are continually being studied. The term typically refers to the transparent and publicly accessible ledger that allows us to securely transfer the ownership of units of value using public key encryption and proof of work methods. From purchasing to leasing to management, blockchain technology compiles records of transactions into systems called blocks, which are linked and secured using cryptography. The benefits include streamlining certain business processes, reducing fraud and cutting costs. By design, a blockchain is inherently resistant to modification of the data.
More is being written about blockchain and its possible uses in commercial real estate than I have time to write about here. Suffice it to say that in a blockchain world, this innovative technology will allow every property to have its own identity, so previous owners of the property, inspections and records and landlord information would be fully disclosed. Basically, it is reducing the number of people involved in this process of obtaining information. Paperwork is reduced and processing fees are reduced. Encrypted information can be secured on a blockchain and can easily be authenticated.
Still want to know more? Try visiting The International Blockchain Real Estate Association (IBREA) (www.ibrcrea.org), which currently has over 4,400 members around the world dedicated to the goal of implementing blockchain in real estate. Click on the following links to read more about this relatively new technology.