Bitcoin and Real Estate

Blockchain technology has resulted in the creation of many kinds of cryptocurrencies. Bitcoin might be the most famous, but Ethereum and others are making names for themselves. It wasn’t that many years ago that Bitcoin mining seemed like a fringe thing, but blockchain tech and the resulting cryptocurrencies have seen expansive acceptance around the world. Consequently, they’ve disrupted many different industries.


Payments and remittances have certainly been impacted. So, too, has the forex sector. Initial coin offerings are now rivaling stock offerings for attention and capital. What you might not know is how blockchain technology is impacting the real estate industry.


One such way that blockchain is influencing real estate is by taking some of the human element out of it. The real estate industry has traditionally been very reliant on face-to-face interactions and personal meetings. Buyers are connected to sellers, or renters are connected to landlords.


Blockchain technology has allowed for the digitization of many properties. The financial ownership of a particular property might be tokenized so it can be traded just like a stock on an open market. The rental profits collected from a leased property can be paid as dividends to the various shareholders of that token.


The real estate industry has also had a long-time reliance on intermediaries between buyers and sellers, including agents, brokers, lawyers, and bankers. Blockchain technology can be applied to streamline and facilitate procedures and communications between buyers and sellers in a secure fashion. This means they can cut out the middlemen for faster transactions while keeping more of their money by not paying commissions and fees that used to be standard costs of doing business.


Some of the impact of blockchain technology on the real estate industry is very subtle but very significant. For starters, blockchain technology can mean that real estate is no longer an illiquid asset. Tokenized properties can be cashed in for fiat currency at the owner’s discretion.


Secondly, tokenization of property ownership can mean fractionalized ownership. Instead of one person owning an entire property, it could be split up between two or more owners. This even opens up the possibility of someone’s share of a property going up over time so they don’t have to wait for a sale to be finalized to become an owner of something that they are interested in.