A blockchain is a continuously growing list of records, called blocks linked and secured using cryptography. Blockchain gained popularity as the technology behind the cryptocurrency bitcoin and has since exploded its presence into just about every sphere where technology is used.
Last year, founder of online site TechCrunch Michael Arrington used an Ethereum smart contract to buy a Ukrainian apartment. Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract functionality. This made waves in the world of real estate and the blockchain world.
Blockchain technology provides an efficiency that is different from traditional methods. People looking for something beyond the scope of traditional banks and insurance companies are now seeing blockchain as the future.
When you control real estate’s legal ownership via self-executing code, it can create an easier process and make some parts of the process fully automatic, blockchain experts said.
A smart contract could be set up to automatically auction a property after a certain number of payments are missed, and then split the proceeds between the creditors. Instead of needing to go through lawyers and manually conduct the process, in theory, the SmartLaw code would handle all the auction administration, according to online website INC.
While technology users have only positive things to say, it does not come without risks. Some people have said that it remains an un-ventured domain and it is unlikely that regular people would risk entrusting their house to a cryptocurrency.
According to INC website, a more straightforward way to blend real estate and cryptocurrency is to buy property using cryptocurrency. Los Angeles real estate agent Piper Moretti is actively representing and seeking clients who want to use their cryptocurrency investments to buy a property. So far it’s been pretty uncomplicated: People sell their cryptocurrency when they’re ready to pull the trigger, they then complete a normal cash transaction.
Crypto-to-crypto transactions haven’t really taken off yet according to her.
“I don’t think blockchain technology is going anywhere. We’re on the very forefront … and that’s definitely going to disrupt the real estate industry.” Moretti said.