You’ve probably heard of cryptocurrency, NFTs (non-fungible tokens), and blockchain before, but do you know what all these things are? And do you know how they are changing real estate, one of the oldest and biggest asset classes in the world? Let’s break down what these terms mean.
Cryptocurrency, like Bitcoin or Ethereum, is a digital-only currency that can be traded for tangible goods and services. NFTs are a type of cryptocurrency but are different in that each NFT is unique from one another. Because of this, NFTs are often worth a lot of real-world money. A blockchain is a ledger of cryptocurrency transactions, sort of like a database, except it’s much harder to hack into and change.
Here are some ways blockchain is changing real estate:
It simplifies the process
The idea of cryptocurrency and blockchains may be hard to wrap your head around at first, but they are simplifying the process of buying and selling property. One way it does this is by cutting out intermediaries like banks and lawyers. This, along with digital listings and tours cutting out the middleman of real estate agents, means that the entire process may one day be done with just the buyer and the seller. With all these intermediaries being cut out, both the buyer and seller save on time and fees.
It simplifies property management
Big property management firms suffer from inefficient and clumsy oversight on their properties, which could be scattered all over the globe. With blockchain technology, it’s easier to share data securely, and it streamlines payments to and from property owners. Just as it simplifies buying and selling property, it simplifies the process of managing property, saving time and money.
It makes real estate more accessible
Ever since its inception, real estate has been an expensive and time-consuming process. Even if you’re buying a tiny home, it costs thousands of dollars and lots of steps. With blockchain technology, you can own just a fraction of a property and co-own the building. It also makes real estate a more liquid commodity, just another way of saying it’s easier to buy and sell your property or a fraction of a property.