I’m often asked the blockchain “adoption” question by the media, those who follow technology trends and real estate professionals. Given that real estate is the largest commodity in the world, with an estimated $217 trillion valuation, it’s still amazing to me that the industry is only now taking blockchain seriously. On the other hand, massive, complex and slow-moving industries like real estate are rarely innovation leaders, especially with regard to technology. But once they do adopt a technology—watch out. That’s when platforms truly take off. Cloud computing is an obvious example.
At the outset of 2019, I see blockchain gaining strong momentum in the real estate industry. What excites me most about this trend is that the best is yet to come with regard to the positive changes blockchain will enable. It won’t just be agents and realty companies benefiting. In fact, individual buyers, sellers and renters will also benefit tremendously.
Real estate is a mostly fragmented, inefficient and antiquated industry that’s ripe for an innovation like blockchain. The blockchain benefits that fit the real estate business model perfectly are security, transparency, transaction processing speed and administrative cost reduction.
There are five use cases, in particular, that I see leading the way to blockchain’s adoption:
2. Automated payment processing
3. Transaction management
4. Reliable and immutable recordkeeping
5. Land title registrations
While there are other use cases, these five are available today. There are other innovations in the works—redefining legal contracts and next-generation use cases for tokens are two that are imminent—and I expect rapid industry adoption of blockchain applications by 2020.
At its core, blockchain is a technology platform. This means that, by its very nature, it’s vulnerable to threats. Blockchain’s distributed ledger architecture, immutable transaction records and strong encryption provide a unique security profile, but massive cryptocurrency hacks—among other breaches—clearly demonstrate that it isn’t invulnerable. But compared to most other platforms, blockchain ranks high.
There’s also the threat related to the fear of something new. In a conservative, traditional industry like real estate, where the processes and systems are about as legacy as you can get, even obvious benefits like security and transparency aren’t enough to get people to change their established ways. That’s not unique to real estate, but it’s still common. So, while it’s a threat, it’s fading fast.
Blockchain Is Ready for Its Close-Up
My company and others are changing the way real estate deal-making is done forever. The industry’s forward-thinkers are already implementing blockchain applications, and consumers aren’t far behind. The use cases described above deliver clear-cut, tangible benefits to everyone involved in a real estate deal. I think 2019 will be the year that blockchain achieves escape velocity in real estate.
Chao Cheng-Shorland is chief executive officer of ShelterZoom Corp. For more information, please visit www.shelterzoom.com.