In this episode of Innovations in Prop-Tech & Legal Implications, we will attempt a description of Blockchain technology, how it is impacting the prop-tech space, and, in subsequent episodes, its legal implications.
Blockchain Technology Explained
Blockchain simplified is a diary that is almost impossible to forge. In the blockchain, blocks of information are saved in decentralised fashion across millions of computers in the vast and expanding database known as the blockchain (nodes). Information cannot change in any manner.
Information has been created and saved in these blocks. Using cryptography, these blocks connected to one another to create a chain of blocks.
It is given that proptech will do massively well if it fully adopts blockchain technology and grows with it. The catch of the blockchain technology is the fact that it is decentralised, there is no institution operating it. Therefore, communication happens directly through a peer to peer network and transactions are indelibly inscribed on the blockchain for everyone.
How Innovations in Prop-Tech Impacts Real Estate
One of the ways this technology is impacting the real estate space is by eradicating fraudulent practices perpetuated by third party listing apps and websites. Decentralisation and Encryption is possible with blockchain. Hence, there’s no opportunity for price inflation, misinformation with property details reduces too.
The process of seeing and buying properties is shorter and information management for leases improves with the usage of blockchain. Potential buyers are also more certain and confident about the transaction.
Another area where blockchain is impacting the property tech space is through the use of smart contracts. The terms and agreements between a buyer and a seller are in smart contracts. It is in form of codes which duplicates itself throughout the blockchain network.
These terms are in encrypted codes. When compared to the manual contract process, these encrypted documents save time and do not allow for human error. Despite the fact that businesses using blockchain technology offer templates, web interfaces, and other online tools to make building smart contracts simpler, this will definitely aid real estate players in contract formation and will also ease the tedious process of purchasing a home, speeding it up as fast as possible.
These are some of the ways and areas where blockchain is impacting property technology. Do well to look out for the next series of this article where we will highlight the legal implications of the use of blockchain technology in the property tech space.
References
Federico Vigano, Blockchain, https://www.unissu.com/proptech-solutions/blockchain
Steven Wodecki, Top 3 Ways Blockchain is Powering PropTech, https://www.yoh.com/blog/top-3-ways-blockchain-is-powering-proptech
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