Top Blockchain Applications Making Waves in Commercial Real Estate

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(Editor’s note: This article first appeared on RealAtom. We are republishing because the content could be useful to many people.)

 

The commercial real estate (CRE) industry is comprised of many different types of service providers, including property management, brokerage firms, banks, and other types of lenders. When a CRE transaction takes place, there are various operators involved, requiring extensive sharing of official property documents, and financial information which need to be validated. The requirements for validating all information across all parties slows down the speed of each transaction, which can take weeks and months to complete. Many CRE firms have turned to blockchain to speed up execution times, decrease error and increase transparency in each transaction.

What Is Blockchain?

Blockchain technology is a way to store and transfer information in an encrypted manner by distributing data instead of copying it in a central location. Blockchain does so through a cloud, peer-to-peer network that eliminates the need for a third party, which ultimately reduces transaction fees. A digital ledger is then created and updated with each financial transaction in blocks.

There are plenty of benefits to making transactions and transferring data using blockchain as the technology is not controlled by one central entity, such as a central bank. This means that breaching these blocks is extremely difficult, maintaining the sanctity and transparency of its transactions and data.

Blockchain is the backbone of cryptocurrencies such as Bitcoin, which offer speedy and low-cost ways of sending and receiving money.

Faster Transactions

One of the most exciting ways blockchain is disrupting the CRE world is in the form of smart contracts. The industry currently relies on an inefficient system of old-school verification of property ownership by conducting research to ensure the property belongs to the party who is selling it.

Blockchain can reduce the speed in which the chain of custody regarding CRE properties takes place as a property’s title would be stored on a public ledger. This would remove the need for another central repository, thus reducing transaction, state, city and legal costs. The same principle would apply for leases that would be recorded via blockchain.

More Transparent Deals

Blockchain can also ensure that real estates assets are more liquid and the terms of the agreement are fully understood by both sides as every piece of data regarding a property would be stored publicly. This includes data surrounding former owners, construction done on the property, past maintenance costs and records regarding former inspections.

Having all this information available would give the investor a more comprehensive idea of the property they are investing in. Blockchain essentially ensures that everyone is on the same page and both sides are fully aware of what they’re getting into as every piece of information is out there for anyone to access.

Digital Paper Trail

Another challenge with the CRE industry is the fact that public records can be outdated, unreliable or not available. Following a property’s paper trail can be time-consuming and frustrating as a lot of this information is lost due to poor organizational skills from industry workers and legacy systems that lose data when updated.

With blockchain, every piece of information on a property would be available in the same place rather than in multiple physical and digital domains. Blockchain would also help to eliminate the type of fraud that sometimes exist in the industry as deeds and titles can be counterfeited easily.

Buying Property With Cryptocurrencies

As previously mentioned, Bitcoin is a cryptocurrency that relies on blockchain to complete financial transactions online in a matter of seconds. Some investors and real estate firms have started adding Bitcoin to the industry, including Ivan Pacheco, who bought a two-bedroom condominium in Florida for $275,000 in Bitcoin.

In the residential space, you can buy a condo on the Lower East Side of Manhattan with Bitcoin. Meanwhile, some apartments in New York City are allowing their tenants to pay for rent using Bitcoin. Cryptocurrencies have been historically volatile and they’ve been on the decline since peaking in December 2017, but some investors believe that the future of real estate will be closely tied with Bitcoin and other digital coins.

Nevertheless, blockchain’s role in the CRE industry is becoming more prevalent each day. The technology’s potential to speed up transactions with smart contracts, its ability to add transparency to a deed or title and the fact that it dramatically decreases the chance for fraud suggest that more investors will flocks towards firms that use blockchain for CRE transactions.

 

This article first appeared on RealAtom.

Business Process Giant, Conduent, is Bullish on Smart Contracts

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Ashok Vemuri, CEO of Conduent
June 8th, 2018 Conduent Analyst Day

Of these five practice areas, I would like to spend a few minutes on blockchain. I’m not referring to bitcoins here but the underlying technology which has endless applications across business and government services. Blockchain technology can be applied to any multi-step transaction where timeliness, traceability and transparency are required. It promises to drastically transform digitized business processes in several ways.

Multiple steps and relationships across an entire stream of interactions can be managed simultaneously while making them more efficient, agile, secure and transparent. We are convinced that distributed leisure and blockchain technologies can address a number of pain points for our clients.

Smart contracts, a capability that blockchain enables, is an area that we’re particularly excited about. There are almost infinite possible applications for smart contracts, from automating entire facets of the supply chain to introducing new levels of security and transparency to the procurement process. You’ll be hearing more about our progress here and results with clients in the coming quarters.

VMware’s CEO bashes blockchain hype: “It’s one of the most compute unfriendly algorithms that has been born right over the last 20 years… It’s way over hyped today.”

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Patrick P. Gelsinger, CEO, VMware (VMW)
June 6th, 2018 BaML Global Technology Conference

Well, if we talk about the three big hypes today, people talk about AI, IoT and blockchain. And I think, all of them are extraordinarily important and all of them are overhyped. People are talking about AI, which is nothing but good software and it’s now become AI, right.

People are talking about 30-year-old and 40-year-old embedded software businesses as IoT. It was a crappy 30-year-old embedded business a decade ago, and now it’s cool and sexy and it’s IoT [ph] one of them if (36:40) you’re talking about, right. And similarly, right, in blockchain, we have a lot of blockchain used cases, just a good database will do just fine. Right.

Now, all of that said and being a little bit jaundiced and this is 38 years for me in the world of technology right. I do think all three of those are profoundly important, right. I’ll just say profoundly important to the future. But many of the conversations that go on today and I’ll just say some of these I say as we technologist, I was talking to a CEO of another major technology company and he’s been fighting against some of the AI rhetoric. He says finally I just gave up. Right, I can’t. It was like we’ll call it [ph] AI 2 (37:21) even if it’s just good software algorithms and I do think there’s a fair amount of that going on. But that said hey blockchain, I think fundamentally an immutable distributed secure ledger that’s profound. I think it’s as important as public private key encryption was to security but we still have quite a long time and so we build out the used cases and the underlying technology.

We just announced some things that we’re doing in the blockchain area specifically scalability of blockchain. You know, right now, it has exponential compute requirements. It’s one of the most, I’ll say, compute unfriendly algorithms that has been born right over the last 20 years.

Well, we think we’ve solved some of those problems, right. We’ve also solved the order to deal with the issue of blockchain and other key issue. For some of those things, hey, it will be a cool technology but it’s way over hyped today

Bitcoin and Cryptocurrency Litigation

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Ripple, Etehereum and Bitcoin and Micro Sdhc Card

Bitcoin and other cryptocurrencies are gaining more attention as days pass. Aside from the advantages that cryptocurrencies have like anonymity and easy international transactions, people are enticed by the fact that it can become a good investment. Apart from trading bitcoins for cash, you can also use bitcoins to buy gift cards, book flights, and hotels, buy furniture, or even buy real estate properties. Bitcoin purchases are not taxed at the moment since there is no way for third parties to identify, track, or intercept transactions that use bitcoins. Transaction fees are considerably lower as well compared to credit card transactions or services like Paypal.

Although there are many advantages in using bitcoin or other cryptocurrencies, just like any other investments, you should always be careful with your transactions. Since cryptocurrency is not regulated, many unscrupulous people have taken advantage of this and incidents of fraudulent cryptocurrencies, and other types of scam related to cryptocurrency have happened. One example of this is Prodeum, a cryptocurrency start-up that scammed its investors in just one weekend.

Because of these scams, law firms have now been involved in helping the victims. Cryptocurrency litigation has now become something that some lawyers specialize in. There are a lot of factors to consider when a cryptocurrency dispute arises. Aside from fraudulent Initial Coin Offering (ICO), lawyers could get involved if the cryptocurrency was used to launder money or hide assets; they could also get involved when there is an issue with the company, commercial, or intellectual property laws being violated in relation to cryptocurrency.

Here are some things that you can do as a cryptocurrency user to avoid being scammed:

1. Research. – Just like with any other investments that you will make, research is essential. When investing in an ICO, make sure to read and dissect their white papers to ensure that you’re working with reliable people. Take time to research the people behind the ICO, their whole team, board members, and other investors. It’s vital for you to learn as much as you can about the company before investing so that there will be no unpleasant surprises.

2. Be vigilant. – Cryptocurrency is still primarily bought and sold at exchanges. Because cryptocurrency is something new and the fuss around it is its value, many people get scammed by the promise of unrealistic prices. If an exchange promises incredible discounts or offers that seem too good to be true, it probably is. Another thing that you can do to avoid bitcoin exchange scams is to check the exchange’s URL. If a website’s address starts with HTTPS instead of just HTTP, that means that the traffic is encrypted and therefore has more protection.

3. Only use trusted sources. – Hardware wallet is a physical device that stores your private keys. Hardware wallets offer more protection from hacking since there is no way for hackers to access them when you’re not online. However, hackers have now found a way around that. Some hackers sell hardware wallets that have a backdoor for them to access all your cryptocurrency and the best way to avoid this is only to accept hardware wallets from trusted sources.

In need of expert legal advice? Contact Hogan Injury.

None of the content on Hoganinjury.com is legal advice nor is it a replacement for advice from a certified lawyer. Please consult a legal professional for further information.

This content is a guest post on behalf of Professor Yang.