Blockchain is the new buzzword in the tech industry. It has been here for quite some time however it recently started making big waves since BitCoin and other cryptocurrencies built on the tech come into the limelight. Since then, every tech company has been trying its hands on it. It indeed is a powerful tech innovation and is being adopted by almost every industry be it banking or media or IT Services and now even in the real estate market.
Real Estate is still considered to be the best and biggest asset and investment portfolio. Especially in a country like India, where real estate is not just an investment it is a matter of pride and contentment to own a piece of land and more of an emotional decision than financial. Now that Blockchain is invading the real estate industry as well, its time that we learn more about blockchain and how it impacts or improves real estate for us.
Blockchain is a continuously increasing chain of records called blocks which are interconnected, linked and secured using encryption technologies. It serves as a Distributed Open Ledger that records any transactions and agreements between two parties in a permanent and verifiable way. Any record of the transaction is stored in multiple blocks and can be verified at any point of time, and any changes or updates are again then replicated across all blocks in order to ensure accurate information storage and retrieval when needed.
Real Estate witnesses high-value transactions and huge number of transactions every day, and with that comes huge number of disputes as well. With Blockchain’s potential of storing the record and verify at any given time is a blessing in this case to validate records of real estate ownership, transfers, and amendments; as an example.
In Real Estate, applications for Block Chain are huge. One big differentiator in the domain is Ownership Title and history. Since all records of a real estate property are stored in multiple blocks, finding information about title history or ownership history of any given property is a sureshot solution, which is bound to bring more transparency to the deal.
Yush Bhardwaj, an IT Security expert and Blockchain enthusiast who also deals in Commercial Real Estate for recording studios at http://worldofstudios.com states “Smart Contracts are a viable option when considering Blockchain and Real Estate. These contracts can be made with just a click of a few buttons and will be stored in the system using Blockchain and hence will be verifiable and secure. Smart contracts can also be used for long-term lease and rentals as well, and will also provide verifiable supporting documentation in case of conflicts or cases like illegal possession.”
“World of Studios currently deals with over 1200 recording studios and we have agreements and contract in place with almost all of them, managing that is a tedious task in itself, use of smart contracts will help save time and money on this while making managing and onboarding new studios will become simple too.” Yush adds.
For using the technology, he warns by saying – If you don’t understand it, please consult someone who has an expertise over the tech, before jumping into something you can’t come out of.
Prospects of Blockchain in India
On the other hand, it is exciting but very skeptical for real-time adoption of Blockchain in India at least in the near future. It’s better if contracts and deals are simplified using tech, but this seems like something that will need time to make a mark in the Indian market. Plus this will face a huge backlash from adopters due to its impact on the black money invested in real estate as all records of the property ownership will be verifiable and Income Tax department and other authorities can evaluate everyone’s wealth and real estate investments which is often used to hide black money or illegal wealth.
However, this may be a viable option where people from abroad or NRI’s who are willing to invest money in India to buy property and can also use cryptocurrencies to make the purchase, and off course only when use of cryptocurrencies is also validated and approved by the Indian Government and authorities for such transactions.
On use of cryptocurrencies or even blockchain, the authorities and even the people are not aware enough. Most real estate developers or builders or dealers are not educated about this tech, no matter how simple it gets, the adoption is bound to face a big fight with the reluctant ones. However early adopters will reap good benefit out of the tech and slowly this may probably become the standard of how things are done but that is still something in the distant future.