HOUSINGNEWS REPORT
HOW BLOCKCHAIN COULD TRANSFORM PROPERTY RECORD TRANSPARENCY
involved and in new-home transactions. It’s also a process that can drag on due to inefficient communication between the various parties that can result in scheduling snafus and process delays. Blockchains can speed up this process by creating a shared place to figure out what needs to happen next. Even more imaginatively, smart contracts could be used to move through the process even quicker with assets being released as soon as commitments are met. The adaption of blockchain is a natural fit to reduce the overhead and coordination in the current closing process. “The closing process of a property sale is overly complicated. Blockchains can speed up this process by creating a shared place to figure out what needs to happen next. The adaption of blockchain is a natural fit to reduce the overhead and coordination in the current closing process.” A more important influence that blockchains have on the real estate industry is transparency of land ownership. In countries without a centralized title system, land ownership is a very fluid situation because land could be seized by the government, or paper titles could be forged.
to hacking. Recent hacks on Yahoo! and Equifax prove that not only is our data vulnerable, but we may not get disclosure until many months after the fact. The advantage of having many distributed copies is that the system is only vulnerable if someone could manipulate all copies at once. Another benefit to the blockchain’s ecosystem of having many parties verifying and maintaining data is that it forms an implicit transparency in the system with each party acting as a check against every other party. Consequently, there is a blind trust due to the reliance on that transparency. An Asset Class of Its Own Bitcoin and the blockchain being digital also supports uses that traditional physical currencies could not. The simplest differentiator being that a single Bitcoin can be fractionalized
into pieces impractical for physical currencies. Investing in Bitcoin is highly accessible at any price point because there’s no need to purchase a whole Bitcoin; it can be obtained and sold a fraction at a time. A more experimental feature that many blockchain startups are developing is building applications on top of cryptocurrencies, with the biggest investment in smart contracts. Smart contracts act as self-executing contracts once certain stated conditions are met. The goal being to eliminate all intermediaries in a transaction. The Real Estate Connection The closing process of a property sale is overly complicated. There’s at least five stakeholders in the transaction: the buyer, the seller, escrow, the real estate agent, and the mortgage broker. There can be more parties involved in some states that require an attorney to be
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FEBRUARY 2018 | ATTOM DATA SOLUTIONS
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