Blockchain is where the action resides.
Every day I see broadcast on TV or read an article concerning Bitcoin or the hundreds of other cryptocurrencies. I don’t pretend to understand how cryptocurrencies work: how to mine and use a wallet. What I do understand is that the story is not Bitcoin, but instead the blockchain is where the action resides.
Visualize clouds being data points.
For my understanding, I equate blockchain as all cloud formations currently in the sky drifting around. Each formation has some moister (equate that to a data point.) Individually they have little effect, but collectedly they can determine if this will be a drought year. Blockchain technology can access all those data points through mining technology.
Blockchain is a means of having data spread everywhere with peer-to-peer nodes able to communicate, collect, and transact. With the dispersing of data and encryption, data security goes to another level. There is no one point of residence for hacking.
To read an informative article regarding blockchain click here.
Blockchain could be huge affecting financial transactions with peer-to-peer interactions eliminating many intermediaries. Could be years away, but then again it could be upon us before we know it. Similar to GM announcing they will produce self-driving cars next year. Yikes! Flash Gordon type of stuff; dream and whispers one day and reality the next.
Impact on our financial transactions.
Industries, such as stock exchanges, may be affected by this technology. Transacting stock purchases directly between buyer and seller, no clearing house, with settlement and funds being transferred immediately without the three day waiting period. Can you imagine selling one moment and within minutes have funds available to purchase another holding.
Consider a buyer being given a key to access all relevant information about a home regardless where the information resides. The buyer will have the ability to digitally communicate directly with the seller regarding the purchase of said property. The next step in the process would be to create what is called a Smart Contract. Smart Contracts are in their infancy of development.
Smart Contracts will make all this possible.
Wikipedia defines Smart Contracts as; “A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible.”
A future beta test will occur in Britain using blockchain technology for purchasing real estate including fractional or deferred ownership; think lease-with-option to buy. All title recordings would be done automatically upon completing the transaction. Understand that in Britain buyer’s agents are not used, only the company that obtains the listing negotiates a deal.
An apartment in Ukraine is thought to be the first property bought and sold using the blockchain.
Not long ago Bitcoin was esoteric in someones imagination, but now the CEO of JP Morgan, Jamie Dimon, believes cryptocurrency is the real deal, here to stay. Whether it is Bitcoin or something else, we need to brace for the next wave of technology that will change our lives.
“Siri/Alexa (choose your favorite), submit an offer for 123 Main St, Anytown, USA, for 300 thousand dollars.” Bam! Done!
Update to story-March 17,2018
Inman Select is reporting that the first title recordation via blockchain in the United States has occurred in South Burlington, Vermont. The transaction involved a property owner transferring title of a condominium to her own LLC with the transaction recorded on blockchain. Granted a small step, but a step none-the-less.
A company called Propy provided the technology behind the transaction.
It is interesting to read the opinions by the various parties as to the future use of blockchain as it pertains to real estate.
South Burlington’s City Clerk states “That might be as far as we go. The next steps could be many years down the road, for Propy to be able to send deeds electronically through the system we have. I’m not sure if Vermont’s ready for that yet.”
Propy CEO Natalia Karayaneva issued this statement “The ultimate goal is to make real estate transactions automated so people can transact entirely online.”
Propy is eyeing similar programs in Colorado and Arizona.
I thank Inman Select for providing this timely story.