New Startups Entering the Real Estate Blockchain World

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The world of real estate is a wide-open frontier for those roping opportunities in the wild west of blockchain technologies. It is important to understand what conditions currently exist in the market that make the blockchain such an attractive solution.

It has been a long-accepted fact that trends move slowly in real estate, and this is due to many factors. Startups have to contend with the initiatives that are already in place to solve the age-old problems associated with moving property from one person or entity to another.

These transactions involve large sums of money, and when dealing with real estate development, these figures loom even larger. It is not unheard of for hundreds of millions of dollars to be invested in creating shopping centers, hotel complexes, or other multi-layered undertakings.

A startup has the additional challenge of finding a way to work with established players, but where there is a difficulty, this often becomes the catalyst for innovation and creative out-of-the-box modes of moving forward.

Having said all of that, there are few blockchain applications in operation right now, as they have been in the phase of raising capital and gaining investors after their initial coin offerings over the past few years. And it is believed that, though it will take time to assimilate, the use of blockchain in the real estate will revolutionize the industry.

Significant Obstacles

The predicating need of a banker in these gargantuan transactions is something that the blockchain could, potentially be used to overcome. When first invented, the peer-to-peer network gave people the opportunity to move significant amounts of money from one person to another, decentralizing these processes through elliptical curve cryptography and guaranteeing safe, secure transfers.

Today, the objective toward banking and real estate will likely have more to do with providing the myriads of data that ar needed to complete these arrangements. Just like in the air travel industry, people are realizing that information systems are often what jam up procedures, requiring take time and energy to devote to these tasks.

It is not unheard of to pay for significant real estate purchases with Bitcoin, for example, but this isn’t likely to become the norm in the near future. It would necessitate an overhaul the likes of which has never happened in the field before, and it would take the agreement of all participating industries. Mostly, it would also take time.

In the meantime, the most likely change for people to accept in a timely fashion is the acceptance of the blockchain in facilitating the realtor-client relationship. Deedcoin has emerged as a platform on which people can link up with those selling real estate, and it offers a flat rate 1% commission.

It must be considered that $15 trillion worth of property in the United States is held in private hands and that the standard six percent rate would equate to the tune of $900 billion dollars. This number jumps to $200 trillion worldwide, and the amount of money that would be freed up would change the way people approach real estate.

The decisions that corporations currently make take into consideration the fees they will be assessed when deciding whether to buy or sell. A five percent difference would be enough to solidify either a deficit or a profit, triggering a domino effect.

Much is at stake, and many people are aware of this fact. The goal of these startups is not always necessarily to attack the real estate sequence as a whole but to take on subsets of the buy-sell chain, and time will only tell where this will lead, as we have seen only the beginning.

AI Capital Advisors can help your real estate development project in an advisory capacity, as we have a great deal of experience in this role. Contact us for more information to see how we can help you today.