Do real estate professionals agree that the blockchain is on the verge of becoming the transactional norm? GRI Club members were joined by a panel of blockchain experts on 27th September in London to examine such market sentiments in a lively, collegial debate.
The members developed their understanding of what many believe could be the catalyst behind a potential paradigm shift in the way in which real estate is transacted.
A quick survey of the room during the initial proceedings revealed quite the spread in the level of knowledge regarding blockchain. The initial stage of the discussion focused on how blockchain technology might increase liquidity via the “tokenisation” of assets and funds. Whilst most appeared supportive of the added flexibility and precision afforded by tokenisation, this guarantee of liquidity was met with some skepticism, especially on behalf of investors with experience in vehicles such as REITs.
The conversation subsequently turned to the issue of security. Who ensures the validity of the transactions, and what if someone were to hack the blockchain? The experts elaborated on the technology’s security measures and the virtual incorruptibility of the transactions and information recorded therein. Members seemed reassured as one guest surmised the blockchain as “a big spreadsheet in the sky” that simply can’t be tampered with. Security aside, some see the government’s reluctance to embrace blockchain as a barrier to mainstream adoption of the technology; it was encouraging to hear examples of the Swedish and Maltese governments’ implementation of the blockchain, which could potentially open the door to other territories to follow suit.
he closing stages of the discussion settled around the concept of disintermediation of brokers, agents, etc. and its impact on the current state of the industry. Most agreed that blockchain could indeed lead to drastically reduced timeframes for transactions and costs associated with third party involvement. Some questions on the ramifications for due diligence procedures and liability remained along with skepticism as to whether a truly “trustless” environment could feasibly be manufactured in the real estate market.
Based on the final sentiments of most members, the attitude towards blockchain and its application in real estate is generally positive. Whether the real estate market will unanimously place their trust in the technology in the very near future remains to be seen, but interest in the blockchain amongst members seems to be increasing exponentially, and support of the technology as it applies to real estate is certainly more prevalent than in recent months.
Source : GRI