Will There Be a Real Estate Cryptocurrency?

Will the Future of Real Estate be Disrupted by Cryptocurrencies?

To be overly simple - yes - there will be real estate cryptocurrencies. One example is Propy. Propy is a blockchain platform that lists real estate properties and automates the transfer of ownership. The Propy tokens, PRO, are the currency used on the Propy platform. Using PRO would be one example of buying real estate with cryptocurrency.

Now, if you think about this critically, PRO can be accepted by any vendor. It is a just a currency after all. To be more precise, it is the Propy platform and other blockchain platforms that disrupt the future of real estate, not the cryptocurrencies themselves. With blockchain, all of the operations that come with buying and selling a property can be automated. Most of this is completed with the help of smart contracts

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Okay, so what is a smart contract?

It is smart contracts which make real estate cryptocurrency platforms functional. One of the most famous projects in the space, Ethereum, introduced the industry to smart contracts in a more mainstream fashion. Unlike Bitcoin

, Ethereum is a blockchain which allows developers to launch applications on top of it. Think of Ethereum as the Apple Store for the decentralized world. It can power millions of decentralized applications, also known as dApps

dApps

Distributed Apps. Applications without centralized control.

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Source: Ethos YouTube Channel
 

A smart contract is a layer of software that allows an application to record data and interact with a blockchain, in this case, Ethereum. At the basic level, it can automate and execute the terms to a written contract. A common and easily explained use case for smart contracts is to automate escrow functions. So, instead of trusting a third party to act as an intermediary, you can now trust unbias software. For example, you send me a TV, I send funds to a smart contract (acting as an escrow), and once I received the TV, funds are released to your wallet

. Normally this process would require paying substantial escrow fees and trusting another person. Keep in mind that there are much more advanced dApps, such as casinos, games, and other fun types of apps we are all familiar with, in addition to professional ones, such as Propy, essentially acting as a real estate cryptocurrency. At a broad level, it is not only Propy, but because of Ethereum, real estate can be transacted in a faster, more trusted manner.

In brief summary, the advantages of smart contracts are:

• Automated - makes for a better user experience. Functions such as buying products or transferring legal ownership are now quicker, more trusted and automated.
   
• Transparent and Secure - everyone involved in a transaction can confirm payment is made, the product is delivered, and ownership is legally transferred.
   
• Cheap - smart contracts make many services cheaper for users on either end of a transaction.

So, it is smart contract platforms such as Ethereum that disrupt many industries from the future of real estate to law, finance, or e-commerce.
 

How will blockchain impact the future of real estate?

Now that we explained the fundamental advantages of a smart contract which are that it makes for automated, cheaper and more transparent services, let’s break down how each of these points affects the future of real estate.

Source: pwc.com

 

The Future of Real Estate is Automated

The real estate industry is full of paper pushers. This means there are several employees from various associations involved with transferring ownership whether it be land or property. All of this can be automated via smart contracts. Currently, when you purchase a property you must pay for it and have ownership of the property transferred from the previous owner to you. This involves updating bank and legal records which can be a slow process with unexpected fees from the broker.

Thanks to the blockchain, real estate purchases, and sales can be completed in an automated, faster fashion. Taking Propy as an example, the protocol will not only manage the escrow part of a deal but also mirror public records of ownership and update them accordingly. The hope is that state and federal governments will adopt Propy as the main public record for real estate related transactions. If this form of adoption happens, then you can say that Propy will be one of the best real estate cryptocurrency platforms.
 

The Future of Real Estate is Transparent

Always remember that the blockchain is a public, decentralized ledger. This means that thanks to platforms like Ethereum, real estate transactions will be recorded on a public ledger, in an anonymous, immutable

fashion. It is this transparency that creates a trustless

Trustless

The ability of a system to be trusted without the need of trusting the individuals with which you are transacting.

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environment, getting rid of the need for a trusted third party. For any piece of information to be recorded to a blockchain, all nodes

Node

A computer that runs a cryptocurrency’s software and validates transactions.

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in the network must agree on the status of the updated ledger. For example, if iTunes’ global library was decentralized

Decentralized

Distributed amongst its users rather than controlled by one group or within one certain area.

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on a blockchain, then each time someone uploaded a new song to the network, all nodes running iTunes’ network would need to confirm the new song and add it to the list. In the end, there is an agreed upon, global, decentralized ledger of songs.

Using a real estate cryptocurrency platform buyers and sellers can confirm funds and titles or other documents of ownership have transferred by looking on the app connected to the blockchain.