The Blockchain technology concept is best known as the methodology which underpins the Bitcoin virtual currency, however it is increasingly being studied for its application across many types of transactions – Real Estate crowdfunding is no exception.
Blockchain technology is a method of creating, sharing and verifying data. In practice a blockchain transaction is recorded in a digital ledger which is shared with a distributed network of computers. When a new transaction is to be added or changed, each participant in the network must agree to the addition or change – the transaction is only processed if a majority of participants “approve” the transaction. If the transaction is approved, the new “block” is added to the chain in every copy of the ledger.
The Blockchain methodology has several advantages over existing methods of exchanging and validating transactions;
Real Estate crowdfunding appears to have all the hallmarks of an industry ready for Blockchain:
The Blockchain methodology is being actively explored by a raft of organisations and companies around the world, for example the R3 consortium which now includes some 50 financial institutions. In Real Estate, an International Blockchain Real Estate Association has been formed boasting some 700 members.
Of course blockchain has a long to go way to become commercially viable and widely adopted, however it is progressing rapidly and seems to have an air of inevitability about it. It seems that Blockchain disruption of Real Estate is on its way.