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Blockchain use cases

Real Estate

Real Estate

Since the real estate industry has had the same issues for a long time, such as many independent networks with transactional friction and unclear systems, most customers are dissatisfied. While other industries use cutting-edge technologies and methods, the sector doesn’t change. This tedious process involves a lot of paperwork, background checks, and middlemen. This might be very expensive, time-consuming, and stressful. Seller fraud — selling a property that wasn’t theirs— is another concern. Blockchain can solve these major concerns.

UseCase

Wire Fraud Prevention

Wire fraud has become a major concern in the real estate sector, with one in every three transactions targeted by malicious actors. Traditional methods of wire transfer have proven to be vulnerable to fraud, resulting in significant financial losses. Blockchain-based solutions offer a secure alternative, utilizing smart contracts and escrow to provide specific triggers for transactions and authenticating each step of the process with digital identities and KYC (Know your customer procedure).

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Problem

Wire fraud has become a very relevant problem in recent years in the real estate sector. Malicious actors are able to exploit non-tech savvy users as well as take advantage of apparently legitimate listings and often go unpunished. According to the ALTA 2021 Wire Fraud Survey, one in every three real estate transactions are targeted for wire fraud. Over $9 billion* has been spent on Business Email Compromise (BEC) fraud since 2016. Real estate wire fraud alone is responsible for 16% of those losses.

Solution

Due to their high level of security, blockchain-based solutions make it harder to intercept and manipulate wire instructions in real estate transactions. Furthermore, via smart contracts and escrow it is possible to completely avoid the problem by providing specific triggers for transactions to be executed, as well as notarizing every step of the process and authenticating it with a mix of digital identities and Know your customer procedure (KYC).

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UseCase

Asset Tokenization

Tokenization is the process of converting an asset or the ownership rights to an asset into a unique entity called a token. It is  a solution for the problem of managing and transferring ownership of assets, utilizing blockchain technology to digitize financial instruments, securities, and digital assets and ensure security and compliance in the transfer of ownership rights and transaction histories.

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Problem

Some of the most common problems of the real estate industry are the liquidity of assets and the proof of ownership. Significant advancements have been made across many industries thanks to digital transformation, particularly in the area of digital payments. However, the development of payment technology has also brought observable risks to private client information. Your data becomes exposed while making digital payments since it travels through several different places. As a result, the combination of tokenization and blockchain has historically been recognized as a trustworthy method for data separation in ecosystems.

Solution

By tokenizing properties, blockchain technology can increase the safety and efficiency of real estate transactions. Tokenization simplifies the buying and selling of real estate and allows owners to make transfers directly, without intermediaries. Tokenization allows assets to be divided into smaller amounts, and transactions take place in a virtual environment, lowering the barrier to entry for smaller investors. In addition, tokens issued via the blockchain have the potential to incorporate features such as transfer restrictions and audit trails to verify regulatory compliance.

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UseCases

Land and Property Registries

Fewer than thirty percent of lands are legally claimed and many governments lack a digital system for recording property ownership, causing uncertainty and instability in markets. Blockchain technology offers a solution by replacing paper deeds with digital assets, and providing an immutable record for tracking and verifying property ownership, promoting transparency and financial inclusion. The Swedish land registry authority has already implemented a fully functioning blockchain-based digital land register platform.

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Problem

The World Bank found in 2017 that a lack of legally recognized land claims and inadequate digital tracking of property ownership is a problem in many countries. This can lead to market unpredictability, pressure on legal systems, and difficulty rebuilding after natural disasters. Additionally, land registration systems in developing countries are often slow and ineffective, which can threaten the livelihoods of vulnerable populations and hinder the construction of resilient economies.

Solution

Blockchain technology can improve land title management by replacing paper records with digital assets, making them more secure and tamper-proof. Transactions and property ownership records are tracked on an immutable ledger which serves as a safe and shared source of truth. This increases accessibility and facilitates market transactions, investor confidence, financial inclusion, and community economic and social growth. Examples of this being implemented include blockchain-based digital land register platforms for banks and businesses and Sweden’s land registry authority.

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