What is blockchain and why it fits into Real estate?

We are increasingly hearing that Blockchain technology is being compared to the Internet thirty years ago, both from the point of view of its potential and the way in which it is entering the market and in some cases changing the very concept of the sector in which it wants to operate.

It has been observed that in the financial sector this technology has had a deep effect on the development of recent years and it is natural to ask where this technology can still be implemented and the changes that will follow these applications.

The purpose of Blockchain is the creation and management of distributed databases for peer-to-peer transactions, shared between the nodes of a network. An infrastructure that therefore proves to be ideal for managing data precisely, representing the will of the community in which it is adopted and in which shared rules are set and able to create liquid value, value that can be exchanged within the infrastructure in an incensurable, immutable and recognisable way.

As the internet has profoundly modified our way of conceiving data and creating values, the blockchain is changing how we intend to exchange these values, bringing with it not only different visions but also the need to adapt existing models, the need for a new paradigm, for this technology cannot be applied to old models of value management.

Precisely because of the essential characteristics of Blockchain, it can be applied very effectively and efficiently to the Real Estate sector, where for more and more time it is clear the need to be able to manage values, data and rights in a transparent and optimised way, reducing the problems of a contractual nature and the frictions related to them.

The transparency of the data and the possibility of verifying it from within the infrastructure allows users to have confidence and opens up the possibility of newprocesses, for example by changing the conception of what is now considered real estate within a global market through the process of tokenization. Having a global valueand recording events in a certain, immutable and verifiable way, it is possible to transfer currencies and rights in total security and without intermediaries, meaning an evolution and a revolution for real estate.

There are countless sectors where this technology can change many aspects for the better; from energy management to transport or from applications in cities, to value management. When applied to the real estate sector it is possible to benefit from the management and exchange of the value of the property. During the development of this technology it is necessary to build a new paradigm, in which machines and humans have the possibility to communicate, and above all, to carry out safe and efficient transactions.

To date, the construction of a decentralised infrastructure used for transactions, characterised by interoperability and regulated by common standards, is therefore the first challenge to be addressed.

Thanks to this technology and through automation processes and smart contracts it is possible to eliminate non-valuable tasks of intermediaries and their related costs, increase the efficiency of operations and their speed, but above all reduce the risk of fraud and scams thanks to the possibility of verification in the distributedregister.

In conclusion, the application of Blockchain to real estate will certainly bring many benefits, but on the other hand also challenges that will require new expertise to betterunderstand and guide this evolution and revolution. •

‍