Many people are familiar with the huge benefits of cryptocurrencies. For starters, the currencies are genuine stores of value as well as being valid, fungible tender for the execution of everyday transactions. Yet, all of these same enormous and potentially revolutionary benefits can be adopted to other classes of financial assets, not just currency itself.
One of the areas in which blockchain technology has the potential to completely upend the status quo is in the largest market in the world: real estate. Through new technology, called securitized token offerings, entire real estate assets are now being ported to the blockchain. This development means that, in the not so distant future, it may be possible to buy almost any class of real estate holding without ever having to so much as consult an MLS.
No pain with blockchain
The blockchain has the potential to radically alter the landscape of real estate investing in three important ways. First, and most obviously, tokenizing real estate assets through the use of blockchain technology will deliver a level of security in real estate transactions that have never before been seen. The cryptographic quality of blockchain-based transactions is close to mathematically unsurpassable. This means that much of the fraud that currently plagues the industry could be eliminated almost overnight.
The second great benefit is that use of tokenized real estate assets has the potential to all but eliminate frictions and middlemen. Just as Bitcoin can be bought or sold by anyone instantly, no matter where on the planet they are located, tokenized real estate will have the same properties. This means that there will be far less friction in carrying out real estate transactions. It also means that those looking to sell real properties, particularly of the income-producing kind, will suddenly have access to a global market of potential investors, helping to add tremendous liquidity to all real estate markets.
And third, it will create a globalized competitive market. This means that jurisdictions with invasive regulation and too many trivial ordinances may quickly find themselves severely punished for their heavy-handedness. With the total freedom of global real estate investment capital to move without any impediments, investors will flock to those jurisdictions that make owning and operating commercial real estate easiest. Ultimately, governments themselves will lose in direct proportion to the freedoms that citizens across the world gain.