Real Estate Doesn’t Need to Be So Complicated 11 882

Because blockchain is basically data management, one industry it stands to improve a great deal is real estate. The process of buying and selling real estate is first and foremost a data transfer. There were $463.9 billion in large cap commercial real estate investments nationwide in 2017. All that money moves paper. Since land cannot actually be owned, the idea of land ownership must be exhaustively documented, organized, purchased and sold. The myriad processes that make up one transaction, namely title transfers, putting funds through escrow, and navigating an outdated MLS system, all stand to benefit from a technology upgrade.

Blockchain could quicken and simplify these processes by virtue of its transparent, untamperable and near instantaneous handling of data. “What if you could irrefutably determine who previously owned a property, record with absolute certainty who the new owner is after it sells and reference the blockchain at any time to verify all previous owners?” asks Mark Rutzen, Co-founder and CEO of Eondo Inc.  “Even the combination or splitting of parcels would be easy to record with blockchain technology,” he adds.

Moving into the future of real estate, particularly commercial real estate and investment, will soon mean embracing the block. Here are some of the ways blockchain is changing real estate.

Financing Developers and Investors

For anyone in real estate investment or development, the most glaring obstacle is getting the upfront capital when you find a good opportunity.

“Real estate investors and developers are turning to new technologies like blockchain smart contracts to find more liquidity at lower costs,” says Joseph Snyder, CEO at Lannister Holdings, an Arizona-based technology company working to create more blockchain lending and crowdfunding tools through their Lannister Development subsidiary.

Lannister is publicly traded and regulated by the SEC, which is uncommon for a blockchain company. But Snyder sees it as an inevitability in the long term. He anticipates a future where blockchain real estate regulation is the norm, and blockchain development like Lannister’s is part of mainstream business development and commerce.

“We wanted to be heavily regulated up front,” he says. “We believe regulation and financial compliance are coming down the pipe.” And, according to their website, they “see a future of security, transparency, and growth beyond the stale oligarchy of traditionalists.”

Systems like this give access to capital to smaller investors and developers who don’t have a lot of capital to work with up front. In theory, this could level the playing field.

Real Estate Professionals Worldwide Are Developing a Blockchain Future

Others are envisioning a near future where you could buy a house with a click on a shopping cart icon. If blockchain can clean up the real estate process enough, it could do more than just disrupt the industry. It could give it a total overhaul.

The P2P nature of blockchain enables faster sales and a higher volume of deals closed with fewer legal headaches and administrative fees. It also means a trustless economy and immediate processing of property values and other technical details, like zoning regulations or utility expenses.

Organizations like the International Blockchain Real Estate Association, or IBREA, are dedicated to incubating the many possibilities produced by the intersection of real estate and blockchain. Local chapters of IBREA hold meetups in 23 cities for its 5,000 members to come together as professionals and co-educators, with the goal of moving the real estate world into the blockchain age.

According to Ragnar Lifthrasir, founder of IBREA, “real estate technology is going more peer to peer.”

“I think what people are missing with blockchain and real estate is the data problem,” he adds. “We have so much data in real estate. So to really do blockchain real estate well you also have to have a good data system, which is distributed file storage, or IPFS.”

Real Estate Without Headaches

With some real world testing to work out the bugs, blockchain real estate could take us into a future where we can buy and sell property as easily as we do a cup of coffee. With data properly arranged and the transactions secure and transparent, there will be no need for the systems currently governing the industry—nor the room for error, delays and complications they open up at every step.

For anyone with aspirations in real estate development or investment, blockchain promises to open a lot of doors.

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I grew up in the Silicon valley under the technological mentorship of Steve Wozniak. I'm a proud member of the Choctaw Nation, I've lived, worked and traveled all over the world, and I now write in the Pacific Northwest.

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Kenya Looks to Blockchain for Affordable Housing Project 9 9458

The “Silicon Savannah” is moving deeper in direction of tech. The Kenyan government has announced a plan to manage the property allocation and funding of 500,000 affordable housing units with blockchain technology.

The units, which the government aims to build by 2022, will be set aside for households with an annual income below 100,000 Kenyan Shillings, about $990 USD. The World Bank estimates Kenya’s gross national income per capita at $1,290, according to Business Daily.

Blockchain will help ensure that the affordable housing is in fact going to those who fall below the average income bracket. Land title fraud has caused problems for Kenyans, as land grabbers target homes and even schools for illegal sales and development. Blockchain’s ability to store verifiable proof of title could help safeguard against fraudsters.

“Kenya will use blockchain technology to ensure the rightful owners live in government funded housing projects,” said Principal Secretary of Housing and Urban Development Charles Hinga, speaking with the World Bank on Monday.

Hinga said the plan will be financed by the National Housing Fund, which will raise over $59.5 million per month to get the project underway. But Cabinet Secretary for Transport, Infrastructure, Housing and Urban Development James Macharia said it will take $31.7 billion to build a million homes, each of which will cost between $3,000 and $30,000. Macharia called for support from private sector financing.

Under the financing plan, working Kenyans will contribute 1.5 percent of their salary, which will be matched by their employers. “On affordable housing one should not spend more than 30% of their disposable income for housing,” Hinga tweeted yesterday. “Anything above 30% is not affordable.”

A Trustless Relationship Between People and Government

The initiative represents a considerable push to solve housing and title problems for the nation’s lower income families. But how will the government decide to whom the housing units will go? With so much talk about financing underway, people are already calling on the government to outline a plan for how they’ll distribute the affordable housing units.

The government will need to deliver the housing projects in a time when, Hinga acknowledges, the public is skeptical. Earlier this year $78 million went missing in a corruption scandal involving the National Youth Services. Where there is little trust between the people and their government, Kenya hopes to establish transparency through the blockchain’s distributed ledger system.

Kenya’s Move Toward Tech

In March, Kenya’s Ministry of Information, Communications and Technology appointed a blockchain taskforce to explore the ways the nation could use blockchain technology in the public and private sectors. They called it the Distributed Ledgers and Artificial Intelligence taskforce, and by September its chairman, Bitange Ndemo, was calling on the government to tokenize the economy.

Ndemo also proposed government implementation of blockchain to certify the authenticity of retail goods, so consumers can be sure of where their food is coming from, for example.

Governor of Kenya’s central bank Patrick Njoroge has also voiced support for the use of blockchain technology to strengthen service delivery, although he’s opposed the use of tokens and digital currencies.

But the affordable housing initiative could be the Kenyan government’s first real world implementation of the blockchain.

Christie’s is Now Dealing Artwork on the Blockchain 5 723

International art dealer Christie’s has announced they’ll be tracking art transactions and storing encrypted registrations on the blockchain. The 250 year old London based auction house is keeping things interesting by partnering with Artory, a blockchain registry for the art market.

This November, Christie’s will unveil An American Place: The Barney A. Ebsworth Collection at their Rockefeller Center showroom in New York. The collection includes work from modern American masters such as Georgia O’Keefe, Jasper Johns, Willem de Kooning, Jackson Pollock, and Edward Hopper.

Christie’s estimates the value of the collection over $300 million. Every sale from the auction will include an encrypted certificate of sale, via Artory, and a permanent record of the transaction chiseled in block. Christie’s expects this to be a major boon to collectors and investors.

“Our pilot collaboration with Artory is a first among the major global auction houses, and reflects growing interest within our industry to explore the benefits of secure digital registry via blockchain technology,” Says Christie’s CIO Richard Entrup. He calls the upcoming auction “an ideal platform for our clients to experience this technology for themselves and to explore the advantages of having a secure encrypted record of information about their purchased artwork.”

Artory CEO Nanne Dekking adds that they’re “delighted to work with Christie’s on this industry-leading collaboration”, and pleased to be able “to show the art world how digital encryption technology can benefit buyers and collectors in the future.”

The Blockchain Has Unique Benefits For Art Dealers and Collectors

It isn’t the first time we’ve seen art for sale on the blockchain. DADA.nyc is a blockchain-only dealer for digital-only arts. They create scarcity by limiting the number of editions of digital works, and using the blockchain for proof of that scarcity and authentication of the work’s origin and ownership.

A Singapore startup called Maecenas had the idea of “fractionalizing” artworks into shares which can be bought and sold on a distributed ledger. You could, for example, own 6 percent of a Warhol. Your money goes to the gallery or individual that owns controlling shares, and your investment appreciates along with the piece.

Verisart is a blockchain system for creating secure digital certificates and detailed, “tamper-proof” records for art and collectibles. Systems like these promise to solve some of the art world’s oldest problems: forgery, devaluation, theft, and the difficulties inherent in proof of ownership and transaction histories when relying on a paper trail.

With art transactions inscribed into the blockchain, prospective buyers can verify the piece’s authenticity, and can see the history of the artwork and its valuation, without encountering any personal details about previous buyers and sellers.

The First Major Collection to Be Auctioned on the Block

This is the first time a major art dealer will sell a collection using a blockchain platform. Prior to the November auction, a portion of the show is touring the west coast, with showings in San Francisco October 16th-20th, and in Los Angeles October 23rd-27th.

Barney A. Ebsworth, the late modern art enthusiast whose collection will be auctioned at Christie’s, was an American entrepreneur and venture capitalist. Art News listed Ebsworth among the World’s 200 Greatest Collectors, and Art & Antiques called him one of America’s Top 100 Collectors.

His home outside of Seattle was designed by award winning architect Jim Olson with the express purpose of housing the art collection. It included a den built around the 1929 Hopper masterpiece Chop Suey, “where Ebsworth wanted to see it as he read his morning paper.”

Chop Suey (pictured above) is one of the last Hopper paintings in the hands of a private collector. According to Artlyst, Ebsworth promised the painting to the Seattle Art Museum, where he was a member of the board. But his family has decided to sell it instead. The painting is estimated to fetch around $70 million.

Christie’s Continues to Pursue a Tech-Forward Reputation

Just halfway into 2018, Christie’s had already sold $4.04 billion in artwork and collectibles. They hold 350 auctions per year, selling artworks ranging from the hundreds to the hundreds of millions of dollars. While these sales primarily take place at their 10 showrooms, in New York, Geneva, London, Hong Kong, Milan, Dubai, Paris, Amsterdam, Zürich, and Shanghai, Christie’s previously explored online-only sales with the auction of Elizabeth Taylor’s collection following her death in 2011.

Other major dealers, like Sotheby’s, are no strangers to the value that blockchain can bring to their industry. If other art dealers follow suit with auctions on distributed ledgers, there could soon be widespread implementation of the blockchain’s trademark security and transparency for the benefit of the art world.

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