Blockchain and cryptocurrencies: How its changing the real estate market

Innovative software and new digital workflows have changed the real estate industry significantly over the past ten years. Now it is blockchains and cryptocurrencies that are driving the next technological revolution in the real estate market.


More security and faster transaction processes

Blockchain technology and cryptocurrencies are having an increasing impact on various industries and our everyday lives. With a projected global market capitalization of around 3700 billion US dollars in 2025, the blockchain revolution does not stop in the real estate sector (IT daily, 2021).


Blockchain and direct peer-to-peer transactions offer enormous potential for further technologization in the real estate industry. Selling and buying real estate can become much more efficient, transparent, and cost-effective thanks to blockchain technology. In 2030 we will probably no longer be able to imagine having ever carried out transactions without blockchains.


Blockchain technology can be used to make centralized processes in the real estate industry, such as buying, financing, or managing real estate, much faster and more cost-efficient: Blockchains make illiquid goods such as real estate easier to trade. Blockchain-based projects along the entire real estate value chain have been around for years. In the future, it will no longer take days to complete a financial transaction process, but only seconds.


“Tokenization” of real estate

A blockchain is a type of decentralized booking system in which every user who is part of this blockchain network can view the entire database with all information chains or excerpts from it. Because the data stored in a blockchain and immediately encrypted is available to every network participant and must match the data copies of other participants, subsequent manipulation of data, ratings and balance sheets is almost impossible. Data recovery is also easy as the entire transaction history can be retrieved from any network node.


Blockchain technology enables sellers to sell a property as a whole or to “tokenize” individual parts of the property. In this way, several people can acquire digital shares in a property. Each of these persons becomes a co-owner of the property by owning the tokens. The seller can generate liquidity from his property as needed, similar to issuing shares.


The token buyers can resell the tokens profitably at any time, for example after a rise in real estate prices. In this way, the blockchain also lowers the hurdles for real estate investments by a broader audience. This is exactly what many trade apps and blockchain platforms in the real estate industry are based on. Investing in real estate is also becoming more transparent and easily accessible for small investors.


More accurate property valuations and forecasts

In comparison, decentralized blockchain technology enables the comprehensive availability of large amounts of data and current market information. Immense amounts of data such as location-related rental and purchase prices, comparative data and demand trends are already flowing into the algorithm for online property valuation.

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