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How Blockchain is influencing the Real Estate Industry?

How Blockchain is influencing the Real Estate Industry?

Super Admin

19 Jan, 23

For the longest, monetary transactions have been done through the traditional way i.e., through banks. That means going through a procedure, sometimes long and tedious, to make or receive money. The procedure becomes more and more painful as the amount of the transaction increases. If you have ever tried to make a large transaction you probably had to go through a lot of paperwork. That happens mainly because there is a middle man involved in the procedure, namely the bank. The bank is responsible for making sure all the transactions happen properly. This may sound absurd to you if you haven’t gone through the procedure yourself.  However, you do have to face difficulties while moving large sums of money. That is of course because of laws put in place to make sure that the money is not being used for bad purposes. However, it still is a painful process and can cause problems in cases where the transaction needs to happen quickly. What is the solution to the problem you might ask? Well, the solution is very simple and straight forward; blockchain.

What is Blockchain?

Blockchain uses the concepts of a decentralized public ledger. This means that blockchain is nothing but a public ledger where all the transactions are stored. Since they are public, this means that anyone and everyone can view them which proves their authenticity. Decentralized architecture refers to the ownership of the technology meaning it is not owned by anyone. For example, in the case of banks, they are a in the middle of the transaction between to entities. However, in the case of blockchain, there is no third party involved in the transaction. The blockchain just makes sure that the transaction occurs and is recorded.

Why use blockchain in place of traditional transaction systems?

Blockchain saves the records in form of blocks. Every time a transaction takes place a block is created and stored in the digital ledger. The newly created blocks are stored on top of previously existing ones. A block contains the information of the sender, the receiver, the transaction and the address of the previous block in the blockchain. These blocks are available to the public so that they can be viewed by anyone to check their authenticity. Since the blocks are created on top of one another, it increases their security. In order for a block to be hacked, the hacker needs to hack all the blocks above it. This is almost impossible to happen as the block creation rate is quite fast. Thus, it is very secure than traditional ways of transaction.

Although they are available publicly, this does not mean they can be changed by anyone. Once a transaction happens on the blockchain, it is immutable. This essentially means that once created, a block cannot be changed. Apart from the reasons stated above, following are the reasons that underline the importance of blockchain:

  • No need of unnecessary paperwork to complete the transaction.
  • No need to get approvals from different individuals / departments.
  • The transaction happens much quickly as compared to banks. The transactions happen at the tap of a button whereas in banks you need to go through a procedure.
  • No need for third-party entities / intermediaries. This saves a lot of time and headache as compared to traditional banking .
  • We can automate certain tasks related to the transactions using smart contracts.

How can we start using blockchain?

In order to use blockchain we need to follow a number of steps:

  • Search the internet for the most suitable blockchain platform for ourselves.
  • Create an account on the platform of our choosing.
  • Deposit some money to get started.

In order for us to start transacting money using blockchain, we need to use a cryptocurrency. That is because, blockchain makes use of crypto currencies for monetary transactions. There are several platforms that allow the dealing of crypto currencies. Choose any one that you like and start dealing money on it. Once you have set up an account on a crypto exchange, you can start making transactions on the blockchain.

Why use Crypto currencies instead of traditional currencies?

Crypto currencies are much safer than traditional currencies. The main reason is it keeps record of all the transactions with one added benefit. Just like there is no middle man in blockchain technology, crypto currencies follow the same concept. All the monetary transactions are peer-to-peer.  This means that whenever a transaction occurs, it is solely between the two entities involved.  Crypto currencies also allow the blockchain to completely avoid the middle man as there is no bank involved in between.

What if the internet goes down and a transaction is in process? Once a transaction occurs, it is saved locally on the machine until it has access to internet again. Then the transaction is updated as soon as the device regains internet access. This means, although you can lose access to the internet, you can have confidence that your transactions will always be performed. The only condition being that the device has internet access.

What problems blockchain can solve in the real estate industry?

Each time a new technology comes, it disrupts the environment. It takes some time for it to be truly accepted. The case for blockchain technology is not much different. However, the applications of blockchain technology are already helping the real estate industry. Blockchain helps solve the following problems in the real estate industry:

  1. It helps to create transparency in the process. That is achieved with the help of public ledger. Anyone can verify the transactions that occur between individuals. This makes malpractices such as corruption very difficult. Even if they do occur, they can be easily identified. An alternative to traditional banking is cash. However, there are several issues tied with cash.
    • You cannot use large sums of cash as it is not safe to carry around millions of rupees around in a brief case.
    • You cannot trace where the cash was used. This can cause problems with government monetary institutions. Failing to provide money trail can cause legal issues for the parties involved.
    • There is no proof of the transaction. This gives more headroom for fraudulent activities.
  2. It is fast as we do not have to seek approvals from different individuals. This streamlines the process and makes it a better experience for all parties. In traditional banking systems, you can end up filling up a lot of paperwork which can be avoided.
  3. We can make transactions of large sums of money using crypto currencies without any problem. In banks, you can only move a certain amount of money at a time. After that amount is exceeded, the procedure starts to become difficult. With crypto currencies, you can move your money however you like. This freedom of spending creates ease, especially for financial activities.
  4. We can automate certain tasks related to our transaction using smart contracts. Smart contracts are basically programs that help us automate tasks in the blockchain technology. This helps in making sure that no time is wasted, and everything happens automatically. For example: We can make a smart contract for initiating property title transfer as soon as our transaction completes. In existing systems, you would need to initiate a separate procedure after completing the transaction. All of that can be avoided with the help of smart contracts.
  5. Blockchain makes the tracking of property ownership etc. much easy. Since all the information is public, any information can be viewed any time. This can help the buyer in tracking whether the property transfer process has been completed or not. Moreover, it also finds a way to address the issues with incorrect information on transfer deeds. A lot of times wrong information gets inputted during the transfer process. This calls for extra time and money. All of this can be avoided with blockchain.

How Blockchain can revolutionize the Real Estate Industry?

Blockchain can revolutionize the real estate industry in the following ways:

Real estate tokenization

In Pakistan there are very less investment opportunities. Mostly people prefer to invest in real estate as it is a tangible asset. Moreover, profit margins in the real estate industry attract many people. However, to invest in the real estate industry, you need a large amount of money. With the current condition of the economy, the inflation is increasing which is causing further rise in property prices. However, you do not need to invest a large sum of money now. Blockchain allows you to tokenize a property.

The main concept of tokenization is that a property can be made into digital tokens. Those tokens can then be traded much like stocks. The price of tokens is calculated on the basis of the actual price of the physical asset. The smaller the token the lesser the price and the larger the token the greater the price. Tokenization of real estate has the following benefits:

  • You do not need to own the asset physically. This means that you do not have to maintain the physical asset. All the trading is done online, and you can own a small fraction of the real asset
  • Since the price of the token can be very low, you can invest your money in real estate as well. You do not need large sums. You can invest a minimum amount and buy a token.

Secure and quick transactions

Blockchain makes use of double encryption whenever a transaction is being conducted. In simple words whenever a transaction takes place and a block is created, it is “locked” with two keys. One key belongs to the sender and the other to the receiver. This makes sure that the transaction is completely safe and secure. This drastically reduces the risk of fraud and corruption. Moreover, the block structure of blockchain technology reduces the risk of a block being hacked. Thus, you can sleep well at night knowing that your information and transactions are safe and secure.

With blockchain your transactions are not only secure but are completed quickly as well. That is because of its decentralized architecture. Since there is no middle man involved, you don’t have to wait on any approvals. Your transactions can happen on the tap of a button. You can check the authenticity of the transactions by viewing the ledger that is available publicly.

Automation in the real estate sector

Blockchain makes use of smart contacts that can help you in automating certain tasks. Since there is no paperwork involved in any of the procedures, you need not waste time. As soon as transaction successfully completes, you can perform a certain task automatically. This is achieved with the help of programs that execute automatically, also known as smart contracts.

With the help of smart contracts, you need not go to different departments for property transfer. Everything can be done remotely. This is an excellent way of saving time. However, the most important benefit is having an access to the transparent procedure in front of you. You can easily track the status of your property without having to leave your comfort space.

Bodla Group; what are we?

Bodla Group is the place where all your property related needs are fulfilled under a single roof. You don’t have to worry anymore since we have a wide array of services to offer. Our company is committed to providing the best services in every sector whether it be construction or brokerage. Bodla Group proudly provides the following services:

  • Real estate construction
  • Brokerage
  • Engineering and contracting services
  • Brick making
  • A complete collection of building materials

Our diversity in the real estate area speaks of our capability. This helps us ensure the quality of the products used in our projects is up to the mark.

What has Bodla Group achieved so far?

In addition to our clients’ trust and a name in the real estate industry, we have achieved the following landmarks:

  1. DHA Villas, DHA Multan
  2. Askari Colony Phase 3, Dham
  3. Construction of roads at Askari Colony Phase 3, Dham
  4. Renovation of houses at Sehar Villas, Multan
  5. Renovation of houses at Shah Rukn-e-Alam, Multan
  6. Development of housing scheme at Gulshan-e-Sardar, Multan

Last but not the least, our crown jewel Bodla Homes in DHA sector 5, Multan. The houses are built to specially bring the best amnesties one can think of in a compact form. Located in one of the best locations of Multan, Bodla Homes are great for people with lower budgets. However, lower budget does not mean you should compromise your living standard. So, contact us to book your dream house today.