Blockchain Technology and the Future of PropertyJames Trafford
The way in which property transactions are occurring is changing fast. The digital age is well and truly upon us, and blockchain technology represents a glimpse at the future of how property transactions will be carried out in the coming years ahead. Thanks to Blockchain technology, information can be stored very securely and accessed quickly in an open and democratised fashion.
Perhaps best known for its utility in cryptocurrency transactions, blockchain has entered popular and tech media with increasing frequency, eliciting much debate about its use and prospects. But cryptocurrencies are only one way in which blockchain can be used to help with fast and safe transactions. For example, it is already making a significant difference in high-security and data-driven sectors like finance, banking, and global trade.
As more central banks and governments hint at the introduction of central bank issued digital currencies (CBDCs), it may be the case that blockchain is set to enter every aspect of how we exchange value and physical assets on both a commercial and personal level. In other words, there may come a time in the near future when almost no human activity can be carried out without the use of digital technologies, with Blockchain at the forefront.
In addition to this, global governing institutions like the World Economic Forum (WEF) and the European Union are warning and preparing for cyber-attacks and extensive disruption, something that Blockchain can help with. This is the downside of the digital age; while it offers unprecedented usefulness in how business and other transactions are conducted, it also represents a vulnerability to a global system that is highly integrated and connected.
Simplifying property transactions
The process of buying and selling a house is complicated. Many stakeholders, including agents, brokers, conveyancers, and banks, are engaged in the process. Each link in the supply chain makes use of a variety of tools and methods to complete the task at hand.
In the buying and selling of property, a system is used to keep track of a client’s property transactions. Conveyors, banks, and brokers all have a role in the process. All of these are part of the same deal, but you wouldn’t know it since they are stored in different systems. As things currently stand, if you want to find out what your conveyancer is doing on your transaction, you have to either pick up the phone and find out or shoot an email and wait for a reply.
So, why is a call necessary to the conveyancer in the first place to find out what you need to know? Simply put, it’s because of the disparity of systems in which the transaction data is held and the lack of synchronisation across these systems. Every stage of the transaction process has been made more difficult by data fragmentation and double entry into the system.
In addition, certain aspects of the property transaction process have been digitised, while others have not yet been digitised. You must often take offline information, copy it to digital, validate it, and transfer it to someone else who may need to do the same thing. This stifles productivity and makes managing and accessing data between different systems cumbersome.
Multiple parties in the transaction chain have so many interdependent moving pieces that there is a lot of duplication of effort and a lot of potential sites of failure. And who bears the brunt of the pain? In the end, it’s all about the customer. All of this is about to change because of the advent of the blockchain.
Trust in property deals is vital
The core principle of blockchain technology is its ability to share information in a decentralised and secure way. The form of blockchain used in cryptocurrencies is called a “public blockchain,” which allows the users to hide their identities.
However, this technology can be used in different ways. “Private blockchain” allows parties to verify identities and better secure transactions, as well as provide the connectivity capability needed by the global banking structure. Indeed, hundreds of banks now use private blockchain technology.
We can now handle transactions at a level of security previously unimaginable thanks to the same technology’s function in the property life cycle.
All the data in the property lifecycle can easily be synchronised since it is connected to the same network by all parties. When one party makes a change to their system, the information on other systems that are allowed to do so is automatically updated. Anyone in the chain of command who has been granted access can read a message or a document that has been sent by one party. All of this is done with pinpoint accuracy as to who transmitted what data when. Fast, safe, and unbelievably dependable, all rolled into one.