Harnessing Blockchain’s Potential for Real Estate

It is a mantra heard time and time again in the burgeoning cryptocurrency community, and one echoed even by titans of global finance like Goldman Sachs:

‘The Blockchain can change…well everything.’

The distributed public ledger technology created in 2008 as the backbone of Bitcoin is heralded as a foundational technology, and in 2017 alone, hundreds of companies have proposed blockchain ideas across almost every industry imaginable and have collectively crowdfunded billions of dollars.

But amidst this rush to adopt and innovate around such a dynamic new technology, it can be difficult to sort through the noise. Which of these projects will actually come to fruition? And more broadly, which industries would actually benefit the most from blockchain solutions in the near-term?

The real estate sector is one of largest industries in the world, and presents myriad use cases for immediate implementation of blockchain technology.

Globally, these include:

• Registering, documenting and enforcing land titles (particularly useful for the developing world)
• Paperless land transfers
• Removing the need for costly middlemen like notaries, inspectors and appraisers
• Transactions backed by programmed smart contracts rather than pure trust
• Vastly reduced fraud risk

But for all the ways blockchain can upend the industry as a whole, it is actually the rental real estate market that may see the most immediate impact. The rental sector is huge — over a trillion dollars a year is spent on rent for housing and apartments worldwide — and particularly antiquated, with payments and documentation often done by hand and requiring costly intermediaries like brokers and notaries.

For this sector, Blockchain offers:

• Seamless and automatic payments
• Programmatic security deposits & escrows through smart contracts
• Reduced rental fraud
• Digital Identification including hassle-free background and credit checks
• The capability of building a record of creditworthiness that extends beyond national borders
• Internet of Things capabilities — Smart Digital Locks to automatically unlock a property if a reservation has been confirmed

Let’s think about how the entire tedious rental experience could transformed.

As Dror Poleg of Rethinking.RE points out in his article “Space-as-a-Service: Powered by Blockchain”:

A single digital (trans)action could trigger the booking, a reputation-based approval, the payment, a smart deposit, and the issuance of a key that is valid only during the booking period and allows access to a furnished apartment in the real world.

That last point captures Blockchain’s mind-boggling potential: The contract is no longer something to be followed by action; the contract is the action. Smart contracts don’t just make it easier or faster to book, confirm your identity, put down a deposit, pay, and receive a virtual key — it collapses all of these steps into a single, irreversible event.

That’s right — much of the needless structural friction and bureaucracy in the rental process is just that: needless. Blockchain has the potential to reduce what can sometimes be a multi-week process down to a few minutes.

Stayawhile & Blockchain: Building a Global Rental Network

The budding international interest in blockchain technology is also of inherent value to companies like Stayawhile that aim for worldwide expansion.

Crowdselling Stayabit tokens to citizens from all over the world allows us to build a community of supporters who have an inherent interest in seeing the company succeed and expand to the corner of the globe they call home or wish to live. By building membership privileges and voting rights into our smart contracts, we’ll be able to immediately adapt our expansion strategy to directly meet the desires of our customers.

Many of the most irksome friction points in the rental process are only exacerbated for international renters who often lack access to proper paperwork and documentation and are thus subject to discrimination from institutional landlords.

Utilizing a token system, we can sidestep these roadblocks and offer our international customer base a way to easily rent beautiful spaces to live wherever they so choose, directly in line with our company mission to create a world with fewer borders.