How will blockchain disrupt this US$219 trillion real estate market?
Real estate is a popular traditional investment choice which we are all familiar with — being relatively stable and gives good returns in the long-term. Despite it being an opportune investment, there are still many factors that deter everyday people like yourself from accessing this market which its market worldwide is valued at US$219 trillion in 2017, which would have foreseen another increment by 2019.
What are these factors deterring people from entering the real estate market?
Lack of transparency for the sharing of information
The validity of property data lacks transparency. Property data which is crucial to making informed investment decisions are fragmented across the globe. This results in property data being prone to manipulation due to the centralisation of information. Besides this, it leads to inaccuracies and inefficiencies in the real estate market which affect every stakeholder involved in a transaction.
High barriers to entry
With the already high costs of investments for real estates, the high barriers to entry are further amplified by loan requirements set by financial institutions, such as for stakeholders needing to have high credit scores, high amount of down payment required and more. This makes it difficult for everyday people looking for viable and good investments to obtain bank loans for this purpose.
Illiquid assets
Due to the high investments amount, investors are unable to diversify their portfolio due to the illiquidity of assets invested. This results in investors having to concentrate only on a few assets and do the appropriate risk assessments. As it takes time and careful consideration to determine their choice of real estate investment, it may result in lost investment opportunities and extended risk. Overall, the illiquid assets cause inconvenience to investors, leading many everyday people or the average man to opt for other investment choices despite its good long-term returns.
With the above factors causing deterrence to existing investors to the traditional real estate industry, technology has to come in. However, out of US$219 trillion market, less than 1% of investment was made through technology-driven platforms. This indicates the need and potential for technology involvement in this market.
Not just a blockchain platform for real estate
What fits the gap here between traditional real estate and technology would be the use of blockchain technology in this real estate market. With blockchain, it comes with transparency due to the decentralisation of data. This already obviates the possibility of data manipulation.
By being on the Ethereum platform, Kozjin uses smart contracts for the management of real estate assets and transfers. This automates the respective responses upon required or pending actions taken with validation. To put it simply, each smart contract is able to identify the action the initiator has made and execute the pending response needed upon validation of initiator’s action. For example, upon a successful transaction of property tokens, the smart contract will be able to release the ownership of a property to said payee. This eliminates any form of dealership between parties and also, saves a lot of time and administrative work.
Enabling quicker payments and lower fees
Kozjin is a blockchain platform for real estate listing, as well as a payment service. Making up the Kozjin ecosystem are the quick exchange, mobile crypto wallet and a physical bank card.
Quick Exchange
This quick exchange is what its name suggests. Providing a peer-to-peer (P2P) cryptocurrency exchange within the mobile app, it allows buyers and sellers of Bitcoin (BTC), Ether (ETH), USDT and KOZ (Kozjin token) to interact and perform their exchange of tokens.
Within the quick exchange, there is also the digital currencies exchange trading platform which will accept altcoin listings. However, within this trading platform, no withdrawal of crypto or fiat will be made available. Users will be able to convert their altcoins into one of the 4 main tokens mentioned above and perform withdrawals through the P2P exchange.
The quick exchange allows for real estate stakeholders to be able to convert their property tokens and KOZ tokens into their desired crypto and perform withdrawals quickly.
Kozjin wallet and bank card
The Kozjin mobile app which will consist of the wallet and bank card allows for quick usage of cryptocurrencies and for users to perform transactions for their investments or transfer of asset easily. By doing so, there will be no need for wire transfers which would have easily accumulated another US$100–200 for transaction fees if done locally, otherwise up to three times if done internationally.
Smart contracts
With the smart contracts on the platform, it also reduces a significant amount of time caused by delays of transactions, documentation and administrative headaches. Besides reducing contracting, execution and compliance costs, it also prevents a unilateral breach of contract, insuring both stakeholders.
