Perhaps you’re not quite familiar with the term ‘blockchain’, but you’ve no doubt heard of Bitcoin, right? Well, Bitcoin is the cryptocurrency that revolutionized an entire financial industry. Though it’s still early and there are doubts about how much of an impact Bitcoin, Ethereum, and other cryptocurrencies can have on a global scale, one thing is certain: it’s already altered the landscape of global commerce.
What appeals to so many people around the world about cryptocurrency is that it completely bypasses the traditional financial institutions and allows people to exchange goods and services (buy and sell) without having to gain permission from a credit card company, bank, or even government agencies.
In some cases, people can have access to items sold in another country and legally purchase them using cryptocurrency, even if those items are illegal in their own.
A Self Regulating Currency
Therein lies a major crux of the problem … a lack of regulation. However, Bitcoin and other cryptocurrencies utilize a form of technology called a blockchain. In this ‘blockchain’ is recorded all information necessary to verify a transaction (or long series of transactions, thus keeping track of each ‘coin’) and ensure legitimacy.
In other words, within the confines of cryptocurrency’s blockchain technology, there is virtually zero risk of fraud and abuse. Theft can occur, but not as a result of the blockchain technology, but rather a failure to secure ‘cryptocurrencies’ at an individual level.
Now, some within the real estate industry are looking at how blockchain technology could revolutionize that sector as well.
Real Estate Transactions Minus the Lawyer
At the moment, when a person seeks to purchase a new property, they make an offer or accept the deal presented. They work with a financial expert and legal representatives (lawyers) who specialize in real estate. There are forms and papers to sign, fees to cover, and everything has to be monitored so the transaction complies with every facet of the law.
Lawyers can cost a fair amount for just about any transaction. So can notary publics, who are often required as witnesses to legal documents of some nature.
Contained within a blockchain is often a host of information about the transaction itself. While the nature of these blockchain contracts will still need to be meted out, there is strong belief that basic and ‘smart’ contracts could soon be legally recognized as legitimate when conducted via blockchain technology, with or without the need for a high-priced attorney creating the necessary forms.
Currently, contracts cover a wide range of meanings. For example, a ‘verbal’ contract or understanding or agreement between two private parties can be -in terms of a court proceeding- be deemed just as viable and binding as a signed document, so long as there is solid evidence pertaining to the agreement. Two people don’t need a lawyer to make some informal arrangement that would hold up in court.
These issues, though, are often sticky in nature and difficult to prove without written documentation. Blockchain could alter that completely.
Imagine a small business beginning to expand and decides to purchase a new property. The business owner and property owner decide to make this arrangement through a form of cryptocurrency.
All the details of the transaction are embedded within the blockchain technology of that currency and once the appropriate funds are transferred through that cryptocurrency, ownership changes hands, and it can all be legally binding, without any requirement of lawyers being involved.
Both parties are protected by blockchain transactions.
Consider other applications for blockchain technology:
- Intellectual property rights. Because a blockchain is irreversible, there is a secure, time-stamped record of first-use, which makes it easier to prove intellectual property rights.
- Public records. Governments have long been hampered in their efforts to maintain accurate census records, especially over time. Blockchain technology could impact that, helping these government agencies maintain accurate and secure public record files.
- Consumer transactions. More and more businesses are turning to cryptocurrencies for a number of reasons. Sure, the avoidance of traditional banks, credit card processing fees, and more is appealing, but it also provides a solid, irreversible means of protecting the transaction itself.
- Service contracts. Selling services, like products, are a crucial component for many entrepreneurs and businesses. However, most of these contracts are written and overseen by lawyers. Blockchain technology could make the need for legal representation with most of these contracts no longer necessary.
Most people are still getting their proverbial feet wet within the realm of blockchain technology and don’t have a clear long-range focus or vision regarding what’s possible. Yet, as cryptocurrencies continue to evolve and infiltrate a growing range of e-commerce options, even moving into the brick-and-mortar facet of business, blockchain technology is showing itself to be a critical component of future transactions.
While there may be limited opportunities for the average business right now, when the Internet was in its infancy, most businesses didn’t know what to do with it, but those that saw the possibility in it gained the most early on … the rest played catch up.
Blockchain technology could very well has a similar revolutionary impact on business platforms, dealings, and transactions, too. That’s why it’s crucial that any serious business owner, leader, or manager take this technology seriously. It isn’t going anywhere and as more people become familiar with it and understand its power and potential, it truly will shape another revolution within the business model.