An apartment in the Ukrainian capital, Kiev, made history in 2017 when it became the first real estate asset to trade via blockchain, changing hands for US$60,000.
The buyer, TechCrunch founder Michael Arrington, paid for the property with a combination of two digital currencies and the transfer took place entirely online using smart contracts.
The deal was struck at the height of the hype around blockchains potential to make real estate more tradable and transparent.
But beyond a subsequent flurry of small-scale residential transactions and a number of government-backed pilot programs to bring land registries online, blockchain has failed so far to live up to the commercial property sectors expectations.
Its been very slow going with blockchain in real estate, despite it being touted as a game changer for a number of years now, says Matthew McAuley, director, global research at JLL.
As groups started to pursue blockchain-lead solutions, hurdles that emerged from the technological and regulatory, to the systems sheer permanence have yet to be overcome, despite concerted efforts.
The route to more transparent transactions
In its simplest form, a blockchain is a database of recorded transactions. Each step in a transaction is a block. Each new block is added to the previous one to form a chain. With no single party in control, the system was designed to be completely secure, with even administrators unable to change the information recorded in each chain.
The benefits could be wide ranging for real estate, not least the systems ability to authenticate and track transactions in real time without the use of a third party, such as a bank. For example, every part of a lease or sale agreement could be automated, with payments received instantly even outside of business hours.
As well as making real estate deals more efficient, this would remove some significant barriers for investors by making commercial assets more liquid and transparent.
Governments around the world are trialling the use of blockchain within land registries in the hope that recording this information digitally could reduce costs, save time and increase security across the transaction.
These trials are at a fairly preliminary stage in most cases, says McAuley.
Dubai and Sweden are home to some of the worlds most advanced applications of blockchain in real estate.
The Dubai Blockchain Strategy is actively working on a process to record all real estate transactions on blockchain and is part of a wider blockchain ecosystem that spans utilities and telecommunications. In Sweden, the government is testing transfer of property ownership via blockchain.
Elsewhere, JLLs 2020 Global Real Estate Transparency Index has identified 31 territories where there is some government engagement with the technology. Among these, the UKs Digital Street program is testing a blockchain prototype that supports the digital transfer of a property in a system that automatically updates the land register.
Putting the pilot schemes into practice, however, poses significant challenges.
Its just very difficult to implement as all of the technological, logistical and regulatory building blocks need to be in place, McAuley says.
The onset of blockchain fatigue
A Google Trends analysis shows worldwide interest for blockchain emerged in 2013, and began to grow in earnest in early 2016. It peaked at the end of 2017. Interest has since fallen back to early-2017 levels.
Outside of real estate, mass implementation of blockchain across supply chains has struggled to live up to the initial enthusiasm. A Gartner survey labelled this blockchain fatigue, citing immature technology, lack of standards and overly ambitious scope as contributing factors.
Even moving land registries online and setting up contracting systems is a major logistical challenge that relies on multiple markets having robust regulatory frameworks in place.
For blockchain to be adopted more widely, you need three things: the computing power to run it, legislative frameworks to police it, and a practical workaround for immutability, McAuley says.
One of blockchains major drawbacks is its permanence actions cannot be undone and remain forever etched into the system.
Anything involving humans will never be error free, McAuley says. But with blockchain it becomes more difficult to enforce regulatory oversight or legal judgements.
Keeping the systems that rely on blockchain free of fraud and error human or otherwise has deterred the industry.
I find it difficult to believe blockchain will be as used, or as useful, in real estate as was thought initially, McAuley says.
That said, efforts continue undeterred. COVID-19 could go some way to accelerating blockchain initiatives as the imperative for faster, remote transactions increases.
But the industry will continue to approach the technology with caution as it develops over the years ahead.
The potential is still there, McAuley says. But so are the challenges.
Click to read about what the world will look like in 2030.
Originally posted here:
- Sequence by Chain Looks to Capture the Permissioned Blockchain Market - GlobeNewswire - December 14th, 2021
- The Impact of Blockchain on the Cryptocurrency Market - Baltic Times - December 14th, 2021
- Blockchain technology should be the backbone of an e-signature solution - Healthcare IT News - December 14th, 2021
- XELS to offer carbon credit backed NFTs on new blockchain platform - PRNewswire - December 14th, 2021
- The Champions in the Blockchain - Chessbase News - December 14th, 2021
- What is Web3? The blockchain-based next era of the internet - Business Insider - December 14th, 2021
- Everse Capital launches $30M fund dedicated to Web3, blockchain gaming and metaverse - Cointelegraph - December 14th, 2021
- BSV blockchain's association signs an R&D agreement with University of Sharjah to develop blockchain-based academic certification and accreditation... - December 14th, 2021
- Peter Molyneux's Next Game Is A 'Blockchain Business Sim' Featuring NFTs Because The Future Sucks - Kotaku - December 14th, 2021
- $100k worth of coin prize is given away for all users via downloading TAGO - the World's first Blockchain enabled Spiritual & Mental Care platform... - December 14th, 2021
- Blockchain and the Future of Medicine [Infographic] - hackernoon.com - December 14th, 2021
- Binance to Set up Blockchain Hub in Singapore but Withdraws Local Exchange Application - CryptoPotato - December 14th, 2021
- Why Polygon, Silvergate Capital, and Riot Blockchain Are Getting Crushed Today - The Motley Fool - December 14th, 2021
- Global Aviation Blockchain Market 2021-2030: Increasing Adoption of AI-Based Smart Technology Creating Significant Demand - ResearchAndMarkets.com -... - December 14th, 2021
- NFTs, Crypto Wallets and More Explained by Putting My Son's Art on the Blockchain - The Wall Street Journal - December 14th, 2021
- Neowiz to bring Golf Impact and Brave Nine to the blockchain - Pocket Gamer.Biz - December 14th, 2021
- Know about the great benefits of using blockchain technology! - Cyprus Mail - December 14th, 2021
- Jeff Vinik to receive Innovation Catalyst Award at Bitcoin and Blockchain Summit - St Pete Catalyst - November 2nd, 2021
- The United States will become the global crypto and blockchain leader - Cointelegraph - November 2nd, 2021
- How to predict where blockchain regulation may be heading: an expert explains - World Economic Forum - November 2nd, 2021
- Tech 24 - How to reduce the environmental impact of the blockchain? - FRANCE 24 - November 2nd, 2021
- Blockchain for climate action must be on the COP26 Agenda - Ledger Insights - November 2nd, 2021
- Crypto payments platform introduces a solution to scalability concerns with the help from co-inventor of blockchain - Cointelegraph - November 2nd, 2021
- Inside the blockchain developers mind: What is a testnet? - Cointelegraph - November 2nd, 2021
- How CURE Is Combining Innovation, Technology and the Blockchain To Decentralize Healthcare - Yahoo Finance - November 2nd, 2021
- AWS for blockchain Alchemy boosts valuation to $3.5B with $250M raise - TechCrunch - November 2nd, 2021
- Why Hollywood loves cryptocurrency, NFTs, and the blockchain - Fast Company - November 2nd, 2021
- A play-to-earn blockchain envisions a revolutionary token economy through the perfect combination of DeFi and NFTs - Cointelegraph - November 2nd, 2021
- Nimbus Founder Alex Lemberg On The Power Of Blockchain To Create A Society In Which Everyone Is Empowered - Entrepreneur - November 2nd, 2021
- Email over blockchain: The best bad idea I've heard this year - Techradar - November 2nd, 2021
- What Happens When You Take Social Media On The Blockchain? - ValueWalk - November 2nd, 2021
- Ubisoft will seek to invest in and create blockchain games - Cointelegraph - November 2nd, 2021
- I've Spent $10 So Far on This Blockchain Game. My Assets in It Have Spiked to $17,000 - Motley Fool - November 2nd, 2021
- LinkedIn reports crypto and blockchain job listings have surged 615% since August 2020 - Cointelegraph - November 2nd, 2021
- No more waiting days for global transactions to clear, thanks to blockchain - The Straits Times - November 2nd, 2021
- The Hemp Blockchain, Inc. Chooses Algorand as Its Blockchain Platform - Business Wire - July 12th, 2021
- The future of bitcoin, cryptocurrency, and NFTs, according to 30+ experts - Fast Company - July 12th, 2021
- Its kick-off time: Enjoy Euro 2020 finals the crypto and blockchain way - Cointelegraph - July 12th, 2021
- Global Blockchain Markets 2021-2026: Analysis & Forecasts with Focus on Over 80 industries - ResearchAndMarkets.com - Business Wire - July 12th, 2021
- Users of The Graph can now earn money curating blockchain data - The Block Crypto - July 12th, 2021
- Pandemic has accelerated the rollout of CBDCs by 5 years, says blockchain firm - Cointelegraph - July 12th, 2021
- Why The Federal Reserve is Fearful of Cryptocurrency and Blockchain - TheStreet - July 12th, 2021
- Nvidia CEO Jensen Huang weighs in on the metaverse, blockchain, and chip shortage - VentureBeat - June 15th, 2021
- As blockchain becomes widely used in banking, what are its security risks? - Forkast News - June 15th, 2021
- Maiden Government Blockchain Association Ireland Event to Focus on Blockchain, Identity - Crowdfund Insider - June 15th, 2021
- 'Blockchain technology has the potential to have a greater impact on our lives than the internet' - ArabianBusiness - June 15th, 2021
- Blockchain - Wikipedia - June 10th, 2021
- Blockchain | NIST - June 10th, 2021
- Hook to plate: how blockchain tech could turn the tide for sustainable fishing - The Guardian - June 10th, 2021
- How Multifamily Investment Will Eventually Migrate to the Blockchain - Multi-Housing News - June 10th, 2021
- Chinese Officials Embrace Blockchain During Conflux-Hosted Blockchain Summit at Pujiang Innovation Forum - PRNewswire - June 10th, 2021
- Brady Dale: Blockchain Games That Gamers Want to Win - CoinDesk - CoinDesk - June 10th, 2021
- Are Developers Buying into All the Blockchain Hype? - Dice Insights - June 10th, 2021
- Blockchain for business: CoinGeek's Zurich Conference is live & free with over 100 speakers - PRNewswire - June 10th, 2021
- Caizcoin Ready to Create its Own Crypto Ecosystem based on Islamic Blockchain Network - PRNewswire - June 10th, 2021
- Blockchains role in the future of crypto - Yahoo Finance - June 10th, 2021
- BSV Blockchain for Government Initiative appoints Ahmed Yousif as Middle East lead - PRNewswire - June 10th, 2021
- China Aims to Have Worlds Most Advanced Blockchain Tech by 2025 - Yahoo Finance - June 10th, 2021
- KR1 targets the cutting edge of blockchain technology - Proactive Investors UK - June 10th, 2021
- 10 Largest Venture Rounds In Crypto And Blockchain Forbes #10 - Forbes - April 5th, 2021
- Multibridge Allows Migration to a New Blockchain With Zero Waiting Time and Downtime - Yahoo Finance - April 5th, 2021
- How Will Blockchain Technology Change the World? - The Motley Fool - April 5th, 2021
- Global Blockchain and Cryptocurrency Market Report 2021: Ukraine and Russia are Leading the Ranking of Cryptocurrency Adoption -... - April 5th, 2021
- Using the most modern technologies - AI, blockchain and Big Data, we will radically change the logistics of agriculture and fisheries! - GlobeNewswire - April 5th, 2021
- ReDeFining growth: Innovative trends impact evolution of blockchain tech - Cointelegraph - April 5th, 2021
- Riot Blockchain Records 460% Rise In Bitcoin Hashing Capacity: What You Need To Know - Yahoo Finance - April 5th, 2021
- Torum: DeFi + NFT + Social Media - the Next Brilliant Utility Innovation in the Blockchain World? Press release Bitcoin News - Bitcoin News - April 5th, 2021
- Couple gets married on Ethereum blockchain for $587 in transaction fees - Cointelegraph - April 5th, 2021
- Slogging, Blockchain, And Innovations In Crowdsourced Content: Interview With Founder Of HackerNoon - Yahoo Finance - April 5th, 2021
- SU's WiTec club to host workshops on cryptocurrency and blockchain - The Daily Orange - April 5th, 2021
- Blockchain is making its mark in sports, and there's more to come | Ctech - CTech - April 5th, 2021
- Leonard Nimoy Digital Collectibles on the WAX Blockchain - GlobeNewswire - April 5th, 2021
- NIST Is Working to Support Cross-Government Blockchain Services - FedTech Magazine - April 5th, 2021
- Blockchain Explorer - Coinmarketcap - February 10th, 2021
- Forbes Blockchain 50: Meet The Bitcoin Lovers In Corporate America - Forbes - February 10th, 2021
- Global Blockchain Technology Market Report 2021-2026: Accenture will Lead the Charge for Systems Integration and Companies like Amazon, Dell, HPE, and... - February 10th, 2021
- Global Business Automation Blockchain Technology and Internet of Things Market Report 2020-2025 with Profiles of 42 Vendors - PRNewswire - February 10th, 2021
- Global Blockchain Technology in the Healthcare Market Research Insights, Latest Trends, Major Player - PharmiWeb.com - February 10th, 2021
- COVID Spurs Tokenization via Blockchain Tech in Commercial Real Estate - Commercial Observer - February 10th, 2021
- Blockchain startup ITM collaborates with Microsoft and MediaTek to address the crisis of trust during the COVID-19 pandemic - PRNewswire - February 10th, 2021