Blockchain use cases

Real Estate

Real Estate

The majority of consumers are unhappy about the current state of affairs in the real estate industry, and that the sector has been plagued with the same problems for many years. The real estate market of today is made up of numerous segmented and autonomous networks with transactional friction and system opacity. Furthermore, the sector is somewhat resistant or failing to advance, even as other industries are implementing cutting-edge technologies and techniques.

For instance, just having the cash to buy the land is insufficient if you want to buy a new house.
There will be a lot of paperwork, background checks, and intermediaries involved in this drawn-out, tiresome procedure. It goes without saying that this will cost more money, but it will also take a lot of your time and be stressful.

The worry of seller fraud, or the act of selling a property that wasn’t originally theirs, is another concern.

UseCase

Wire Fraud

Wire fraud has become a very relevant problem in recent years in the sector. Malicious actors are able to exploit non-tech savvy users as well as take advantage of apparently legitimate listings and often go unpunished. According to the ALTA 2021 Wire Fraud Survey, one in every three real estate transactions are targeted for wire fraud. Over $9 billion* has been spent on Business Email Compromise (BEC) fraud since 2016. Real estate wire fraud alone is responsible for 16% of those losses.

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Problem

Wire fraud has become a very relevant problem in recent years in the sector. Malicious actors are able to exploit non-tech savvy users as well as take advantage of apparently legitimate listings and often go unpunished. According to the ALTA 2021 Wire Fraud Survey, one in every three real estate transactions are targeted for wire fraud. Over $9 billion* has been spent on Business Email Compromise (BEC) fraud since 2016. Real estate wire fraud alone is responsible for 16% of those losses.

Solution

Due to their high level of security, blockchain-based solutions make it harder to intercept and manipulate wire instructions in real estate transactions. Furthermore, via smart contracts and escrow it is possible to completely circumvent the problem by providing specific triggers for transactions to be executed, as well as notarizing every step of the process and authenticating it with a mix of digital identities and KYC.

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UseCase

Asset Tokenization

Significant advancements have been made across many industries thanks to digital transformation, particularly in the area of digital payments. However, the development of payment technology has also brought about observable risks for private client information. Your data becomes exposed while making digital payments since it travels through several different places. As a result, the combination of tokenization and blockchain has historically been recognized as a trustworthy method for data separation in ecosystems.

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Problem

Significant advancements have been made across many industries thanks to digital transformation, particularly in the area of digital payments. However, the development of payment technology has also brought about observable risks for private client information. Your data becomes exposed while making digital payments since it travels through several different places. As a result, the combination of tokenization and blockchain has historically been recognized as a trustworthy method for data separation in ecosystems.

Solution

Real estate assets are specifically mentioned in blockchain tokenization use cases. Applications of tokenization in real estate concentrate on using blockchain-based tokens to create fractional ownership for a particular asset. The digitization of financial instruments, securities, and digital assets may be a component of tokenization in real estate.

The Ethereum blockchain makes it feasible to program digital assets to include ownership rights and transaction histories. The rules for ensuring that the processes for issuing, distributing, and transferring assets comply with regulations are also included in the tokens. For instance, tokenization in real estate can concentrate on incorporating controls to guarantee that tokens are only transferred to specific counterparties.

Elevated Returns is an example of tokenization in real estate. 2018 saw the New York-based asset management company successfully conduct its first tokenized real estate transaction. The company has put the $18 million deal for the St. Regis Resort in Aspen, Colorado, on the Ethereum blockchain.

It’s interesting to note that Elevated Returns intended to sell a single asset that would have represented nearly half of St. Regis Resort. The business ultimately decided to sell tokens representing an 18.9% ownership stake. Elevated Returns used Indiegogo in conjunction with Templum Markets LLP to boost sales.

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UseCases

Land and Property rights

In a survey published in 2017, the World Bank found that fewer than 30% of lands are subject to legal claims. One-third of the nations do not digitally track their property ownership. This is an issue because it makes the market more unpredictable and abrasive, which puts pressure on the legal system and other government resources.

There is a danger that these documents will be lost in the event of a natural disaster, as was the case in Haiti in 2010 following the terrible earthquake that left 1.5 million people homeless and destroyed 60 years’ worth of government data.

Despite the nation’s constant efforts to be rebuilt, thousands of plots had owners who could not be located or whose ownership was disputed. These problems have not yet been resolved.

Even if such a catastrophe never happens, land register systems often aren’t very good, especially in developing countries.

It takes a very long time to register land and even to investigate ownership claims. The administration occasionally needs to dig back through several years’ worth of records and documentation, some of which might even have been hand produced. Due of this, the procedure is incredibly ineffective.

The livelihoods of those in society who are most vulnerable are threatened by this kind of issue.

The basis for constructing resilient contemporary economies is ensuring property rights and a reliable land registration system.

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Problem

In a survey published in 2017, the World Bank found that fewer than 30% of lands are subject to legal claims. One-third of the nations do not digitally track their property ownership. This is an issue because it makes the market more unpredictable and abrasive, which puts pressure on the legal system and other government resources.

There is a danger that these documents will be lost in the event of a natural disaster, as was the case in Haiti in 2010 following the terrible earthquake that left 1.5 million people homeless and destroyed 60 years’ worth of government data.

Despite the nation’s constant efforts to be rebuilt, thousands of plots had owners who could not be located or whose ownership was disputed. These problems have not yet been resolved.

Even if such a catastrophe never happens, land register systems often aren’t very good, especially in developing countries.

It takes a very long time to register land and even to investigate ownership claims. The administration occasionally needs to dig back through several years’ worth of records and documentation, some of which might even have been hand produced. Due of this, the procedure is incredibly ineffective.

The livelihoods of those in society who are most vulnerable are threatened by this kind of issue.

The basis for constructing resilient contemporary economies is ensuring property rights and a reliable land registration system.

Solution

Land titles still rely on paper records, which make them susceptible to theft, fraud, and poor management. In addition, a number of drawn-out and expensive legal processes are necessary for property transfers and permissions, which can prevent land from being used productively.

With blockchain, real digital assets can be used in place of outmoded paper deeds, and modifications are tracked on an immutable ledger that serves as a safe shared source of truth for papers between various individuals and organizations. Through the increased accessibility of transaction and property ownership records made possible by Ethereum, market transactions, investor confidence, financial inclusion, and community economic and social growth are all facilitated. Banks and business players have a fully operational blockchain-based digital land register platform, as does Sweden’s land registry authority.

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