To gain a better understanding of the significance behind blockchain real estate companies and how they revolutionized the industry, please read on.
Table of Contents
- What Is a Blockchain?
- Using Blockchains in Real Estate
- 10 Blockchain Real Estate Companies
- Is Blockchain Real Estate Secure?
- Final Thoughts
Times are definitely changing. We can say the same for the US housing market—which also seems to be moving forward with new and efficient ways of investing in real estate. And it brings us to the topic of blockchain real estate technology.
The concept took center stage in recent years, gaining popularity among buyers, sellers, and real estate investors looking to interact and manage transactions.
Real estate investors have begun incorporating blockchain technology into “traditional” real estate, looking for a way to improve—and revolutionize—the way investment properties and transactions are handled.
So, today, we’ll talk more about the most popular blockchain real estate companies that have successfully adopted this type of technology.
What Is Blockchain?
To navigate such a relatively complex topic properly, first, we must say a few introductory words about blockchains and how they work and discuss what the main types are. It also involves looking back at history and seeing how it relates to blockchain news.
Ever since the 1900s, real estate agents have carried the title of “middlemen” regarding all interactions between buyers and sellers. Fast forward a hundred years, and it is easy to see how the introduction of blockchain real estate-based technology has changed how business is handled.
In 2009, the first version of Bitcoin—which, by the way, was also the first blockchain—was officially released. It wasn’t until 2018 that the first blockchain-only property transaction was completed, though. So, to say that the use of blockchain technology in the real estate industry is new would be an understatement.
Now, back to the definition itself.
In short, a blockchain is defined as a decentralized, digitally distributed, public ledger, similar to a typical database. The technology is known for the critical role it plays in securing data, facilitating transactions, and tracking digital assets.
So, when most people think about blockchains, Bitcoin and other cryptocurrencies are often the first things to come to mind. However, as you’re about to see today, it could also play an immense role in the real estate market.
What’s the difference between a regular database and blockchains?
The main difference is in the structure and organization of information. While a blockchain is technically a database, the information is literally “grouped” into blocks or chunks of data that are linked together.
The blocks are characterized by specific storage capacities. So, when the current block is “filled,” it gets closed and linked to the previous block, joining the chain, while a new block is formed. The name “blockchain” really tells you a lot about how it works.
It’s also worth adding that there are public, private, permissioned, and consortium blockchain networks. We won’t go into details here, but we will give you the basic difference.
With public blockchains, everyone is given access, while private and permissioned blockchains will generally be set up by the same business. Consortium blockchains are meant for businesses where all participants require permission.
How Does Blockchain Work?
With the basics covered, let’s go ahead and explain how blockchain works. The main idea of this network is for information to be collected and categorized—but not altered.
Each time a transaction is recorded within the database, it is recognized as a block of data. What’s crucial to mention here is that the transactions depict an asset’s movement, which can be either tangible or intangible.
The data is then linked to the previous block that falls under the same category. Eventually, it forms a chain of data that holds all the essential information and change of ownership.
Finally, the data blocks are “locked” within an unchangeable and irreversible chain. The last part is very important because it protects the information from being altered and tampered with in any way.
The fact that it’s impossible to “cheat the system” is what makes it so revolutionary.
Using Blockchain in Real Estate
Real estate agents and investors would rely on blockchain technology in real estate for several reasons.
But generally speaking, it mitigates the process of collecting and securing data related to:
- Title transfers
- Price negotiations
- Means of communication
The adoption of this new technology in real estate is something that will become a lot more common in the future. The reason for this is simple.
Businesses prosper from information, and in such a way, all viewers share the same “version of the truth,” which remains intact from the moment it’s recorded.
Related: Property Owner Search: A Guide for Real Estate Agents
How Does Tokenization Affect Real Estate Assets?
Before we answer that question, we must explain what tokenized real estate is. Tokenization, as it relates to real estate, refers to the process of creating virtual tokens that represent ownership of real estate assets.
The tokens are tied to the value of the physical assets—in this case, real estate—and can represent ownership in many ways. As such, the tokens allow greater flexibility and enable digital transactions.
In a way, they’re similar to crowdfunding, breaking down the investment into smaller chunks, or blocks, to be more precise.
What kind of impact does it have on real estate assets, though?
Principally, the tokenization process significantly reduces the costs involved in the creation, issuance, and exchange of assets. And since the tokens can be divided, the barrier of entry is lower—and it’s easier to adapt the assets to fit the investor’s demands.
In short, tokenization offers a solution for many of the common issues of existing real estate investment options.
10 Blockchain Real Estate Companies
Moving on, we’ll introduce you to the top 10 blockchain real estate companies that are bound to revolutionize the industry in the upcoming years.
The first on this list of major blockchain real-estate-based companies is Republic. Located in NYC, it is a financial technology business that deals with investment opportunities within the private markets.
Republic allows investors to allocate their funds towards successful investment opportunities—and provides them access to real estate, startup, crypto, and video game investments.
So far, the digital real estate company’s supported over $250 million worth of investment opportunities. It’s worth adding that many companies that work with Republic are backed by well-known “angel investors” and venture capital firms.
Second on the list of the top blockchain real estate companies is SafeWire—formerly known as SafeChain, situated in Columbus, OH.
The company is primarily focused on offering a solution to the growing number of wire fraud challenges, which are considered one of the main setbacks for real estate agents, firms, clients, and the industry as a whole. Wire fraud is IT-based fraud practiced by hackers with the intention of intercepting online transactions.
SafeWire attempts to find solutions to protect targeted real estate agents and ensure safe real estate transactions. The platform also works toward authenticating buyers and sellers in the process.
Another blockchain company situated in Ohio is Vairt.
The company is aimed at real estate investors who are interested in generating a secondary income as a part of the global real estate network. It’s a robust platform that provides a wide range of tools and resources, helping investors maximize their profits and make their plans a reality.
Vairt sources and screens investment properties by using a 100-point screening tool backed by a third-party valuator for confirmation.
What’s crucial to mention here is that, with Vairt, there’s no lock-in period; investors are free to “exit” the property at any given moment. The data-driven, highly analytical approach and long-term support offered by the Ohio-based blockchain real estate company are a definite plus.
The next on the list of major blockchain companies is RealT, located in Boca Raton, FL. The company is actually an international one, allowing investors worldwide to explore and take a chance on investing in the US housing market.
The RealT platform aims to assist investors in buying tokenized property, which allows them to access low-maintenance ownerships and cash flows.
The Florida company is based on real estate tokenization, enabling fractional ownership of assets and a secured blockchain income. It simplifies the entire process—and allows the owners to collect revenue based on token shares.
ManageGo is another NY-based blockchain business that deserves mention here.
The platform essentially leverages blockchain technology for owners of rental properties. To be more specific, ManageGo assists both owners and property managers in overlooking and processing payments, maintenance ticketing, and running credit checks.
So, ManageGo simplifies the process by offering assistance when it comes to checking the renters’ backgrounds. Tenants are required to submit their maintenance tickets online.
The idea behind it is simple. Improving the relationship between tenants and landlords.
In case you’re interested, know there’s also a ManageGo app available for download via Google Play.
Related: Landlords Ask: How Much Should Rent Increase Per Year?
RealBlocks, the sixth on our list of the blockchain companies revolutionizing the real estate industry, is also located in New York.
The NY-based company focuses on connecting investors to the leading alternative investment managers, allowing them to raise capital globally. It will enable investors to buy “fractional interest” instead of the entire portfolio. It automatically reduces fees and speeds up the entire process.
It is essential to mention that the RealBlocks platform, in particular, is considered a pioneer in blockchain networks, given that it launched in 2019. And so far, it’s made quite an impact when it comes to using blockchains in real estate.
SMARTRealty, located in Seattle, is seventh on our blockchain real estate companies list.
With SMARTRealty, the investors follow the protocols established by smart contract technology. Allow us to explain:
The platform operates by relying on smart real estate contracts associated with rental agreements and property purchases. If the protocols aren’t met, it automatically leads to termination of the agreement—which adds a layer of security.
Essentially, SMARTRealty is characterized by three major elements—contract platforms that consist of template systems, listing platforms, and the RLTY tokens used for payments.
We’re down to our eight company—Reasi, based in Santa Monica, CA.
Reasi takes pride in the fact that it’s the first end-to-end transaction platform for real estate. It deals with all elements of selling and purchasing properties.
With the Reasi digital real estate investing platform, you can finish the entire process of making an offer, buying, and then receiving the deed—online.
All the documents are digitally integrated and encrypted, allowing the parties involved more transparency and lower service costs.
Located in San Francisco, Harbor is a blockchain real estate compliance platform that specializes in dealing with private securities. And yes, it includes real estate, as well.
Basically, it tokenizes all kinds of assets—funds, real estate, private REITs, and so on—all with the goal of increasing liquidity and transparency.
On a related note, Harbor’s main services include the Digital Subscription Platform, Investor Portal and Dividends, and Marketplace as a Service—all of which can help streamline your alternative investment experience.
10. The Bee Token
Last but not least, we give you The Bee Token—also located in San Francisco—which takes on a totally different approach to blockchain-powered real estate investments.
The platform’s focus is on decentralizing short-term rentals. In that sense, it’s quite similar to Airbnb; it allows homeowners and investors to rent out their properties. But in the case of The Bee Token, they do so in exchange for cryptocurrency.
So, in essence, it’s a housing-related crypto real estate business.
You’ll be happy to know that The Bee Token’s team includes engineers from Uber, Google, and Facebook—along with a team of advisors from leading financial and tech companies.
Is Blockchain Real Estate Secure?
The final question deals with perhaps the most sensitive issue—security.
Investors will be happy to know that, due to the nature of blockchains, this type of digital real estate investing is 100% legit and secure.
If you’re not convinced about the whole “blockchain and real estate” thing, here are some facts that back up the statement.
If you’re a part of a member-only blockchain, you won’t have to worry about outside sources tampering with your data—since permission for access is required.
The information that has been “recorded” is there to stay—forever. There’s no risk of deleting the data once it’s stored. It will remain in the system permanently.
Hacking is out of the question, as well.
The networks are so well-equipped and protected that even a minor threat to the data stored requires an enormous amount of money and resources—a risk that virtually no one is willing to take.
Related: Is Real Estate Investing Recession Proof?
So, we’ve managed to explain the significance of blockchain technology and list the ten major blockchain real estate platforms that are bound to make a huge difference in the real estate industry.
Now, here’s our final take on choosing to take this digital route while researching the housing market 2022.
If you’ve been considering this type of digital real estate trading, you must first understand the essence behind blockchains and how they work. These databases are designed to store all information regarding real estate transactions.
This business is thriving—and the number of companies dealing with real estate through the blockchain is on the rise, too. We’ve listed the ten most popular ones that provide different services to issuers and real estate investors—but the list will keep growing.
It’s crucial to remember that blockchain real estate is secure. Your information is permanently stored—and there is no risk of anyone altering or deleting it.
If you are interested in purchasing an investment property and, at the same time, making use of blockchain networks, you should consider using Mashvisor’s Property Finder. With the Property Finder, you’ll have a chance to explore different profitable markets across the US.
To start using Mashvisor’s real estate investment tools, sign up for a 7-day free trial of Mashvisor.