Real Estate Blockchain Technology – A Beginner’s Guide

are you interested in real estate blockchain maybe you've heard of smart contracts in real estate real estate crypto and real estate tokenization but not quite sure how all of this ties together or what it is today i'm going to explain the basics from what is a blockchain how does a blockchain work and why the blockchain is so secure once i go over the fundamentals i'm going to talk about the blockchain technology in real estate the problems it solves and why this is the future of real estate this video is a beginner's guide to real estate blockchain my next video will be a deep dive into real estate tokenization so if you're interested in that then check back at our channel soon or subscribe what's up guys my name is felix chan calgary realtor and mortgage broker with the live inner city real estate team where we keep real estate simple let's go what is a blockchain before we talk about how blockchain affects the future real estate we need to first know what is a blockchain and what can be found inside a block blockchain or blockchain technology is essentially an electronic structure composed of a chain of blocks that contains information or data that is just distributed in a decentralized database or ledger where information is made public and anyone can have access to it so instead of having a single company or a database containing all the information the information is now scattered across an entire network now let's dive into what can be found inside a block each block inside a blockchain contains three things number one is the data and the data contains important information about a specific transaction such as you know the sender the amount and the receiver the second is a hash code the hash code is an identifier code of each transaction and it kind of functions like like a fingerprint that makes all transactions unique from all other transactions lastly each block contains the hash of the previous block that it's linked to now every time a new transaction is recorded or every time there's a change of information within the block a new hash code will be generated automatically this mechanism then creates a continuous chain of blocks that are all linked together starting from the original block what makes blockchain super secure in the digital world well there's three layers of security implemented on the blockchain the first security layer is the hash code so we already know what it means so let's use an example as soon as new information is added or altered within the individual block the block will automatically generate a new hash code so if a hacker wants to change the data that is already recorded within a specific block that tempered block will automatically generate a new hashcode and if that new hashcode does not match the hashcode of the block after that it's going to render the whole transaction invalid remember each block contains a hash code and the hash code of the next block so they all need to match up proof of work some people may think that hackers with the use of today's technology can quickly change all the blocks after the tampered block to make the transaction valid again wrong this is where the next level security is implemented and that is called proof of work the duration of the proof of work is unique to a specific blockchain and it can take up to 10 minutes or longer for each new block to be validated and generated so if a hacker wants to tamper with data on a single block then they would need to alter the data on all of the affected blocks within a set time frame of a number of minutes or longer for each tampered block to be made valid this system makes altering information very difficult and also makes it a super long process peer-to-peer network now since blockchain technology is a decentralized database it means that everyone can see and access all the data within the blockchain this is made possible using a decentralized network or what is called a peer-to-peer network when a block is created the block is distributed to everyone within the peer-to-peer network and is then verified by the nodes within the network to check if everything matches each member in the network then creates a consensus verifying the validity of the block this system is added in place to ensure that all blocks within the blockchain remain valid correct and unaltered as a result if a hacker attempts to distribute a tampered block in a peer-to-peer network it will be verified and then rejected by other nodes in the network if it's not validated successfully can blockchain secure our data what kinds of records do you think blockchain can secure from people especially hackers some of the things that i'm thinking of is like transaction processing business transactions management activities they're all applications that can be securely stored on the blockchain but that's just me what do you guys think what other things can blockchain be used for let me know in the comments below blockchain technology can have a wide ranging impact on the real estate industry this includes providing new ways for buyers and sellers to connect as well as solving some traditional real estate problems and that brings us to our next topic real estate problems versus blockchain applications lack of transparency versus blockchain's transparency corruption tax evasion and money laundering continue to exist in the real estate industry whereas in blockchain applications these problems can be prevented because everything is on the blockchain to see verify and trace its origins and it gives full transparency it also allows people to know and verify who did what and when it was executed intermediary fees versus blockchains low-cost fees if a person purchases a property for investment or for personal use a lot of fees will be incurred along the way transfer fees lawyer fees inspection fees these are all examples to name a few in comparison blockchain technology could reduce the responsibilities due to smart contracts reducing the fees typically required to buy real estate lack of liquidity versus blockchains liquidity today if a person wants to sell property then the seller must go through the lengthy process of finding buyers negotiating the price processing the documents and the mortgage and so on before the purchase can be finalized and paid properties can be easily traded as tokens more in this in a second and trading platforms will eventually allow sellers to tokenize their assets allowing them to treat them as stocks and sell them through token sales on a platform because the seller does not need to wait for interested buyers to prove they can afford the tokens or they don't have to wait for them to go through the entire process then the entire transaction is shortened the tokens can then be collected and exchanged for fiat currency with the buyers owning a percentage of the property other problems with real estate barriers to entry in reality the real estate market isn't available to everyone participating in the real estate market depends on a variety of factors like your net worth accreditation and other things us normal folks can buy residential commercial and industrial properties but not things like downtown buildings that are 30 stories high or special real estate like the eiffel tower now this could change in the future fractional ownership and real estate tokenization to buy income property today you need a pretty big down payment a minimum of twenty percent at least here in canada on a five hundred thousand dollar property that's one hundred thousand dollars you need to come up with however we now have the ability and people are doing it today to tokenize real estate and that's going to allow buyers to obtain fractional ownership this is going to lower the barriers to real estate investing making it accessible to anyone willing to invest in a property tokenizing real estate means turning a real estate asset into a set number of tokens so as an example if a property was worth a hundred thousand dollars there could be ten tokens worth ten thousand dollars each or two tokens worth fifty thousand dollars through the blockchain interested investors only need to access trading platforms maybe like you know a binance or a gemini to buy and sell these real estate tokens now they don't do that now but they may do it in the future or there could be some real estate only exchanges efficiency using blockchain technology and fraud prevention to reduce overhead and speed up settlement times automated real estate transactions can fully integrate within existing blockchain systems and smart contracts so as an example blockchain technology and smart contracts can also be used to automate reoccurring payments for rental properties on a monthly basis the transparency and security features of the blockchain will also prevent fraud now since smart contracts could automate a lot of the processes of buying and selling a home this could reduce the responsibilities of lawyers and even realtors do you think smart contracts can completely eliminate us entirely let us know in the comments below and the question i have too is how will morris financing work in this landscape that is something we need to figure out and it's going to be very interesting to see how all of this plays out by the way i will be coming out with a video with my take on if real estate agents will be taken out of the equation blockchain technology can be used to trade real estate in various new ways and that's what we're going to talk about in the next video which is we're going to go into a deep dive into how real estate tokenization works if you want tips on buying or selling a home check out our playlists here coming up on the screen my name is philip chan calgary realtor and moore's broker with the living state real estate team and we'll see you in a few seconds [Music] you

Channel: LiveInnerCity - Calgary Real Estate

Views: 10,878

Keywords: Real Estate Blockchain, Real Estate and Blockchain, Blockchain in Real Estate, Real Estate Tokenization, Real Estate Blockchain Smart Contracts, Real Estate Crypto, Blockchain technology in real estate, smart contracts real estate, Calgary Real Estate Agent, Calgary Realtor, Felix Chan Calgary, Jasben Lai, LiveInnerCity, Real Estate Calgary

Id: Qwk6jgE0l3Q

Length: 11min 14sec (674 seconds)

Published: Thu Jul 28 2022