In his PropTech 3.0 report, Andrew Baum dedicated an entire section to blockchain; it was titled: ‘Blockchain is coming – get ready’.
His report tells us that, over the next ten years, blockchain will be one of the key disruptors of the property industry.
We’ve all been talking about it for some time now, but, finally, it seems we’ve reached a point where all the talk is starting to manifest.
There are now a handful of companies around the world coming to market with blockchain-infused property solutions.
Who are they? And what, specifically, are they trying to do?
The power of blockchain
Blockchain is, as Andrew Baum puts it, ‘...a form of distributed ledger technology, a distributed ledger being a radical alternative to a centralised database’. It is so very important to property for reasons of transparency, security, and speed.
It allows absolute transparency between transactors where each party has their own identical copy of the ledger, or database, rather than there being one ‘trusted’ ledger, centrally stored.
Because a blockchain is a made up of multiple interlinking transactions, any signs of fraud or foul play simply cannot go unnoticed or unreported.
Perhaps most excitingly, blockchain allows the use of smart contracts; underneath a lot of complicated technology, this essentially means that transactions can happen in an instant; mortgages, for example, can be applied for and approved at the very time of an offer being accepted. A process which would normally take weeks has been eliminated.
Central to the power of blockchain is the fact that the ledger in which all of this transaction data is kept, is truly immutable.
The whole picture of blockchain is far richer, and far more nuanced, than this, and I will be working on a comprehensive overview in the coming weeks, but for the purposes of this introductory piece, I want to avoid getting too technical.
Many companies are now operating under the blockchain banner, each one working to achieve unique objectives. Here’s a breakdown of who’s doing what and where they’re hoping to take the technology...
clicktopurchase® has recently published a press release to announce the clicktopurchase® Blockchain, which it claims is a ‘world first for property’.
(Note: the phrase, ‘world first’, is used by a number of companies in this sector; a result of the various ways in which blockchain is being utilised.)
The company has an established record of enabling property transactions to take place online through the use of digitally signed contracts. It has now launched the “clicktopurchase® Blockchain”, deploying the technology for what its press release calls ‘the most important thing in a property’s life cycle’, its purchase.
Neil Singer, clicktopurchase® chief executive, says: “When you have purchased a property using clicktopurchase®, you have absolute proof of the right to ownership.”
“When you come to sell, a buyer can completely rely upon your record. Intermediaries will have a reduced role, solicitors will have less to check and it raises questions as to the future need for the Land Registry.”
ChromaWay is a key player in the drive towards Blockchain 2.0, where blockchain becomes more flexible, for user cases beyond currency. This firm is the creator of PostChain, ‘the world’s first consortium database’, and have worked with, among others, the Swedish Land Registry, to implement smart contracts that allow houses to be bought and sold online and the data then stored on blockchain.
It is also accredited as the founder of the first ‘Coloured Coin(s)’ implementation. Coloured Coins loosely describes the methods that enable you to store physical assets, such as a property, on your blockchain. This coin can then, if required, be traded through the chain.
ChromaWay is also currently working towards building ‘the next generation protocol for Smart Contracts’.
TechCrunch Founder, and Propy advisor, Michael Arrington, recently bought a house in Ukraine. He did so for $60,000 and completed the transaction remotely. Propy cite this as the ‘world's first real estate transaction on the distributed public blockchain network — Ethereum’.
Natalia Karayaneva, chief executive of Propy, says: "I'm thrilled to see Propy leading the charge in putting real estate on the blockchain — bringing transparency, efficiency, and security to an industry traditionally fraught with red tape and bureaucracy.”
“Ukrainian real estate is very affordable, and the Ukrainian market will soon be growing dynamically. This purchase is an important signal to foreign investors — especially Chinese, who face strict capital controls of $50,000 per person — that they can safely and easily invest in this market and, soon, [those in] other countries."
Propy also recently completed one of the property industry’s first ICOs, raising $15 million in investment. ICOs are fundraising efforts made through the sale of digital tokens rather than shares, as would be found in an IPO.
Velox.RE describes itself as ‘the most accomplished blockchain real estate team, building on the most robust blockchain, Bitcoin.’ It aims to ‘truly digitise property ownership, exchange, and data’ in order to ‘enable the next evolution of the real estate industry’.
Essentially, Velox.RE focuses on smart contracts to make buying and selling property as easy as buying and selling stocks. According to its website, Velox.RE can take you from clicking ‘buy property’ to settling in ‘an hour, or so’.
It has recently completed an eight month trial with Chicago’s Cook County Recorder of Deeds.
BitFury is looking to use blockchain technology ‘to make the world a better, more livable place – for all’. It is a particular evangelist for the education of the wider world to the specifics and potential of blockchain technology.
This is largely due to the fact that its unique focus is on that of setting up and implementing blockchain technology as far and wide as possible.
The firm has built both software and hardware solutions ‘necessary for businesses, governments, organizations and individuals to securely move an asset across the Blockchain’.
From its website we can learn the four distinct tasks that BitFury believes blockchain will do:
- Open new doors for economic opportunity and prosperity
- Advance fresh applications that will further promote innovation
- Spread opportunity through transparent voting, small business ownership, land ownership,and global peer to-peer support.
- Drive the further advancement of the peer-to peer economy and the Economy of Things
These are only a few companies, the ones who have crossed my path to date. But there are plenty more.
I’m always looking to learn as much as I can about blockchain, so if you fancy a chat, or think I’ve missed an important name out of this article, do get in touch!
*James Dearsley is a partner in PropTech Consult, digital transformation specialists for the real estate sector. To sign up to James’ Sunday PropTech Review, click here.