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Blockchain in real estate is a digitized ledger that democratizes access and increases trust by being a single source of truth. This has significant implications for real estate investors.

Blockchain is an innovative technology that’s positioned to change a number of different industries, including real estate. Blockchain is a digitized ledger that decentralizes access and increases trust by being a single unalterable source of truth for information. Often mislabelled as a cryptocurrency such as bitcoin, blockchain has the ability to¬†upend the real estate industry¬†in a number of critical ways.

Here’s an overview of blockchain in real estate, the use cases when buying, selling, and financing real estate property, and whether investors should explore real estate tokenization.

What is blockchain in real estate?

Blockchain is often confused with cryptocurrencies like bitcoin. Simply put, bitcoin is a cryptocurrency that utilizes blockchain as its technology to operate. Blockchain enables the tracking of transactions and records across a distributed network of computers. Blockchain increases trust as it acts as a ledger distributed across an array of computers that’s unalterable and accessible to all.

Here’s how the blockchain process works:

  1. A transaction or record is requested.
  2. This request is broadcast to a network of computers (nodes).
  3. Using algorithms, the nodes process the request.
  4. The request, which can be a currency, a record, or a legal contract, or other information is verified by the nodes
  5. Once verified, the ledger is updated with a new block of data.
  6. This block of data is added to the blockchain and cannot be deleted or altered.

As you can see, this process can have a number of real estate applications, such as legal contracts, financing, buying and selling a property, and so on. Blockchain can add an additional level of trust in a real estate business activity, such as transactions and leasing.

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