The property industry encompasses a wide variety of actors and processes, across industries. Whether its land registry or lenders, agents or financial institutions, the interchange between them, is vast. The data flows in documents,emails, websites, databases, telephone and is literally a big ball of mud. There is a lot to making a sale. If an agent can pick up a phone and make a sale without email, they would. If they can make a sale without blockchain, they will. Uptake in the property industry will be hard at first, but once the hurdles are overcome and the all round management of a sale becomes halved in time and easier, the technology will be take up.
There is a lot of movement in this area. Startups and PoC projects abound, like ChromaWay, Teranet, Sweden’s Lantmäteriet and the UK’s ‘Digital Street’ is starting up. The Republic of Georgia is been heavily involved here too.
Land Registry is a natural starting point as it aligns well with colored coins and the whole assets in a blockchain methodologies. Land registry is viewed as the ownership point of property. Rightly or wrongly, the majority of startups are led to this area.
The Republic of Georgia is also extending its reach into purchasing. clicktopurchase, a London based startup, is now anchoring audit and contract exchanges in a block chain and is actively seeking to expand the blockchain to include your property data. Here, the smart contract is the logical meeting place with blockchain, hence why many are jumping to the first technologies that sound like they are smartcontract ‘enabled’, like ethereum. However, the smart contract, and a contract of sale, need not be the same thing at all. In fact, having code within the blockchain that ‘executes’ is not neccesarily the ideal architecture for property contracts. With saying this, the majority of startups think of smartcontracts as neccesary.
The mortgage process is long winded, and the promise that blockchain will come in and sweep through the financial insitutions has been made. The blockchain can make this process more streamlined and bring great speed to borrowers. Mortgages rely on the data underneath for acccuracy and good timing. If a blockchain is used from origination through to fulfillment and the data captures is transparent, open and certain, the gains to the process will be phenomenal.
Another aspect of the mortgage is the smart contract, where investors, multi-sig,securities and deposits can be smarter and secure. HSBC and Bank of China have already begun looking at home loans in Hong Kong.
The insurance industry is also a point of endeavour for blockchain thinkers. The benefits here are said to include minimising fraud and alleviated paper work. As a result, all the thinking goes directly to smartcontracts, whether this is the correct approach or not.
In the residential sector, the obvious solutions to address align themselves well with multisig technology, where 2 of 3 signatories can complete a smartcontract. Consider, the lessor, lessee and 3rd party legal representative. When a deposit is required, the smartcontract kicks in when the 3rd party ascertains that obligations have been met. Another clear winner for smart contracts?
Escalation recovery methods, supply and contractual obligations also lends itself well to the smartcontract, but it also lends itself to transparent ledgers and ‘DataAsAPI’ systems. The construction industry also lends itself well to a transparent supply chain and sub contractor system. Smartcontracts for releasing finance at stages and scheduled payments to sub contractor on conditions may all be ripe for blockchain.
BlockChain will help agents in a variety of small tasks. There roles as an intermediatory is reflected by the small but large amount of processes they are involved in. Examples of blockchain facilities for agents, include anti-money laundering, notaries, identity verifications, proof of due diligence, as well as smartcontracts for sales. clicktopurchase is already aiding the agent for Anti-Money Laundering.
Inspections and Evaluations
This area is a little overlooked at the moment, but includes all the relevant certifications, agents and properties require when conducting sales. Inspection reports can be made transparent and available, with all relevant data being moved with an asset on the blockchain to the new wallet. ie. Inspectors can be booked online and the certificate transferred to your digital asset. This can be made available on the chain.
Escrow is probably where new blockchain ideas meet their father, in the sense that digital currencies will be the predominant technology as an action of a smartcontract. Multisig technology and smart contracts will release digital currency. The idea of property contracts and execution will tie in nicely with escrow businesses.
The more general area of property is that of data companies. The ones that sell you locations, addresses, historical data and more. These companies are all going to be diving into the blockchain to mine data. The data will be public and transparent, and these companies will need to offer value, not just data, as the data is already there. This is what I call the DataAPI revolution.
The ability to send currency and make purchases on a property. This was recently done, from bitcoin to USD. A pure bitcoin to bitcoin is still to come. Financial institutions, mortgages and repayment options will need to accept the currency for this to have a great impact.
Do you know of any startups in these categories?