Blockchain is a technology with great potential to transform the real estate sector in the short term, experts agreed at the PropertyEU Proptech Data & Innovation Briefing, which was held in Luxembourg last week.
‘From a technology perspective there are changes coming in all the time and the times of adoption are getting ever faster,’ said Ajay Bali, director, digital & analytics leader, EY Luxembourg. ‘Of all the innovations, I think Blockchain will be a success because it has built up enough trust now. In the next 18 months we will see a real transformation.’
Blockchain, defined as a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded in chronological order and publicly available, can add speed and efficiency to contracts and make real estate transactions faster.
‘It is a good solution because it is an open ledger that anyone can access,’ said Bali. ‘There are many projects happening right now, and Blockchain helps in terms of smart contracts and land ownership. It is based on bitcoin but people are getting used to the idea now. The concept is good, it is a trend to watch.’
Its impact will be felt well beyond real estate, said Jan Willem Jeucken, regional solutions manager, Yardi Systems: ‘‘I am very curious to see that blockchain will mean for our industry, but it is so disruptive that there is a possibility that even banks could be obsolete in ten or fifteen years.’
There are issues still to be addressed, Bali said: ‘There are many different systems in Europe, we must create the same Blockchain. Adaptability is another challenge.’
Yet another challenge is trust. ‘If Blockchain is seen as trustworthy then it will happen very very quickly,’ said Kai Braun, partner, alternatives advisory leader, EY Luxembourg. ‘The perception of safety is very important but it will be addressed through use and familiarity. Regulation will also play a major role.’
Blockchain eliminates human intervention. Like other technological innovations, it will make a lot of manual, repetitive work being done today totally unnecessary, so the bad news is that many jobs will disappear.
The good news is that they will be replaced by more interesting and stimulating jobs, said Bali: ‘Processing and calculating data that takes a human being two weeks to do can be done in two hours by automation, so the person can spend the rest of the two weeks making sense of the data instead. Repetitive tasks can be done by robots, leaving people to do the value-added work.’
Automating processes lowers cost, but it also improves quality, so there is no going back, said Braun: ‘Some professions may die out, but new ones are being created all the time. Think of the new field of cybersecurity, for example.’
Other jobs will also disappear or change due to technological innovation. ‘I would not want my daughter to be an estate agent, because I believe brokers will be obsolete,’ said Jeucken. ‘Technological change is real, it is happening now, it is picking up speed and it will change our world. Believe me, it really is not hype.’
