Blockchain is set to change the real estate sector much sooner than most property professionals realise. Indeed, the industry will see serious applications within the next two to three years, according to Ragnar Lifthrasir, president of the International Blockchain Real Estate Association (IBREA).
Lifthrasir was speaking during a breakfast briefing on Blockchain, organised by PropertyEU's Dutch sister publication PropertyNL at Mipim in Cannes last week.
IBREA is a fast-growing non-profit organisation with 1,700 members worldwide aimed at applying Blockchain technology to real estate transactions. Lifhtrasir (pictured right together with PropertyEU founder Paul Wessels) is closely involved in Blockchain projects in the US that he claims will transform the market.
For example, his company Velox.re has formed a partnership with the city of Chicago to use Bitcoin Blockchain to take over the functions of the Cook County Recorder's Office, the city's land registry. Chicago is the first US city to experiment with the technology and according to Lifhtrasir, one of the leading international brokerage firms in the US is closely monitoring the pilot project.
Blockchain can best be described as a digital ledger of transactions that is constantly monitored by a network of many different computers. Once a transaction has been booked, it becomes immutable and remains visible forever. In other words, Blockchain technology facilitates the possibility of digitalising documents and transactions carrying value or involving trust without the intervention of trusted third parties.
Lifthrasir claims the role of these third parties, which currently play a key role in real estate transactions, will in the future be largely digitalised. That would have an enormous impact on players such as accountants, banks, notaries, land registries and government authorities. Their role may not disappear altogether, but it will change radically.
During a well-attended panel discussion at Mipim, Achim Jedelsky of Daimler Real Estate noted that his company was already experimenting with the technology and that the real estate industry should also take it seriously. ‘At Daimler-Benz we know how new technology companies like Tesla and Google have disrupted the industry. The same can happen in the real estate sector.’
