Although still in the early stages, blockchain and cryptocurrency have the potential in the coming years to change the way real estate is bought and sold.
The first potential change is if cryptocurrencies, such as bitcoin, become more prevalent and are eventually accepted as a form of currency to conduct transactions. Stories of real estate transactions in bitcoin have hit the press, but are rare. In one such instance a buyer made 1.3 million during the transaction process because bitcoin had appreciated roughly 25% during the time they were under contract! Though fun to read about, the volatility of cryptocurrencies will need to come down to become more popular in everyday transactions.
Besides buying property with bitcoin, new technologies such as smart contracts will be used in different ways to increase the security and reduce the hassle of real estate transactions. If you are not familiar with them, smart contracts are computer protocols that help to secure and enforce the performance of a contract.
For example, capabilities of smart contracts would allow for deposits to be automatically transferred at the time of contract signing. The broker would no longer have to pick up checks and deliver them, and the money would be verified instantaneously. This is because smart contracts live on the blockchain, which are secure by design. In the blockchain each block of data is built from a previous block, which creates a record of what has occurred.
Blockchain technology can also be used in a way similar to crowdfunding. People could join huge groups of online investor networks, and each person would have the power to vote on which real estate opportunity to buy or sell. Complete transparency of where the money and profits are going would all be possible.