Blockchain and cryptocurrency seem like the gift that just keeps on giving. Ever since Bitcoin’s inception in 2009, we’ve seen an explosion in the number of coins and use-case scenarios. According to Fortune Business Insights, blockchain as an industry is now worth more than $27.84 billion and is expected to grow to an insane $825.93 billion by 2032. That’s an unheard-of 52.8% CAGR.
Among the many factors for this speedy growth is the rate at which crypto is being adopted by various industries. Real estate happens to be one of the largest markets in America, with a market cap of $2.52 trillion in 2023. In other words, even a minor foray from it into the crypto world will be significant.
In this article, let us explore how and why cryptocurrency is going to be revolutionary for real estate.
Cryptocurrency Facilitates More Secure and Reliable Transactions
Discounting recessions and rare housing market crashes, this is an industry that millions of Americans trust. We live in times where trust is hard to win, but crypto, particularly those with the potential to limit volatility, make high-risk transactions much safer.
When it comes to real estate, security in the context of large sums is the name of the game. Conventional bank transfers have been the default means to handle transactions, but crypto can be far more secure. This is due to the fact that every single transaction is recorded on the blockchain and that record can be verified by anyone.
As you may be aware, transactions via crypto are also encrypted to such a level that makes it tamper-proof. Coins like Tron are the perfect solution for large transactions like real estate purchases. TRX offers low transaction fees and DPoS, where 27 super representatives validate transactions every six hours. Tron has seen massive user adoption growth and has a market cap of $13.20 billion as of September 2024, reported by Binance.
Tokenization Simplifies and Allows Purchasing of Smaller Stakes
Perhaps you have already heard about this aspect elsewhere, but it’s worth highlighting just how big a deal this is. Think about how most Americans purchase real estate. Generally, transferring funds large enough to purchase property is always a stressful and complicated process.
However, crypto and blockchain simplify the entire process and also make fractional ownership possible. That means you can purchase a tokenized portion of a property that you couldn’t ever dream of before. If you only have $10,000, you can now make that transaction instead of having to outright buy the entire property. This is what happens when properties become tokenized.
The tokenization of real estate is now close to a $3.8 billion market and likely to shoot up to $26 billion over the next ten years. You also have to remember that with tokenization comes increased liquidity. This means that getting into real estate doesn’t have to be a long-term, tough-to-exit thing. Make no mistake, fractional ownership is a game changer and will make a lot of people very rich.
The End of Middlemen and Confusion During Transactions
If you’ve ever tried to buy real estate, you will know how exhausting it is to keep up with agents, notaries, and even lawyers. From one perspective, they are indeed playing important roles and ensuring that a property is being correctly transferred from one entity to another.
However, you can’t deny that it can be unnecessarily complex and time-consuming. Blockchain has the capacity to address this without any middlemen. It can bypass all those pesky administrative costs, the paperwork, and the legal verification that you normally have to deal with.
This process is carried out via a ‘smart contract,’ which, as Investopedia explains, is a self-executing program. It automates the actions required in a blockchain transaction without the need for any central authority or legal system. The pros to this type of contract are massive.
For one, human error is no longer a factor, and the chance of manipulation or fraud is greatly reduced. You also can’t mess with these contracts once they have been carried out, which gives you considerable peace of mind.
To summarize, cryptocurrency and blockchain are transforming the real estate landscape as we know it. It’s bringing power and agency back to people, reducing risk, and making transactions easier and faster. It simplifies so many aspects of the real estate industry that it’s simply too good to pass up.