Real estate consists of a large collection of properties, land, buildings, etc. The real estate business includes selling and buying of properties. There are four types of real estate namely residential real estate that includes new construction and resale homes., commercial real estate that includes shopping centers and strip malls, medical and educational buildings, hotels and offices., industrial real estate that includes manufacturing buildings and property, as well as warehouses and land that includes includes vacant land, working farms and ranches. As we all know having a property is a very essential thing for everyone around the globe we need to be very careful while having any contracts related to real estate as investments in such projects are very huge so is the fraud cases. In order to have safe and secure deals, blockchain technology has been introduced in this business.
A blockchain, originally blockchain is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data it is generally represented as a Merkle tree. By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks.
Blockchain and real estate
The Contract is a very important part of the real estate business, everything is based on it. The problem with contract papers is that if we don’t have legal knowledge then it’s very hard to understand the legal aspects of the contract, we can only have a formal view of the contract. Also if the person we are dealing with is a fraud then he must be knowing various methods to make edits within the contracts which could cause us long term loss.
Therefore smart contracts are developed with the help of blockchain technology it makes contract immutable and transparent and easy to understand. It is written using programming language “solidity”, which works using the IFTTT logic aka the IF-THIS-THEN-THAT Logic. If the first set of instructions is done then execute the next function and after that the next one and keep on repeating until you reach the end of the contract.
Smart contracts will protect people from fraudulent activity in the business by linking digital ownership to the property, contract, and documents directly to blockchain.