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The Incoming Use of Blockchain Technology in the Property Industry to Increase Speed and Efficiency
The word blockchain is rapidly taking hold in the modern vocabulary, particularly in the business setting. The average person, if they do not particularly know the meaning, will at least recognize the term from the many headlines on a variety of news sites. The meaning of the word, however, should become common knowledge for the average citizen, not just a recognizable word.
Blockchain constitutes a valuable advancement of technology that could become indispensable in the business world, particularly in the method of transactions in the coming years. The property industry is no exception to this wave of blockchain. Indeed, a handful of national governments have begun taking steps to implement blockchain in their own operations. Given the rising popularity of blockchain, it is important to understand the basics.
To put it simply, a blockchain is a database that is spread out through a number of different servers or computers, comprised of multiple sets of blocks. These are secured by cryptography within the chain, hence the name blockchain. Each block is preserved as a new block is added, making a permanent and unchangeable set of data. This helps to secure transactions and prevent manipulation. This also creates an easy to verify public database to create full transparency. The encryption process involved in blockchain makes it difficult to add incorrect documents or information, implementing a cryptographic key to add a new block.
This idea dates all the way back to 1976, at which time it was proposed in a research paper. However, few took the idea seriously at the time. It was then thought of as far too complicated and entirely insecure. In 2008, though, a change took place, setting the stage for the introduction of cryptocurrency, via Bitcoin. The implementation of blockchain in this new concept showcased the security and effectiveness of the idea. In the area of cryptocurrency, blockchain has been essential to the growth of the industry and success on the whole.
Why use it in property?
The use of blockchain gives the property industry a method to increase both the speed and efficiency of the transaction process. The transaction takes place in an open-source, peer-to-peer network throughout numerous servers. Validation is done by the network, and a block is immutably attached to the chain. This eliminates fraud, as all information is fixed in the network.
Now, making fraudulent transactions nearly impossible, this eliminates any possibility of record manipulation. This would go a long way to take out a massive estimated mortgage fraud of around $1 billion a year.
The sort of security blockchain would offer would all but take out entirely any need to worry about the lender being cheated or manipulated. Furthermore, the current process is often extremely complicated and lengthy, creating a daunting task for all those involved. With blockchain, however, the entire process could be entirely reduced down to a mere matter of seconds or less, rather than hours or days.
With the outdated state of the many systems in the property industry, a transparent upgrade like blockchain would be a massive breath of fresh air. Not only that, but the implementation of blockchain would also create allowance for greater accountability and even greater social impact. Furthermore, transactions are incredibly simple to trace in blockchain, requiring one to only trace the ledger to find the transaction. Blockchain also takes out any requirement for a third party for security. The encryption component of blockchain allow a variety of parties to agree on certain rules and facts. The system then easily allows anyone to check and ensure the accuracy of the rules in the database. Thus, the danger of false statements being made, or previous statements being altered is entirely eliminated.
Blockchain is an exciting new system of technology that is growing in popularity. Many industries are already seeing the value of such technology and implementing it as soon as possible. The property industry should act quickly so as not to be left in the dust with an archaic system of transaction and verification.