You can study for a test months or years in advance, but it’s all for naught if you flop when exam time comes around. This is the dilemma that all blockchain-powered real estate platforms will face in the near future — does all this optimism actually result in platforms that add value to the real-world marketplace?
Real estate insiders know ways that work. It’s hard to argue against “if it ain’t broke, don’t fix it.” If blockchain-powered real estate platforms and services are going to get their foot in the door, the proof of value is going to have to be convincing, maybe even overwhelming.
This will require education, quick results, and ultimately more money in the pockets of real estate professionals. The same goes for convincing buyers that blockchain services are a suitable way to buy a house, get a loan, or invest in a property. Executing all of these factors properly won’t be easy. Blockchain bluster is so loud and widespread that pitching a new service is likely to be met with skepticism, raising the burden for proof of value even higher.
1. Jonathan Chou, CEO and Co-founder of Bee Token
“The number one challenge is the amount of infrastructure that needs to be built to make everything seamless. People in the real estate industry are not against the use of new technology as long as they end up getting cold hard cash. This means that we need better liquidity to ensure that we can properly convert digital currencies to cash.”
2. Perrin Quarshie, CEO and Founder at RealBlocks
“Large-scale transformation is always a difficult journey to embark upon, especially in industries that are so established and resistant to change. Real estate is an industry that definitely relies on a traditional way of doing things. Therefore, it’s imperative to show the value of blockchain in order for the technology to actually be adopted in the mainstream. Ultimately it comes down to solving problems that actually exist in the space, instead of creating solutions for problems that aren’t affecting the bottom lines of organizations. Once blockchain companies can point to real-world examples of improving business processes and minimizing inefficiencies, the rest of the industry will want to start adopting the technology.”
3. Paul Hagey, Executive Editor at T3 Sixty
“The main challenge is that it is such a new technology that real estate – and the industries it works closely with to get homes sold including mortgage, title and insurance – have yet to prove out exactly what applications offer the best use-cases. Another challenge is the lack of standards within real estate; blockchain thrives on data – when data doesn’t translate well, blockchain applications are hampered. Thirdly, some of the more obvious applications for blockchain, such as secure title, require significant governmental and policy changes that are largely unrelated to any particular technology.”
4. Ali Tumbi, Founder of Global REIT
“In order to fully realize the potential for blockchain technology to revolutionize the real estate industry, we need greater adoption by government regulatory bodies, as well as robust regulations from legislators.
This will allow for all transactions to be conducted on the blockchain in a safe and efficient manner, increasing investor confidence and increasing adoption from other real estate companies, driving the real estate industry worldwide to new heights.”
5. Mike Cagney, CEO and Co-founder of Figure
“As with most transformations, it’s demonstrating that it works with live applications. The tendency has been to do “proof of concepts” in parallel. But that violates the underpinning philosophy and value of blockchain–that it is the sole source of truth. If you create both a blockchain and paper version of the truth, you’ll never be able to rely solely on the integrity of the smart contract (for example.)”.
6. John Kang, Co-founder and CEO of Reasi
“People generally only want to transact in US dollars, and blockchains were designed to be separate, so therein lies an inherent friction in bridging the two worlds. Today’s exchanges take 3-4 days to buy or sell US Dollar tokens, which is not acceptable when people can spend their US Dollars today. If financial transactions can’t occur solely on the blockchain, we won’t be getting the most out of what this technology can offer, which is a true P2P transaction.”
7. Piper Moretti, Founder and CEO of the Crypto Realty Group
“Educating the benefits to the end user. There aren't many real estate professionals on board yet, and that's mainly because it's more of a concept to them.”
8. Edward J. Tolchin, Principal at Offit Kurman
“Real estate professionals have been doing business the same way, for the most part, for decades, or for a century in some ways. Inertia is difficult to overcome. But, once the pendulum begins to swing in another direction: watch out.”
9. Mike Liddell, CEO of AssetBlock
“There is a fear of volatility and security for those unfamiliar with the blockchain space. If you can prove there is value and stability to both investors and real estate professionals, then you can draw in those that are currently skeptical, non-participants.”
10. Itzik Spitzen, CTO and Co-founder of LeasePilot
“The biggest challenge to blockchain adoption in real estate today is the lack of reliable data and the ability to collect data. The main value proposition of blockchain is making trusted data available. In the real estate industry, much of the valuable and needed data is hidden within documents like lease agreements. There is no accurate or efficient way to extract that data. The industry must find better ways to capture reliable data. Only then it can add layers of trust through technology like blockchain.”
11. Greg Bohenko, Acquisitions Manager at Samuels & Associates
“The people which includes the property owners and the governments that regulate it. I say the people because the owners of real estate have a standard operating procedure and it’ll take not only innovation in technology but innovation in the thought process of the owners. The larger institutional players are starting to wake up to the opportunity of blockchain and they’ll be responsible for setting the standard for the industry. I think the ultimate adoption by the mass market of the technology will come as local regulation mandates it and that could be the greatest challenge. Real estate is local and regulation can be hyper-local which will make this a slow adoption process. Mass adoption in an archaic will be the challenge.”
12. Jitesh Keswani, CEO of e-Intelligence
“The major challenge in adopting blockchain is that it is a technologically-difficult task of shifting state-controlled title transfer and land registration from a database to a distributed ledger system.
Moreover, the adoption of blockchain in the field of real estate is subjective to legislative changes, standardization, and education around blockchain concepts so that every stakeholder can understand each stage of the transaction.”
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