Security of trading information is the most notable feature of blockchain in real estate. How does blockchain technology bump off operational risks?
In many nations throughout the world, the land register procedure is highly complicated and inefficient, which is the main reason for the inefficiency in real estate services. Thereby, property fraud is one of the major difficulties caused by the inefficiency of land registration. The application of blockchain in real estate deals with such sophisticated transactions procedures, assures data security and protects the platform from land fraud.
How blockchain in real estate upgrade the process of land registry and wipe out fraud
The existence of intermediaries or brokers, as well as time delays, are the two biggest challenges that the land registry process is now facing. Intermediaries or brokers are the agents between the government and the buyer. In some cases, they easily commit bribery or even sell the same piece of property to two different persons. The land registry procedure takes a long time to accomplish the authentication of several documents.
Any person easily becomes depressed with real estate fraud in different ways. For instance, taking possession of the property through bribery or other illegal practices seems to be very prevalent nowadays. Once the land has been taken over, a person or enterprises may develop any real estates project such as a farm or a home on it, and register their possession of the land by their name.
Transparency in Real-Estate Blockchain
Only a few people are able to buy property directly since the land procedure is slower owing to administrative problems. However, smart contracts of blockchain technology simplify and speed up the process by automating verification for transactions. Users create a decentralized ID to sell or purchase a property on a blockchain platform. The smart contracts are activated to update the transaction on the blockchain database as soon as the registrars transfer the land to the purchasers’ names.
Secure Land Papers with Blockchain.
Printed currency has definitely experienced a dramatic decrease in value of the currency. Confidential documents, such as property papers also face the same aforesaid trouble. It is impossible for an investor to have two copies of land ownership with differing information. The non-duplicability of cryptocurrency enables the blockchain platform to solve this problem in real estate because the same bitcoin is traded for more than one transaction.
Tokenize Real Estate in a decentralized database
Blockchain is a decentralized database that serves as a ledger for a variety of transactions, most notably ownership and transactions. Real estate ownership is being “tokenized” by blockchain technology. This implies that a piece of real estate property is identified on the blockchain and split into many smaller ownership units, which are known as “security tokens.” Any token or fractionalized piece of real estate on the blockchain is freely purchased and traded.
These transactions are protected by the blockchain, which resembles a conventional chain of the title due to its permanent database of these transactions. Blockchain technology encrypts the transactions, ensuring the privacy of the parties. A decentralized network helps verify and record the transaction between parties. Property owners are able to store their real estate assets in the same digital wallet of cryptocurrency. The transfers are subsequently uploaded to the blockchain’s distributed ledger to eliminate data manipulation.
In reality, during land registration, various legal issues emerge and give rise to significant delays. With a lengthened gap between the sale of land and the registration of its possession, the risk of fraud arises. However, blockchain technology in real estate has the potential to solve the land registry’s problems. Blockchain is well known for its data security, fraud prevention due to its transparent and decentralized structure.
akaChain is backed by FPT Software, a globally leading technology, and IT services provider. It is an end-to-end, permissioned, multi-chain network based on the Hyperledger Fabric. Since its establishment in September 2018, akaChain’s product has assisted many enterprises, from SMEs to Fortune 500 firms, to transform with distributed ledger technology. The company provides a broad range of permissioned blockchain-based products and services in multiple sectors, including retail, supply chain, banking and finance, insurance, shopping mall management, etc. to transform with its distributed ledger technology. For more information, please visit https://blog.akachain.io/
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