What is Proptech?
Initiatives that aim to digitalize the real estate and construction industries by using modern UX, technologies and business models.
What is Blockchain?
Distributed ledger technology for creating tamper-proof public records of transactions by storing information pieces called blocks in a large number of computers simultaneously.
Timeline of Proptech and Blockchain
2008
Blockchain was invented by Satoshi Nakamoto for Bitcoin use.
2016
First Proptech startup valued at over $1 billion dollars was founded.
2017
Blockchain used in Proptech in Sweden.
Challenges for properties and real estate industries
Low growth of productivity in the construction industry. Productivity in construction in America has plunged by half since the late 1960´s.
Long payment terms in both real estate and construction industries which can in the worst case force smaller vendors out of business.
Inherent distrust among stakeholders. Even more so in developing countries.
Centralized and unreliable public records that can lead to fraudulent property deals or missing proof of ownership.
Both buyers and vendors in the real estate and construction industries face problems with missed production deadlines and misplaced supplies leading to trade disputes.
Can Blockchain be the answer
Blockchain allows decentralized way of storing information in consensus, thus eliminating the need for trusting a central entity like a bank or a governmental actor.
Potential applications for Blockchain in Proptech
Proof of Work
Using Blockchain to log all proof of work of project stakeholders in a real time database visible for all counterparts.
Ownership records
Blockchain could allow property deals without the need for banks as facilitators and zero loss of property ownership due to lost or falsified records.
Faster transactions
With stakeholders capable of seeing what has been done or delivered in real time, payments could be made in seconds.
API-economy
With a Blockchain based public record of property and project data, companies could safely trade data for mutual benefit and even monetize their data via a token system.
Crowdfunding
A Blockchain based property investment platform would allow new ways of raising capital for projects and give ordinary people the chance to invest in real estate assets.
Real World Use Example of Blockchain In Proptech
Swedish land registry authority is called the Lantmäteriet. Since June 2017 Lantmäteriet has been testing a way to record property transactions on a Blockchain. This could save the Swedish tax payers over €100 million ($106 million) a year by eliminating paperwork, reducing fraud and speeding up transactions.
What next?
Blockchain can make any construction and real estate project faster, cheaper, safer and more transparent that was ever possible in the past.
Blockchain is one of the best hopes for the construction and real estate industries to let go of inefficient past and start moving towards a more efficient and thriving future.
But it will take time.
About IWA
IWA is a multinational IT-consultancy with offices in Finland, Thailand and Abu Dhabi. The company designs, develops and operates advanced web and mobile services for its clients, which include corporatins, SMEs, and governmental organizations The company's clientele consists of leading players in the PropTech, CleanTech, FinTech and MedTech arenas.
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