5 Ways Cryptocurrency Will Change the World of Commercial Real Estate

The opinions of entrepreneurs’ contributors are their own.

Cryptocurrency is the hottest topic of discussion in almost every industry these days. However, commercial real estate is an industry that could be completely transformed as blockchain technology becomes increasingly popular.

In five years’ time, commercial properties will look very different than they do today. The blockchain-driven innovations in the industry are almost endless.

Third parties are no longer required

One of the defining characteristics of the real estate industry is the escrow account. Trust companies act as a third party to protect everyone involved in the transaction. They take care of all the documents and money until the transaction is complete. Blockchain technology could make this system obsolete and make real estate transactions faster and cheaper.

Blockchain technology runs on a peer-to-peer network, which means that cryptocurrency transactions are instantly recorded on each user’s computer. This creates several identical records that cannot be changed. Every transaction becomes public.

Traditional real estate transactions have taken time to keep each party informed of the progress of each part of the transaction. With the automatically updated records of the cryptocurrency, everyone involved is kept up to date in real time. You can follow the progress of your transaction from anywhere in the world.

Related: How Blockchain Enables the New Era of Digital Financial Investment

Transactions are executed instantly

Many people in the real estate industry are also frequent travelers. They need to review their investment properties and visit new locations to explore new opportunities. Traditionally, many parts of the real estate process have required the physical presence of those involved in the transaction, which can slow things down.

However, blockchain technology could completely eliminate the need for face-to-face presence in real estate transactions. The added security of the transaction could allow investors to sign contracts and transfer funds while they are anywhere in the world.

Public transactions will remove industry secrecy

The public can see most of the cryptocurrency transactions. This is a big change from the traditionally hidden transactions in the real estate world.

While some cryptocurrencies allow private transactions, a public transaction is the standard. Private transactions require opt-in and they often cost more. This will lead to a better public understanding of what is going on in the real estate world as it is common for people to fail to conform to the standard.

A public record of transactions will enable those in the commercial real estate industry to better understand the trends and thus enable better decision-making. This is especially helpful for those who are just beginning their careers. Young real estate entrepreneurs can get to know the ins and outs of the industry by simply following the action.

Micro-investing is getting easier than ever

In recent years, micro-investing has grown in popularity. Rather than funding an entire commercial property purchase through a large entity, a group of individuals can work together to fund a purchase, allowing for a much lower barrier to entry for investment.

The problem with this microinvestment is the cost of the money transfer. If there are several small transactions, the transaction fees add up. Cryptocurrency lowers these fees to almost negligible amounts, resulting in a much higher ROI on the investment.

The partnership between Bitbond and KlickOwn is an excellent example of how successful micro-investing through cryptocurrency can be. KlickOwn is a real estate investment platform that requires a minimum investment of just 10 euros. Bitbond is an online lending platform using tokenized bonds in early 2021. The partnership between the two companies enables KlickOwn investors to pay in cryptocurrency.

Wladimir Huber, CEO of KlickOwn, comments on the advantages of the partnership: “Thanks to these enormous cost savings, we can offer our investors higher returns. KlickOwn investors invest completely digitally and easily with us. “

Related: 5 Ways Cryptocurrency Can Help Entrepreneurs In 2018

The future is absolute security

One of the most exciting things about blockchain technology is that it cannot be hacked. This technology is decentralized, which means there isn’t a single point of entry for hackers. In order for a hacker to access cryptocurrency funds, he would have to hack thousands of computers at the same time.

Blockchain technology not only keeps funds safe, it also completely protects sensitive information from hackers. Internet users have seen an increasing number of data breaches in recent years, so cryptocurrency security will make real estate investors much easier than doing their digital transactions without blockchain technology.

International investments are getting cheaper and easier

International transactions can be slow and expensive. Transferring funds can either take a few days or cost a large chunk of the money. Even if you pay for the expedited payment, most banks are closed on weekends and holidays, which makes the process even slower. As any good businessman knows, time is money.

The longer you wait for your transaction to complete, the longer it will take you to start working to make a profit on your new investment. Cryptocurrency enables international transactions to be carried out instantly from any location.

Most international commercial real estate investments today involve some degree of risk. In fact, international investors began slowing their commercial property acquisition rates in the US in 2019, in large part due to exchange rate risks.

However, if both parties use cryptocurrency, the risk of currency exchange can be circumvented. This could make it much easier for investors in countries with low currencies to enter markets in countries with high currencies. It gives investors one more currency to deal with and increases their chances of being at the top.

Related: Cryptocurrency millionaires diversify into ownership.