Solutions built around blockchain technology offer several upfront benefits, including a censorship-resistant, irreversible distributed ledger. Deloitte’s study revealed blockchain’s position as a perfect fit for real estate use cases around leasing and selling.
Blockchain innovations often outdo traditional systems by not only digitizing information but also introducing a near real-time trustless environment, among other features. Big Four accounting firm Deloitte uncovered six opportunities for blockchain to disrupt the commercial real estate (CRE) industry.
The above infographic highlights six key pain points for CRE owners when leasing and selling their properties and maintaining complex transaction data. With this in the backdrop, Deloitte noted six opportunities for blockchain to serve the industry, which include improving processes around searching for properties and allowing people to make better decisions around leasing and purchasing.
Due to paperless processes, Deloitte envisions blockchain expediting property and payment evaluations and better-streamlining cash flow management. In addition, the technology’s inherent qualities also offer cheaper means of managing property ownership history while enabling efficient processing of financing and payments.
The study reveals that blockchain technology is well-positioned to take over more than 50% of the leasing and sale process, excluding steps requiring physical intervention such as property inspection and loan negotiations. Deloitte noted:
“Blockchain seems to be most applicable to dynamically configurable or co-sharing spaces, which have a relatively higher number of tenants and shorter duration leases.”
While Deloitte’s report reaffirms blockchain’s potential to drive transparency, efficiency and cost savings for commercial real estate owners, companies and CRE owners are advised to follow a three-step approach — educate, collaborate or create, facilitate — in determining the best way ahead for blockchain implementation.
While nonfungible tokens (NFTs) have been advertised as blockchain-based technologies, experts contradict the notion.
Speaking to Cointelegraph, Jonathan Victor, the Web3 storage lead at Protocol Labs, revealed that main chains are very limited in size, which in turn makes storing data on the blockchain to be expensive. As a result, NFT ecosystems often opt for off-chain storage solutions.
Alex Salnikov, the co-founder of Rarible, confirmed the above claim as he told Cointelegraph:
“It is important to understand that the NFT living in a user’s wallet only points to the file it represents — the actual file itself, also known as an NFT’s metadata, is typically stored elsewhere.”
Despite the revelation, both experts noted that storage for NFTs can still be considered decentralized.