It’s no secret that renting or buying a place to live is a huge expense for most people. On top of paying rent, there are also plenty of extra fees that come along with moving to a new home—from real estate agent fees to hefty security deposits. Moreover, the moving process usually involves stacks of paperwork and bureaucracy that moves at a snail’s pace. And this is all if you manage to find a suitable place that’s available and affordable.
It’s no wonder that moving homes is even more stressful than getting a divorce!
Fortunately, there’s a new technology on the block (pun intended) that could potentially change the housing market forever. Could cryptocurrency and blockchain technology be the answer to the massive housing problems the world faces today?
Housing Problems Around the World
Pretty much every large city in the world is experiencing a housing crisis right now—though some have it worse than others.
Let’s look at the United States. About a quarter of all US renters spend more than half of their income on housing, according to a 2017 report from Harvard’s Joint Center for Housing Studies. What’s more, there are currently over 550,000 homeless people in America. Clearly, there’s a huge problem here that needs to be solved.
In Israel, hopes of ever owning a home are increasingly dwindling for citizens that aren’t filthy rich. The Bank of Israel said that the country’s housing market is one of the greatest threats to Israel’s financial stability.
Much of the world shares this same issue. Just look at the UK—a record low number of affordable homes have been built in London. Availability of affordable housing has fallen from 39% down to 25% in the past 4 years.
In the words of Jimmy McMillan:
On top of housing being too expensive, the moving process can often be slow and painful. In Australia, for example, it typically takes over a month to settle a real estate transaction. It’s also not an uncommon occurrence for centralized land title databases to make mistakes and issue incorrect documents, further increasing the housing headaches.
How Can Blockchain Help?
Moving the housing market onto the blockchain could alleviate a plethora of issues that currently exist.
There are a ton of middlemen involved with the real estate process—brokers, lawyers, banks, and more—each coming with their own fees. All of these costs can be bypassed if you were to buy or sell a property over a blockchain using cryptocurrency. This means you pay less and the transaction occurs faster—a win–win for both the buyer and the seller.
Smart contracts are also a tremendous benefit to conducting real estate business with blockchain technology. Smart contracts are transparent, immutable, and trustless. This means no kinds of fraud, misuse, or manipulation can ever occur.
There’s already a handful of innovative companies utilizing this crazy new technology to transform the housing market. Just look at Rentberry, a decentralized rental platform that recently completed their wildly successful ICO, raising over $25 million in just 1 month. Obviously a ton of people agree that the housing market needs to radically change!
Rentberry is actually the very first company in the world to implement blockchain technology into the rental market. The Rentberry platform employs smart contracts between landlords and tenants, thus removing any need for expensive brokers.
Rentberry also came up with an ingenious solution to the issue of exorbitant security deposit fees renters have to pay when signing a new lease. Instead of the individual tenant having to put down a large deposit, they can opt to crowdsource their deposit with the Rentberry community. With this solution, the tenant will only have to put down 10% of the security deposit upfront. They can then pay back the community each month until it’s fully paid off.
It’s essentially a decentralized micro-loan system where everyone who participates benefits. And since everything is paid for using BERRY tokens—Rentberry’s native cryptocurrency—there’s a huge reduction in risk of fraud because everything is recorded on the blockchain ledger.
Rentberry is currently available in many cities across the United States. They also plan on expanding their services to Australia, New Zealand, Canada, and the United Kingdom sometime in the near future.
Some Countries Are Already Utilizing Blockchain for Real Estate
A few countries around the world have already taken note of how useful blockchain and cryptocurrency can be when it comes to keeping real estate transactions secure.
Sweden began exploring the use of blockchain and smart contract technology for real estate transactions last year. Lantmäteriet, the land registry of Sweden, partnered with a blockchain company called ChromaWay to test how parties to a real estate transaction could track the deal’s progress on a blockchain.
Mats Snäll, Lantmäteriet’s head of development, said:
Sweden has always been a trailblazer with regards to legislation and handling of property data. First we had the registry on paper, in the ’70s it was transferred into the digital domain with EDP (Electronic Data Processing) as it was called back then. We believe the blockchain is the new generation technology for our field of work and this project has reinforced the belief.
Sweden isn’t the only one using this ground-breaking technology, either. About a year ago, the government of Georgia signed an agreement to use the Bitcoin blockchain to verify property transactions. Over in the Americas, Brazil and Honduras are also adopting blockchain technology for real estate purposes as well.
Factom, the company working with the government of Honduras, has high hopes for blockchain improving the world:
We see a future world where fraud, corruption, and forgery are a thing of the past. We believe in keeping private data private and securing the world’s wealth because privacy and possession of property are basic human rights.
With innovative companies like Rentberry using cryptocurrency and blockchain to revolutionize the real estate market, plus a bunch of countries around the world beginning to adopt the technology to improve the security of land titles and property transactions, it’s clear that this technology is already solving some problems in the housing sector.
Will it be able to solve all the issues? Certainly not. The plethora of problems with the real estate market all over the globe are too numerous and complex for one single solution to fix everything. Yet, blockchain is definitely a piece of the puzzle in improving the world’s housing issues. How big a piece? Only time will tell … but it seems to be growing larger every single day.