The use of blockchain in real estate will revolutionize the construction industry. The number of blockchain applications is increasing over time. We will experience the blockchain technology all around us in the near future. This article will discuss “How Blockchain will transform the real estate?”
Blockchain in Real Estate
Blockchain technology is one of the most devastating forces of the past decade. The blockchain record, the ability to enable and protect large and multiple transactions raise an interesting question. Whether the same distributed ledger technology that supports Bitcoin can better execute strategic projects in conservative areas such as construction, involving large Contractor and subcontractor teams as well as extensive building codes, safety regulations, and standards?
“We are increasingly focusing on the time and place we need to compete and what we can share and collaborate,” said David Bowcott, Global Director of Growth, Innovation, and Insight at Aon Global Building and Infrastructure Group.
Using blockchain automation contract processes and paperwork to support these complex projects can save money, free up valuable resources, and accelerate project delivery. (Unless otherwise stated, quotes are from interviews we conducted as part of the study.)
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Blockchain-based real-estate development projects
In commercial real estate, HerenBouw in Amsterdam is applying the blockchain to large-scale development projects in the Port of Amsterdam. According to Marc Minnee, founder of Propulsion Consulting, HerenBouw’s goal is to build a project management system that supports blockchain to increase the efficiency of the building development lifecycle.
Minnee’s HerenBouw blockchain application focuses on registering transactions at legally binding moments where accuracy and audit trails are critical. “The blockchain provides a platform to clearly chain work products and makes everyone responsible for completing critical tasks,” Minnee said.
The benefits of the system include timely information, clear communication and fewer errors. “Stakeholders have a clear and evenly distributed motivation to register these facts on the chain: either you can’t get what you order, or you won’t get paid,” Minnee said.
They also built trust and reduced friction in mutual business processes. “Stakeholders spend more time discussing the creative design and build method options.”
Blockchain pilots in construction achieve liftoff
Aon is a global risk consultant for the construction industry, and he estimates that 95% of construction data is currently lost when handed over to the first owner. Briq, a California-based blockchain company, is demonstrating the potential to capture and protect building project documentation in blockchain ledgers, which can be navigated as deliverables and delivered to owners.
Briq worked for Gardner Builders in Minneapolis and developed a new office building “Digital Twins”, each with a room-by-room inventory. “When you need to find a product or specification in a building, there is still a place where you can directly search the actual content of the building,” said Briq CEO Hamsam Hamdy.
Blockchain coding specifications are granular paint color, ceiling fixtures, LED bulbs, door hardware plus manuals, warranty and service life, and countdown clocks that building owners can monitor.
“Any improvement and refurbishment of the building can be recorded, and if the asset is sold, the entire repository can be transferred to the new owner,” said Brilis Growth Marketing Director Ellis Talton. In other words, the building owner can get a life ledger of everything that happens in the building.
Overcoming cultural obstacles
Excessive practice in the construction industry may extend the widespread adoption of blockchains. “The construction industry is technologically advanced in many ways,” says Briq’s Talton. “But this industry is based on relationships. There are many family businesses and private companies. The choice of contractors and subcontractors can be based on relationships that have existed for decades.”
Talton also pointed out that there is very little investment in managing early-stage contracting and technical infrastructure for complex building projects – less than one percent of revenue (compared to 3.5% to 4.5% for aerospace and automotive). “The vast majority of project costs are in the construction process, including people and materials,” he said.
Sweetbridge CEO Scott Nielsen (one of us – Tang – is a consultant) found that building is a natural choice for blockchain-based project management: “The project is well structured, based on contracts. The goal is clear – on time, by specification, And avoid rework.
Classic project management techniques are still effective, but projects can benefit from a more decentralized and agile approach where transparency is high and parties can compensate for results and work.
Blockchain Applications in Project Management
Over time, the blockchain will have a groundbreaking project management application. We encourage organizations to explore and capitalize on this potential. Here are a few steps.
Determine the use cases used by the blockchain. Looking at success depends on mobilizing resources across corporate boundaries; where identity, contracts, and payments must be audited and protected; and the origin and ownership of assets must be tracked. Here are some ideas:
- Tracking subcontractor deliverables’ credit ledgers can help identify reliable subcontractors for a project.
- Smart contracts that identify accountability and trigger milestone-based payments can automate the protocol.
- A blockchain application that aggregates data into a shared project management dashboard can help manage workflows.
- Distributed General Ledger records all building inputs and assets, including warranty and maintenance checkpoints.
- Applications that support blockchain can track materials, tests, and results against building codes and standards to simplify inspections.
I hope this article will help you understand the applications of blockchain in Real Estate. Share this article with your friends to let them know about the uses of blockchain in construction and project management.