Chain reaction: blockchain in today’s real estate market
In the 20th edition of The Wealth Report, we’re revisiting our predictions over the years to see how they’ve fared.
AI looks set to unlock the potential of blockchain in the property industry.
Excitement about blockchain鈥檚 potential to disrupt investment and real estate grew in late 2008, including discussions in The Wealth Report.
The predictions were twofold:
- Transactions would increasingly become encoded on blockchains
- This would enable fractional investment in large assets like real estate
There have been plenty of pilots from governments and start-ups, but such initiatives haven鈥檛 yet entered the mainstream. 鈥淭he predictions didn鈥檛 play out, at least not yet,鈥� says Mats Snäll, a senior adviser at Sweden鈥檚 Agency for Digital Government. 鈥淏lockchain has always been regarded as 鈥榰nexplainable鈥� and, so, untrustworthy.鈥�
The problem with physical assets
While blockchain is good at tracking digital financial assets, it鈥檚 less good with physical assets.
When trading tangible assets, an external body still needs to ensure the state of the blockchain accurately reflects the state of the world, undermining the entire endeavour.
鈥淏lockchain will probably be transformative in the long run, in the short run it hasn鈥檛 been,鈥� says Andrew Baum, founder of the Oxford Future of Real Estate Initiative.
