Real Estate Investor Magazine South Africa September 2018 | Page 5

EDITORIAL VIEW
Blockchain -
Revolutionising the
real estate world
You have probably heard about ‘Block-
chain’ which is arguably the most signifi-
cant technological development since the
Internet. No central person or company
owns it. It is information stored across
a system of many computers without a
middleman. It will impact everything
from banking and payments, cyber se-
curity, internet of things such as cars
and buildings embedded with software,
communications, government bureaucra-
cy, healthcare and the way we transact in
real estate.
A key part of what makes a well-de-
signed Blockchain so incredibly secure
is the unimaginably  massive amount
of computer processing power  required
to do the math, run the algorithm and
generate a fake key that could fool the
majority of servers on a large distribut-
ed network. The three most talked-about
usage Blockchain cases in commercial
real estate are title transfers, peer-to-peer
lodging and smart grid systems.
Property title transfers requires an ex-
haustive amount of research, which
frequently includes visiting the local
municipality and combing through your
records, stored mostly on a microfiche or
photographic file. Imagine if all the com-
mercial title records in your city going
back more than 100 years were converted
to a standardized digital file living on a
Blockchain ledger? The title search would
amount to little more than plugging a
digital key into a computer, unlocking the
file containing the property’s title deed
and then dealing with any possible issues.
Peer-to-peer lodging apps like Airbnb
have already disrupted the hospitality in-
dustry. In 2015, 79 million room nights
were booked through Airbnb and only
two years later th ey are on pace to top
200 million. Experts are questioning if
the ceiling is on the horizon. How can
Blockchain change this? Each person’s
file sits on a Blockchain and instantly up-
dates when guest or host reviews are sub-
mitted, nights are booked and payments
go through. Once a guest and host estab-
lish communication through the Airbnb
app, a “smart contract” is immediately
generated. This contains each party’s up-
to-date file and allows each user to pull
necessary information, including reviews
and even criminal history. This indicates
possible red flags about a guest or host
by putting critical information at people’s’
fingertips.
Smart grid, however, could be the most
disruptive Blockchain user of all. If you
want electricity to run your home or com-
mercial asset you’ve had little choice but to
just pay. On Blockchain, eventually prop-
erty owners will be able generate actual
revenue by selling their excess electricity
directly to other users. A peer-to-peer
distribution system can’t operate on a
centralized data and transaction platform.
It would quickly get too massive to ad-
minister efficiently, too slow to process a
constant flow of transactions and too vul-
nerable to data security threats. A decen-
tralized smart grid will eventually generate
up to $7 billion per year in energy revenue
according to Goldman Sachs, of which
very little will go to a large monopoly.
To benefit we need to learn from the
people using Blockchain and understand
how this new technology will improve
and streamline our lives in transacting in
real estate. We go in-depth in part two of
our Blockchain series inside this edition
of REIM with our local Blockchain ex-
pert Werner Riekert.
Clay Christensen a Harvard Business
School professor said: “An innovation
will only get traction if it helps people
get something they’re already doing in
their lives done better.” If this is the case,
at least in real estate, we are about to see
how a single technology can revolution-
ize a multiple trillion dollar real estate
industry worldwide.  
Successful investing
NEALE PETERSEN
FOUNDER/PUBLISHER
MAHATMA
GANDHI
“
“
T
he world is changing rapidly in-
cluding business and real estate as
we know it. The speed of technol-
ogy is disrupting our old traditional ways.
It was Chinese philosopher Lao Tzu that
said, “Life is a series of natural and spon-
taneous changes. Don’t resist them; that
only creates sorrow. Let reality be reali-
ty. Let things flow naturally forward in
whatever way they like.” 
Be the change that
you wish to see in the
world.
SA Real Estate Investor Magazine SEPTEMBER/OCTOBER 2018
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