News - Crypto in real estate: a trend with potential?

By Ted Maas

Crypto in real estate: a trend with potential?

Polygon (MATIC)
Crypto acceptance

Nitrogen-issues, inflation, resource shortages. The cost of new housing is rising, living space is becoming scarcer. Having a home is increasingly becoming a luxury good. In what ways can blockchain technology help with this?

The German government recently reached an agreement: from 2024, at least 65 percent of built-in heaters must be operate on renewable energy. Even though subsidy measures reduce costs, opinion remains divided on this issue. Many people simply cannot afford this conversion. Even if private investors want to invest in real estate, the market is getting further and further away from "normal people. Blockchain technology could just play a key role in this market.

Paying rent with MATIC

When you associate a property with a token, the physical value of the building is represented as a digital asset on blockchain. Tokenization not only allows an investor to proportionally invest in a building, it also gives that person access to a new global liquid marketplace that is currently primarily reserved for high-net-worth individuals. In doing so, the investor can trade a property in the form of an NFT.

Not only are owner-occupied homes using blockchain, but the first tests on rental properties are underway. Something that sounds futuristic, but is already underway. For example, the start-up BinaryX recently offered for sale some NFT rental properties in its test network. Specifically, these are villas in Bali between USD 400,000 and USD 700,000. Met can pay its rent through tokens and get proof of ownership through an NFT. BinaryX uses the Polygon main network for this purpose.

Crypto and real estate: other trends with potential

Other conceivable use cases voor crypto in the real estate sector have to do with processing real estate transactions, crowdinvesting through the purchase of so-called security tokens or the administration of rental and housing contracts. Even land registrations in state registers could be recorded through the blockchain. Also DeFi could influence the sector, for example, by trading tokenized mortgage-backed real estate securities through the blockchain.

Leveling the market with the help of crypto.

The use of tokenization in the real estate market is still far from mature. So far, it is unclear which of these options are technically feasible and suitable for the masses. Also, laws and property rights vary from country to country.

It is conceivable that more conservative countries and companies will rely on private and limited-access blockchain solutions in addition to public networks. Regardless of the technical implementation, crypto has the potential to reshape the entire real estate industry and streamline processes within it.

New business models could make both sustainable and modern living affordable for everyone, without the current intervention of multiple third parties. This is what Bitcoin was once created for. The need for decentralization and giving equal opportunity.

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