IS FUTURE TOKENIZATION OF PROPERTY MARKET something we should all be aware of?
TOKENIZATION OF REAL ESTATE, A POSITIVE OR TRIVIAL APPLICATION?
Today @creativeblue has a pleasure to introduce amazing piece of work by @ulqu3 related to topic which we found very important: tokenization of property market. | source |
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If there's anything the bear market has shown us, it's that a lot of cryptocurrency projects are not ready to be feasible alternatives to the conventional/fiat way of doing things.
Too many white elephant projects have left the market saturated and ultimately resulted in the decline of investor confidence. Throw in some ego and infighting and you are left with a devastating domino effect that has seen the entire crypto ecosystem shed about 83% of its value in less than a year!
Naturally, the most prevalent question in the minds of all crypto-faithful is HOW DO WE STOP THIS?
Many options have been put on the table
- Ban Crypto Altogether!
- Regulation
- Security Token Offerings
I think we will all pass on option 1. Crypto is here to stay and even though it's not perfect(yet), it has many advantages over fiat that are simply too important to ignore.
Regulation aims to protect the interests of investors but at the great cost of decentralization.
Security Tokens do offer a bridge between regulation and decentralization. While some compromise is expected it does make the climate safer for the investor and protects them from fraudulent projects. The downside of STOs is that it somehow limits crypto to only securities or digital certificates representing a certain monetary value.
The blockchain can do so much more than that.
In this world of modernization, a new use for the blockchain has emerged. TOKENIZATION OF ASSETS
I would like us to discuss that.
Remember Cryptokitties? Digital pets that could be trained, nurtured, evolved and traded? The process of interacting with these pets is done via little transactions. Now if we can represent pets with cryptocurrency, why can't we tokenize things like toys, or cars, or houses?
Using Proof of Asset (PoA) Protocol, it is possible to digitize assets of value (such as a car, a farm, a house) and trade them on the Ethereum blockchain or any other blockchain that is compatible.
Remember that blockchains are in a nutshell, distributed databases, allowing us to store information in a way that is secure and publicly accessible. | source |
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This is a step up from the conventional system of everything going through a central clearing house.
During my research, I came across a project called Brickblock. Basically, they are an Infrastructural Development project aiming to merge institutional real estate investment management with the benefits of blockchain technology.
In laymen terms, they will use software(blockchain) and legal framework to digitally represent real estate via tokens.
Now these aren't your normal hashed or mined tokens. these are one-time minted Non-Fungible Tokens. The term Non-fungible Token (NFT) means a token that represents something unique. NFTs are not interchangeable.
When applying tokenization to Real Estate, the NFTs will each represent a particular house/piece of land or property and only hold the value the owner has decided to place on them. Non-Fungible Tokens fall under the Ethereum Standard ERC-721.
WHAT ARE THE BENEFITS OF TOKENISING REAL ESTATE?
Disputes over land and property are not news to any of us. In fact, great wars have even been fought over land. The blockchain offers immutable and transparent record and evidence of true ownership.
The blockchain will increase the ease of access for different classes of investors and transparency in global real estate markets.
Imagine being able to buy a piece of land in Tokyo from the comfort of your Manhattan Apartment.
No more long paperwork, no more land settlements with hostile locals, no more government officials to act as middlemen and charge you fees. | source |
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The tokenization of real estate can lead to a whole new era of investment. For example, with Brickblock, you invest in tokenized real estate assets with Ether (ETH). When the asset is fully funded, the smart contract issues investors Proof-of-Asset (PoA) tokens proportionate to the amount they invested. source
This means you can be a part-owner of a building or structure as well. Imagine being the part owner of a prestigious Stadium or a Skyscraper or even the Eiffel Tower. This is called a CROWD INVESTMENT as even strangers can collectively fund an investment. However, if the asset isn’t fully funded by the end of the funding period, the funds are returned to investors’ Ethereum wallets.
How do Proof-of-Asset (PoA) tokens work?
Every asset will be sold through a smart contract platform that will issue its own unique Proof-of-Asset (PoA) token. PoA tokens will be sold during an asset’s funding period and represent all the economic benefits of legal ownership. That means PoA token holders will be legally entitled to the profits of the underlying asset. The profits will be regularly paid out to investors’ Ethereum wallets. source
One thing that remains unclear is how the legal framework will be integrated into the Real Estate investment. Also, the scope of "investment" would differ from project to project. While some may offer outright ownership, others may offer the opportunity to "invest" and collect profits from the use of the property. I'm not quite sure you can just buy properties in other countries without the government of that country having a say.
One must keep in mind that depending on your geographical region/jurisdiction, there may be taxes involved after converting the profit(to fiat).
SHARE YOUR OPINION
- What do you think about the tokenization of Real Estate?
- Do you think it is something that the government would support?
- How do you think tokenizing a piece of land you own would benefit/hinder you?
- What Use Cases can you see that may have been overlooked?
Author: @ulqu3
Dear @ulqu3 and @everyone else reading my comment
I've been researching for quite some time about future of STO (security token offerings) and I came several times accross idea of tokenizing property market. And to be honest I don't know what to think about it.
Most of us already understand the difference between "housing market" and "property investment market".
How will tokenization of property market impact both of those markets in most popular places? Like Mumbai?
In my opinion we will witness even more empty appartments, which are being nothing but investment. At the same time prices in prime locations will increase most likely to the point that REGULAR JOE will completely not be able to afford.
I think that inequality in those prime locations and living standards will change immensly.
Yours
Piotr
There will certainly be a transition period. I believe, as other other areas innovate, like transportation and ability to earn, tokenization of real estate will mature. While this is probably far down the road, asset-backed tokens will demonstrate what is possible and begin to open the eyes of the world.
In the coming years, projects like JPMorgan Coin, IBM and Oracle's blockchain investments, and Amazon cloud services, will spur interest. It will be more of a follow the leader type of thing until the generation that grows up with blockchain makes its use comfortable.
I doubt blockchain will be used for anything like twitter (crypto-kitties) for much of the population over the first five years that every phone comes standard with a blockchain app. But then, quickly we will see a global (not nation or great firewalls) shift. Making things real creates real change.
Hey @crypto.piotr,
I came across this platform sometime back in Oct or Nov 2017 I guess. I am not really sure though. Brickblock is conducting their pre ICO during those days. I was excited about the idea after going through the whitepaper of this project. As far as I remember I will put the information here.
This project works like an apartment. In Apartment there will be so many flats. Each flat is owned by a particular individual. And they have their own rights. Apartments have different rules compared to individual houses. In the same way Brickblock will find a property which is for sale. That will be kept on sale for token holders. If the token holders are interested they can invest like 1000 dollars or what ever they desire in the form of BBK tokens. It might be of any amount. This will go on till the property acquires full amount. So technically here the property will have multiple owners depending on their investment. So if they want to rent out that property they will be getting rent as per agreement and for the individual part.
Coming to the legal implications BBK has separate legal cell which will handle these things initially before auction and they will keep the property or land for sale.
I hope this clears the confusion.
What I would like to see is the investing into the development of housing projects where rather than just buy and sell, the tokens own a stake of the property itself so that investors carry liability. If the development is not done well or not demanded, the investors lose out. However, this can also be used to build all kinds of developments and get projects up and running faster than currently.
I agree. this would force innovation, raise the standard of housing and raise competition. Which in the end, would benefit the person occupying the house.
Dear @tarazkp and @crypto.piotr
Starting from this point, it would also be very beneficial for investors. since they would also have a tangible asset under their investment.
This is what crypto needs to start doing, buying back into the real world with crypto, not cash.
Ok.Like @crypto.piotr, I am also a bit ambivalent with the whole project because:
Pros:
But, the downsides are:
Why not just do a rent to own program for now just to see how things are in real time?
Dear @tarazkp
Thank you for sharing your thoughts on this particular topic. Seriously appreciate it.
ps.
I NEED YOUR HELP :) Nothing serious really. But I still hope you can spare few minutes of your time :)
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Which brings me to my next question, I was wondering if I could count on your support? At this stage I would only need to ask you to comment this post and suggest myself for the contest. Perhaps you could also make another suggestion: @ help.venezuela (this is run by my dear friend @ achim03).
https://steemit.com/dpoll/@theycallmedan/20k-steem-delegation-poll
This is just a first round attempt. I hope we can make it to second round hahha :) Naturally I would appreciate if you could ask your friends to help with our little "quest" :)
Let me know what you think? Perhaps you can also share some advises and hopefully we can "do little bit of brainstorming". Would be awesome to win :)
Yours
Piotr
Seems this page takes too long to load for me, and it doesn't show the comments.
Hi Piotr Sir,
The problems pestering the investors during the purchase of either a plot of land/independent house/an apartment are many. If they're not aware of the cheating practices involved in the buying and selling of properties, they will be losing their hard-earned money just like that.
I would like to tell you one mind-blowing case that shook our state top to bottom and the purchasers of a prime property in T.Nagar as well. The strange thing that happened and that needs special mention here is that the very same property has been sold to five different parties and queerest thing worth mentioning here is that all of the five parties involved in the purchase of the same were given five original documents for that very same property!
I checked with the net to get more details, but couldn't get it. Instead I am posting another link which explains about the property fraud extensively.
[https://www.google.co.in/amp/s/m.timesofindia.com/city/chennai/south-chennai-is-hub-of-property-fraud-in-city/amp_articleshow/65919840.cms]
If the STO is adopted with full force, then we can put a full stop to all these sorts of malpractices once for all!
I just read your amazing comment @marvyinnovation
Thanks for sharing your knowledge and for your effort.
yours
Piotr
Notwithstanding the speculative wave that is bound to occur if tokenisation of real estate really takes off, the pros outweigh the cons when you consider the immense benefits offered by a transparent process and the elimination of cumbersome paper work and agent fees.
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Dear @investprosper
Thank you for sharing your thoughts on this particular topic. Seriously appreciate it.
ps.
I NEED YOUR HELP :) Nothing serious really. But I still hope you can spare few minutes of your time :)
I found out about great contest where winning community can receive a year's delegation worth of 20k SP!
I realized that receiving such a delegation could help greatly to grow our community. After all I'm upvoting each valuable comment. On top of that, I'm doing my best to promote quality content published by other authors and again: I like to reward those who engage with those authors.
I know that it's probably a long shot and most likely our community won't stand a chance in this contest. But I love being the underdog! Let's give them a fair fight :)
Which brings me to my next question, I was wondering if I could count on your support? At this stage I would only need to ask you to comment this post and suggest myself for the contest. Perhaps you could also make another suggestion: @ help.venezuela (this is run by my dear friend @ achim03).
https://steemit.com/dpoll/@theycallmedan/20k-steem-delegation-poll
This is just a first round attempt. I hope we can make it to second round hahha :) Naturally I would appreciate if you could ask your friends to help with our little "quest" :)
Let me know what you think? Perhaps you can also share some advises and hopefully we can "do little bit of brainstorming". Would be awesome to win :)
Yours
Piotr
Absolutely @investprosper. There is no second thought about it.
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Great comment @crypto.piotr. The biggest problem I can see if it comes to tokenization of property market and STOs is that this "revolution" is charged with very serious restrictions. We all love crypto because it is something independent of the whole system, banks and governments. The decentralisation is real and everyone can feel like an important part of the blockchain.
If it comes to securities, I am afraid that this "spirit" of crypto is lost. We need to fit into all regulations, blacklist users from certain countries due to the law and collect data about them through KYC. I know some of these changes are necessary, but I have the feeling that we are further and further from the vision of Satoshi Nakamoto.
The article assumes that local laws and regulations will be bypassed. I don't see that happening because of things like laws against tax evasion and the necessity to maintain public titles. So, I don't see the speculation developing as a result of the privatization of ledgers.
Still, there is room for tokens to simplify and publicize now opaque processes and reduce transaction costs. In fact, publicity will reduce money laundering and capital flight. Dictators and their cronies won't be able to purchase foreign properties unnoticed.
One problem I haven't seen addressed is liens like mortgages and legal penalties.
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Dear friend @crypto.piotr, In that aspect I totally agree with you, and I think so, for the following reason: The world as a whole still does not fully manage tokenization, that is, only a small percentage of citizens in the world are adopting is a form of currency, which would leave without options to a large number of people around the world, who would see how a few investors who have large fortunes in cryptocurrencies are still taking over the planet.
With this I do not underestimate the opportunity that this technology represents for all, and the opportunities it gives you to be decentralized. Being honest, I think it would be some time before a project like this represents investment opportunities for all and that there is equality.
I would also ask: What regulations would there be to recognize a property that I bought in another country if there is a claim? Would there be a physical support (documents) to prove the property?
Forgive me if the questions seem vague and you do not understand much, but it is the doubts that I have.
Pr E-V
I agree with you about it adding to the empty apartment problem. Beijing and Shanghai are full of apartment buildings that many people cannot afford and are also not bringing in money to the owners other than speculative house flipping. If tokenization of real estate occurred, especially with ICOs on real estate, you would likely see a major boom in the contruction industry, but it would likely result in another bubble.
I only owned a house once for a brief time and hated it. I don't really follow anything about real estate and have very superficial knowledge of crypto issues. I think it will be a fight to remove government control from any facet of life, but it can not happen too soon.
Agree with your opinion and i have another question.
How they can sell a property example somwhere where you cant sell?
Example philippines is also one of those countries where foreigners cant buy a land. Funny stuff you can buy a condo if it is on stairs😁
So i think this can work maybe but not now for sure.
Plus whe i wrote the example about eifel tower 😂😂 just i remember the guy who scam with it and sold it few times😂
So i really dont know. Interesting topic and i bet it is a good idea but not yet.
Everything have a right time.
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Regards @crypto.piotr
I think that we are thinking to far away :-) As long as people will not be willing to invest in a token, let s say like this one: https://tronscan.org/#/token/1001897 LNToken that sustains not only the art/artists but the most important the charity causes, we cannot talk about changing the World through implementation of cryptos inside the real estate space.
Too much speculative state of mind in this sector and also, how ever, the cryptos are something inevitable and futusistic that might give the people the glimpse/hope of having a better World, on the other hand or the opposite side of this story, imagine that even at this moment most of the people, expecially those from India, and other places arround the World with the same traditional habits, has not even heard about cryptos, or at least visa cards ... even if now we're assisting of a sort of decentralization in some places in Africa, where after the disaster will occur and wipe out those old properties, maybe through the new technology of cryptos, the new futuristic buildings will appear with the big whales investors.
Let's not forget that through steemit, Nigeria, for instance is one of the biggest middle state between producing a high percentage of the steempower and also the new possibility of being the opened mind crypto state of Africa where the real crypto estate will grow in the next couple of years ... just saying ;-)
Meanwhile, i do think people should not think to tokenize their minds too much :-) Platforms like tronscan is a good start, but not in the way of entering only the dapps world, i mean when you're creating your own token with a purpose ... as i've mentioned above, for instance, this one https://tronscan.org/#/token/1001897 will or could be able to invest in max. 5 yrs.in building real houses based on cryptonian earnings, but first let's see the investors :-)
After that we can talk about how the old real estate and its old habits will be changed, so the " Regular Joe" will afford an appartment, but of course by that time evryone will even work as a salary for some crypto currency :-)
Regards to you all.
LNToken https://tronscan.org/#/token/1001897
@luciannagy,
Wonderful reality check. I agree with you 100%
"......even at this moment most of the people, expecially those from India, and other places arround the World with the same traditional habits, has not even heard about cryptos...."
it's hell yes and here we aren't done away with our traditional habits and suffering a lot from the consequences (cheating through various ways) that arise aftermath.
let's think generally forgetting the boundaries.
if we don't give way for a change, then how can we put an end to the current state of perils we are undergoing in the traditional process of buying/selling in the real estate.
Adapting ourselves to a "change" to a new thing is painsome at the beginning, but in the long run, I hope this will turn out to be a BOON to all of us. Isn't it?
Wow. Thank you for this brilliant comment @luciannagy
Appreciate it a lot.
Yours
Piotr
What changes is the effort put into buying the property. And perhaps the feeling of a secure deal the buyer has. What else? This is what I can see but I am shortsighted in this.
Fractional ownership is the future of much of finance because the Internet has shown the world something new. In the past, before the digital revolution, we would sift through book. Reliance, or trust, would need to be places on experts to maximize time.
The Internet made possible the specific search of words and targeted information. Now we can be certain of what is and is not contained in a resource. While it will require AI to determine the more important breadth of content, this searchable info is a great advance for all of society.
Blockchain is data management. The Internet was information (data) dissemination. ::Cough:: Imagine blockchain with out dissemination (distribution). Fractional ownership and crowd funding can be compared to the search-ability of information.
While most people will have no use for actually using their 'stock-like' PoA tokens for anything but value, those that do will drive the Information Age toward the Web of Value (Internet [3.0 ]). These value users will make blockchain the new gold standard.
Consider my usage of the searchable Internet of info for the term "fractional ownership". Besides myself, it was only mentioned by 2.21.19 by @definethedollar in referring to solar wind farms. Well, fractional ownership of these farms could be a way to by solar panels and instead of sitting in a stockroom, be put to use.
Another way to use blockchain's fractional ownership is to purchase areas of a mall or real estate development. Whether physical locations are specifically tagged or a certain percentage to use an area with ownership functions, tokenization represents a more efficient, practical, and useful way to treat illiquid assets.
Neat topic @creativeblue. Those with money and power realize what is going as is demonstrated by their private blockchains. One can only wonder how good an investment private effort will turn out once the world's blockchain chain replaces Internet Protocols. These private blockchain may be the tech goliaths of the future or represent the demise of long establish companies.
Dear @creativeblue, i remember when i was young that real estate market was drived by a kind of piramidal system where there was in special tourism area like Canaria islands, S.Domingo, Baleari islands some pour people engaged to find possible customers with the promise that you could by 2 weeks of vacation every year for all life long whatever you want by this real estate piramidal system.
There was a very big affairs about it because seems that who drive this business was something connected with criminal associations and use very strange methods to convince people to buy this package even with ipnotize or give drug to make them confused and more easy to let buy it.
Of course what you are talking about is not that kind of business, but what @crypto.piotr say is something connected with it and i think house property must be keep in the hands of each government because of taxes and ownership regulations...
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This is actually one of those places where crypto can massively change the game. I've seen how buying and selling of property work and it's a nightmare. There are so many inefficiencies and it looks like almost nothing had changed from the colonial times except for some electronics.
Lots of people are going to hate this because lots of middlemen are going to be left dry and consumers are going to benefit a massive lot. It's going to involve more work than buying purely virtual assets such as @steemmonsters But the amount of costs spend on companies and lawyers can be saved which could easily free up at least tens of billions of USD for other tasks making the world a more efficient and therefore a better place.
BTW @crypto.piotr sent me :-)
That was already discussed by Greek technologist Andreas M. Antonopoulos. He said....which products or services can be traded with bitcoin? Answer is everything. And also who can have his own coins? Everyone! But people around the world have to accept the fact, that crypto currencies are already changing their life (even if they dont have a clue about it)
In 1950s....people were in same denial about credit cards as they are today about the blockchain. When they saw mastercard the forst time, they said : "this piece of plastic is not money! Get away!" :D
What I want to say is....blockchain is just making another step in monetary revolution. And sure....real estate will be tokenized. Like everything else. If government will not support it, people will still trade houses or flats in crypto currencies. Your name is registered in town hall only as new owner.
I think security tokens will be the next big ICO craze...whether or not that is “good” for the the economy or the cryptosphere remains to be seen.
I think tokenized real estate is a great idea that can open worlds of investment opportunities...I especially see fractional ownership of solar or wind farms paying out proceeds in proportion to ownership...
As far as private property, not so much; would have to be all or nothing tokens...could make recording property transfers quicker and trustless and help to resolve disputes...so actually a good idea too, just not fractionalized.
STO will certainly add viability to blockchain. ICOs were always a tentative thing meant to help usher in blockchain innovation. Maybe STOs will just be a top level transition for the Web of Value with ICOs being practical for anyone with a smartphone.
It would be prudent to coin the term "hardwalletphone" or simple walletphone at this time.
It's me again @definethedollar
Thx for your previous comment. I always appreciate the fact that you're so very supportive and reponsive. Respect for that.
ps.
I really could use YOUR HELP :) Nothing serious really. But I still hope you can spare few minutes of your time :)
Can you open this post and write a comment: "I nominate @crypto.piotr and @help.venezuela?
https://steemit.com/dpoll/@theycallmedan/20k-steem-delegation-poll
We've a chance to win 20k delegation (for 1 year) and I hope I can count on your support.
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Piotr
Done 😃
Hi @definethedollar
It's me again :)
Please don't forget to help us :)
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Another 3 exciting days to go in front of us :)
Allow me to remind you link to vote:
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Please vote on "SteemChurch". I would appreciate your support a lot.
Yours
Piotr
If cryptos actually had a countervalue like real estate, it would definitely be conducive to the security of money. However, I don't think it fits into today's economic system because it would severely limit growth or an enormous inflation would be the alternative.
It's me again @siphon
Thx for your previous comment. I always appreciate the fact that you're so very supportive and reponsive. Respect for that.
ps.
I really could use YOUR HELP :) Nothing serious really. But I still hope you can spare few minutes of your time :)
Can you open this post and write a comment: "I nominate @crypto.piotr and @help.venezuela?
https://steemit.com/dpoll/@theycallmedan/20k-steem-delegation-poll
We've a chance to win 20k delegation (for 1 year) and I hope I can count on your support.
If this link is taking to long to open, then try other one: https://steemit.com/dpoll/@crypto.piotr/re-theycallmedan-20k-steem-delegation-poll-20190218t101355371z
I would appreciate :)
Piotr
thank you my friend, i need to read more about it, as soon i read the all document i will share my oppinion
Here in Amsterdam the hosuing prices already sky rocket, which is a very bad thing. They simply don't build enough houses! How I would do it, crowd investing, give away tokens, then sell or rent the house to someone. Sale price = divided among investors who hold tokens. Rent = divided among investors who hold tokens, on a monthly base (simply when the rent has been paid). This would make it interesting for me :D
Still you need to pay a lot of taxes for the property you own, the rent you get is your income so taxes again... where is the benefit?
As I understand the city of Amsterdam is even forcing owner of houses to rent their houses to "refugees" if they like it or not.
If the city takes your property because you refuse to agree with it... you really think there is some benefit in it for you? Everything is registered.
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Dear @ambr.global
Thank you for sharing your thoughts on this particular topic. Seriously appreciate it.
ps.
I NEED YOUR HELP :) Nothing serious really. But I still hope you can spare few minutes of your time :)
I found out about great contest where winning community can receive a year's delegation worth of 20k SP!
I realized that receiving such a delegation could help greatly to grow our community. After all I'm upvoting each valuable comment. On top of that, I'm doing my best to promote quality content published by other authors and again: I like to reward those who engage with those authors.
I know that it's probably a long shot and most likely our community won't stand a chance in this contest. But I love being the underdog! Let's give them a fair fight :)
Which brings me to my next question, I was wondering if I could count on your support? At this stage I would only need to ask you to comment this post and suggest myself for the contest. Perhaps you could also make another suggestion: @ help.venezuela (this is run by my dear friend @ achim03).
https://steemit.com/dpoll/@theycallmedan/20k-steem-delegation-poll
This is just a first round attempt. I hope we can make it to second round hahha :) Naturally I would appreciate if you could ask your friends to help with our little "quest" :)
Let me know what you think? Perhaps you can also share some advises and hopefully we can "do little bit of brainstorming". Would be awesome to win :)
Yours
Piotr