If someone told you three years ago that blockchain-related technologies would be worth $7.7 billion by 2022, you’d frown and probably delete their contacts. Back then, the distributed ledger was famously known as the support structure behind bitcoin and other cryptocurrencies.
Fast-forward to 2018.
Blockchain technologies continue to inspire a new host of startups and business models, with Venture Capital firms pumping in over $1 billion into blockchain-based startups and ICOs last year.
Big tech firms that were initially hesitant have shown signs of long-term commitment to the development of the blockchain, with the likes of Microsoft and IBM using the technology to rejuvenate old business models and spur innovation.
And the disruption is not just limited to Silicon Valley. The real estate industry, one of the most significant consumer-driven niches in the business world, hasn’t escaped the blockchain disruption.
Traditional real estate systems are often characterized by expensive, bureaucratic, and sometimes corrupt and inefficient processes that create a challenging business environment for real estate companies and the clients they serve. With blockchain, corporations get a tamper-proof platform that is transparent, auditable, faster, and more efficient than traditional systems.
When implemented correctly, blockchain technology can be a huge differentiating factor for CEOs and their companies in the real estate industry. Here are a few guiding tips for real estate CEOs looking to stay ahead of the curve.
- Understand the tech
Almost a decade after the blockchain was unleashed to the world, and many business leaders are still struggling to understand what it is. Without fully grasping the tech, it becomes difficult to trust it, which obscures its real potential in the real estate industry.
For CEOs, CTOs, and other business leaders within the industry, education often cited as the most significant roadblock to bringing in new tech, blockchain included. And then if the mistrust and misinformation begin at the top, it’s more than likely it will trickle down to other departments in the company, making it difficult to adopt the tech.
There are tons of informational articles, online courses, and workshops that CEOs can use to educate themselves on the blockchain. Suitable examples include the Oxford Blockchain Strategy Programme by the University of Oxford and the Saïd Business School and the Blockchain University, both useful resources for CEOs looking to get acquainted with the tech.
- Find the right business process
As with many other disruptive technologies, there’s always the challenge of finding the proper implementation of the blockchain. The blockchain can be used in a variety of ways within a real estate company – from crypto-based payment systems to management of storage units, rental units, and legal documents.
As such, it’s vital for business leaders to find the right use for blockchain technologies within their real estate companies as opposed to force-fitting for the sake of becoming a mere user. Michael Sroka, CEO of Dealpath, Inc and a member of the Forbes Real Estate Council, says leaders should always focus on implementing the best and most efficient software, and not merely the coolest blockchain applications.
- Make sure your company can handle the tech
One of the most significant benefits of the blockchain for real estate companies is that it makes it easier to use and verify contracts (via smart contracts, for example), payment details, and other information necessary for transactions. However, this can’t be actualized when most of the documents in your company are paper-based.
Leaders need to ensure that the IT infrastructure in their real estate companies can support blockchain transactions. It includes the right hardware and software and robust IT policies that will provide an excellent platform for the implementation of blockchain technologies.
- Beware of compliance and regulatory issues
The real estate industry is traditionally a highly regulated industry, with multiple laws, attorneys, and legal documents going into a single transaction in many parts of the world. And while the blockchain promises to disrupt these processes, it cannot work in a regulatory and compliance bubble.
It’s up to business leaders to align their companies with existing regulations, even as they bring in blockchain technologies within their organizations. CEOs must keep abreast with regulatory developments and lobby changes within their respective jurisdictions, noting that it will take years before the folks in government institutions accept blockchain as the future.
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