Blockchain technology is making waves around the world. While most of the attention has gone to cryptocurrencies such as Bitcoin, the reality is that the technology behind blockchain has the potential to significantly disrupt a wide range of industries.

Indeed, blockchain’s ability to act as a fully secure ledger means that tech innovators are looking to use these platforms to record any information that could be considered valuable.

Even things like birth certificates, insurance claims, IP rights and ownership titles could potentially be recorded in the blockchain, ensuring greater data security while also allowing for global transactions that aren’t slowed down (or made more expensive) by middlemen.

So how does this have the potential to impact real estate? A closer look at the innovations taking place in the shipping and logistics industry help shed further insight into how global real estate could soon be transformed by this new technology.

The Benefits of the Blockchain

To best understand the potential benefits of blockchain, it helps to see them in context. For Brian D. Evans, CMO of ShipChain, the efficiency of blockchain further illustrates many of the inefficiencies in current logistics practices.

“In shipping, billions of dollars are lost each year due to cargo theft, delays and even unnecessary middlemen driving up prices,” he explains. “This ultimately hurts sellers, consumers and carriers alike.”

Blockchain changes things, however, by allowing the transaction to be managed in a digitally created smart contract. All aspects of the transaction are digitally tracked and recorded, from the moment a shipment leaves the factory to when it arrives at a customer’s door.

Smart contracts can even be set up to establish recurring transactions (like repeat shipments or a mortgage payment), holding funds from the buyer in escrow until the other stipulations in the contract are fulfilled.

“When managing a transaction through the blockchain,” Evans says, “there isn’t the risk of someone tampering with the data and saying a shipment is somewhere it’s not, which often happens with paper ledgers. The information is updated and publicly validated through code every step of the way. Using a smart contract to monitor the transaction builds trust and prevents these costly losses.”

With a decentralized platform managing the contract, the risk for human error and fraud are dramatically reduced. This increased transparency and the automation of many tasks associated with the transaction can ultimately improve efficiency and lower costs.

In international logistics, this translates to faster deliveries and a reduced risk of fraud or human error negatively impacting the supply chain.

Blockchain and Real Estate

So how do these principles carry over to real estate? Naturally, the first thing that comes to mind is in the way that global real estate transactions are handled. Many high-end buyers have already made purchases using cryptocurrency, especially those who live in countries with higher interest rates.

While many of these transactions have required the conversion of Bitcoin to traditional currency, the end result has been consistent: the use of cryptocurrency eliminates many of the complications associated with international real estate transactions.

Currency conversions, transferring funds to foreign banks and overseas mortgage regulations can be quite tricky to navigate, driving up costs and causing it to take several months to complete a transaction.

Bitcoin transactions, on the other hand, are near instantaneous, allowing for the rapid completion of a sale. There is no need for third-party verification, as this is processed by the blockchain itself. Depending on the countries involved in the transaction and the price of the property, using blockchain could help buyers save tens of thousands of dollars in additional fees.

As with logistics, however, this simpler sales process isn’t necessarily where blockchain will have the biggest impact. “Blockchain can essentially serve as a public database,” explains Evans. “The information is written in code once the contract has been verified. You can’t go back and change or delete information later, which is a serious risk with older recording methods.”

In real estate, this could prevent the possibility of fraudulent land transfers, double spending or even the sloppy record keeping that contributed to the 2008 financial crisis.

This authentication also eliminates the need for notaries and other middlemen that are typically used to verify transactions. Because data is encrypted on a network of several computers, the information isn’t at risk of being lost or hacked, either.

The end result? As in shipping and logistics, incorporation of blockchain would allow secure transactions to take place, while simultaneously streamlining the buying process and reducing fees and other expenses — particularly when an international property is involved.

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What Comes Next?

Blockchain doesn’t merely have the potential to disrupt the global real estate market. It already is causing change in the way people handle the buying and selling process.

Though the technology is yet to gain widespread acceptance in the real estate industry, it is clear that the transparency and security of blockchain, as well as its potential for streamlining transactions both locally and internationally, is making it more appealing to buyers worldwide.

As consumer interest in Bitcoin and other cryptocurrencies continues to grow, you can be certain that even more buyers and sellers will wish to use the blockchain to handle their transactions. Are you ready for the challenges and opportunities this will bring?