How Bitcoin & Blockchain Technology Are Changing CRE

By Turner Levison  Posted September 25, 2017  In Commercial Real Estate Commissions How Bitcoin & Blockchain Technology Are Changing CRE2017-09-252017-08-25http://commissiontrac.com/wp-content/uploads/2016/10/ctlh.pngCommissionTrachttp://commissiontrac.com/wp-content/uploads/2016/10/ctlh.png200px200px 0 0 Blockchain — the technology underpinning Bitcoin and other cryptocurrencies — is already slowly changing the landscape of CRE for the better. It’s still in its infancy, but once it reaches full bloom it will be nothing short of revolutionary. Here’s why. What is Blockchain? First, let’s establish what this technology is and how it works. Information is typically sent over the internet in packets. A block is a series of packets, and can be anything from an email to a transaction record. The chain, in the meantime, is the code that links those blocks. Unlike a normal database, where bypassing a single layer of security is often sufficient for access, each block in a blockchain is individually encrypted, and multiple copies of each chain are made to prevent alterations and add another layer of security. Who’s On Board? This isn’t a pipe dream. Major economic, technology, and CRE concerns are already providing input and support, including Cushman and Wakefield, Deloitte, IBM, and KPMG. What Are the Benefits for CRE? A recent post by Cushman & Wakefield Boston points up some of the potential benefits of blockchain in CRE. They posit the following: Security: The elimination of paper deeds, automation of payment collection and processing — complete with audit trails and compliance checks — and self-balancing accounting systems cut back on the potential for abuse, fraud, and manipulation. Accountability: Electronic records for each point in the chain — brokerages, clients, and tenants — give instant access to credit history and key financials. Versatility: Beyond its financial uses, the same blockchain technology can also be used to monitor and adjust key building systems without human intervention. How Far Away is This? Stephen King, founder of Rex, recently spoke to Roman Reyhani to discuss the platform that Rex is currently developing. Rex uses a distributed and decentralized computer network — breaking key data down into localized silos — to control scalability and cost. The proof of concept has already been presented, an ICO launched, and an initial user community built out. That suggests that this technology is closer to everyday use than you might think.   A complex and wide-ranging platform, Rex is being envisioned and built from day one as a global network, backed by IFPS and Etherium. While it will still be useful for local concerns, it’s also flexible enough for brokerages that service clients across borders. A team of brokers, regulators, and attorneys is working alongside the developers to ensure the right balance of transparency, regulatory compliance, and functionality. Are You Ready? Blockchain isn’t vaporware. The promise should, by now, be obvious. What’s less obvious is about to become very apparent: blockchain is already in use, and may soon touch on every facet of CRE. For many brokerages, it would be worth it for the security alone; however, the potential to securely process any number of paper-based collateral (liens, contracts, deposit records, and escrow among them) makes this an even more exciting development. For help in managing residential and CRE commissions in the meantime, contact CommissionTrac today.