Jimmy Bingham
Blockchain technology is finally having its moment. Several years ago, blockchain was deemed to be the biggest technology since the invention of the Internet, and the real estate market in particular stands to see the most benefit; however, adoption has been slow in the industry. That is largely because there is a lack of understanding about blockchain.
"Blockchain has no better use than the digitalization of real estate. It always comes back to the real estate, and real estate will be the biggest part of the blockchain. It is going to remove a lot of outdated processes and a lot of the third-party intermediaries because of how secure the blockchain is," Jimmy Bingham, SVP at Prime Trust and a certified blockchain professional, tells GlobeSt.com. "It is going to speed-up transactions and it is going to remove the a lot of the high fees that are associated with real estate investing today. Finally, it is going to remove borders."
For starters, it isn't the same as cryptocurrencies, like Bitcoin. Rather, those currencies are users of blockchain technology. Blockchain is a way to decentralize data, making it impervious to hacking and therefore securing information. It can be applied to a number of things, and real estate transactions specifically. "You are able to trade your digital assets 24-7, 365 days per year," says Bingham. "Today, the stock exchange isn't open on weekends or holidays, so this is going to be beneficial for the public REITs, but even for the mom-and-pop investors there are benefits. The smaller investors will be able to take part in the real estate investment game."
For investors interested in adopting blockchain technology, education is integral. "It comes down to education. During the ICO craze, everything came out of the wordwork, and a lot of people jumped in at the beginning," says Bingham. "Everyone is seeing blockchain as something that will be bigger that the Internet, but you still need to do your due diligence. It is going to be buyer-beware, and people have to educate themselves. They can't just jump in blindly."
But, Bingham also says the industry needs to adapt to attract new investors and to help explain benefits. "The terminology needs to change going forward. Instead of using tokenization, I use the word digitalization. That helps people understand the technology better," he says.
According to Bingham, the benefits are widespread, and he is already seeing interest across the spectrum. "It is all over the place," he adds. "It isn't only institutional investors. They will invest in this technology."
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Kelsi Maree Borland
