The blockchain technology is largely known as a means to power Bitcoin. However, turns out, it may come in handy to improve the current situation in commercial real estate (CRE). But what is currently on the market? 

Property-related information is stored in different places, both in digital and on paper, which, quite often, makes it tricky to identify the real owner or make sure that available documents correspond to the current status. With information being highly scattered, more effort is required to find and secure sometimes crucial documents, thus leading to the loss of CRE-related files and a higher risk of fraud. What makes the problem worse is that CRE has a high threshold for potential yet smaller investors. 

So, why could blockchain become a remedy for commercial real estate? In short, it is distributed, secure, irreversible, a near real-time and reliable ledger designed to operate in a trustless environment, which perfectly fixes the drawbacks of CRE. 

Let’s consider a few use cases: data storing, contracts, and investments.

For starters, the blockchain technology can be used to store data about commercial real estate ownership and connected contracts, such as property ownership rights, lease and sales agreements, and could include a trusted third-party signer if necessary. It can also provide the user with anonymity but verification of identity is required.

Additionally, blockchain supports CRE lease operations, such as property visiting and negotiations. When it comes to the lease agreement, there are two ways to cooperate through the blockchain. The first one is pretty straightforward: sign the agreement and store it in the blockchain. The second one, on the other hand, involves signing the documents using smart contracts with automated payments. This approach creates transparency for all parties involved whilst reducing operational costs. 

Blockchain is also a great tool for CRE sale and purchase, offering a convenient way to find any needed documents inside the system. It is also useful for the final review and the signing of the contract. 

However, what makes blockchain a game-changer is its ability to lower the investment threshold. The tokenization of the property, say one token is equivalent to one square foot, would allow smaller investments to buy the property, reducing stellar prices and operational fees. Yet, a potential buyer is not limited to buying a natural number of tokens: they can acquire 10.7, 3.5 or even as much as 0.1 tokens and still get their fair share of profit from CRE. This approach encourages more investments from all over the world, simplifying the procedure for small and medium investments. 

As there is only a set number of tokens, the risk of fraud, such as selling the same property to different investors is eliminated. And, of course, the cherry at the top: lower operational costs.

Although the blockchain technology is yet to unleash its full potential in CRE, it proves to be convenient and secure, being doomed to become an integral part of the industry.

What do you think? We would love to hear your opinion in the comments! 

Further reading: 

Ravencoin –  peer-to-peer blockchain, handling the efficient creation and transfer of assets from one party to another.

Hello, everyone! In this post, we would like to cover the problem of authority and how it affects the decision-making process. We would also talk about how multi-signature can address those issues and discuss a few real-life examples. 

Quite often, the same operation would have to be confirmed by different individuals, especially when it comes to finances. There are different reasons for confirming one operation for several times. Sometimes it is simply required by certain policies, sometimes it is just an extra measure of protecting oneself from unauthorized access. No matter the intention, it is simply the reality of many fields: worrying, theft, and unexpected sign-ins. Luckily, there are blockchain-based solutions. 

People who work with wallets, which require only one password (private key), may find themselves in plenty of unpleasant scenarios. For example, if a private key is lost, then the person wouldn’t be able to access their wallet anymore. If a key is compromised, the thief could transfer all the assets in minutes and it is nearly impossible to track and get them back. If a mistake occurs, such as transferring the assets to a wrong account, it can’t be reversed. The assets are lost. Ouch.

Anyways, there are a lot of “ifs” and enough terrifying possibilities. However, with blockchain-based solutions, all of these risks can be resolved and avoided by using multi-signature. The name speaks for itself: you access your account by entering several signatures (private keys) for certain operations. For instance, in Stellar blockchain, each account requires from one to several signatures for the authorization. Each signature has its own value, but to gain access to an account, you’ll need a certain “weight,” so-called “changeable thresholds.” The thresholds vary for different operations, including transaction processing, allowing trust, account merging, changing account settings, etc. Not only does this approach provide flexibility for different types of business implementation, but it also mitigates risks of losing assets due to errors or the compromisation of private keys. Signing in could be performed by hardware wallets like Ledger or Trezor, so the private key is much less likely to be leaked in comparison to the password entered by the keyboard. 

Let’s consider three real-life cases in which multisig is an optimal approach. The first example is a small family business. Each member of the family would have a private key but transferring assets from the wallet would require at least two of them. This way the parents are sure that their son can’t make any unconfirmed purchases like a Kawasaki motorcycle to “optimize the delivery”.

Another good example is financial or procurement systems, in which the payment must be authorized by several individuals because of a certain internal policy or regulation. In this case, instead of manually doing everything good-old way–on paper–all operations could be easily implemented on the top of the blockchain. The newly implemented pipeline will automatize and ease the work, also ensuring the security of the operation.

Finally, let’s consider a case in which certain crypto-assets need to be protected. Two company executives have the sign rights, each of whom would have one key plus an extra back-up key. Three keys total. So, if a key is lost or compromised, the company does not lose access to the account and can easily replace the key. If an important operation is about to take place, the system would require two signs.

What do you think? We would love to hear your ideas in the comments! 

We are thrilled to launch our blog about our experience in real business. Although Arkuda Solutions is a relatively young platform, we do already have some invaluable experience: the implementation of software in Arkuda Digital. We have gained expertise in Blockchain, distributed development, media streaming, UPnP DLNA integration, complex and embedded systems implementation, and the development of mobile applications for iOS and Android.

How to create an effective processing center with blockchain over a short period? How to minimize the risks of working in a trustless environment? How to organize cooperation in a distributed development team? At Arkuda Solutions, we believe that there is no need to reinvent the wheel. By sharing our experience, we share our solutions that could come in handy in the future.

What do you think? We would love to hear your ideas in the comments!