You have most likely heard of Bitcoin—the digital currency that has been changing the game in certain industries, mostly finance, since 2009. The blockchain technology behind it, though, has far more potential uses than retail transactions or asset transfers. If you recall, blockchain is a ledger, or an accounting, of transactions that cannot be modified without it being flagged. You see, the transactions are shared with multiple computers (and users), so changes to the record must be approved by the entire network, thus, making them unlikely to occur. (We can thank the specialized encryption called “cryptographic hashing” for this protective measure.)
The real estate industry has recently taken notice of the inherent capabilities of blockchain technology and with good reason. Property transactions, involving mortgage documents and title transfers, are not protected from fraudulent activities, require third parties and are, generally, slow and sometimes inefficient. While hard-copy documents are not stored in a blockchain, the technology still has the ability to record, time-stamp, encrypt and solidify transactions in a way that has never been done before.
The Cook County Recorder’s Office has been willing to give blockchain a chance. In a pilot project with tech startup Velox.re announced this past October, the office began using blockchain technology with property title and other record transfers. The Chicago-based office is the first U.S. government agency to test blockchain technology in their operations. The project’s results and reflections will be shared at a conference in March of this year.
We know that blockchain technology is still the new kid on the scene in terms of real estate uses, but its functions and potential lead us to believe it will soon be the leader of the pack in terms of real estate disruption.