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Blockchain could spark 'absolute explosion' in real estate tech

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Blockchain could spark 'absolute explosion' in real estate tech

All industries will be disrupted by blockchain technology, but real estate in particular is primed for a fundamental change, prominent entrepreneurs, technologists and real estate players said at BitcoinCRE, a small-scale, blockchain-focused conference in New York.

Steven Nerayoff, co-creator of the distributed computing platform Ethereum, said the real estate industry is "absolutely ripe" for reinvention via blockchain tech, which he said will further democratize investment in the space and turn the art of price discovery into a precise and fully transparent science.

"Wall Street is going to 2.0," he said. "What exactly that is going to look like, we don't 100% know. But we do know blockchain is going to be involved in that."

Bill Staniford, former CEO of real estate data service PropertyShark, said real estate's tendency to be a slow mover with new tech is not, as some believe, a result of key players in the space stalling adoption, but a consequence of a fundamental data problem: There is no universal data set to use in decision making. Different public and private entities produce and use their own sets of unique identifiers — one-of-a-kind serial numbers to identify existing properties, plots and even individual rooms and there is no incentive at present for one entity to use another's framework.

In fact, there are incentives to not have consistent, unalterable data across the industry. Real estate agents, for example, can benefit by slightly tweaking an address in a listing by using "3-C" instead of "3C" for an apartment, for example to conceal the sale price history of a particular property.

"Every single broker in New York City is sitting on top of lakes and lakes of bad data," Staniford said.

Staniford added that blockchain, with its decentralized, encrypted public ledger of transactions, is uniquely positioned to create a universal, and universally owned, set of unique identifiers, and realization of that goal would reverberate through every related enterprise, sparking a wildfire of entrepreneurial activity.

Oliver Tickner, CEO of the blockchain-based Oracle data service Streetwire, told S&P Global Market Intelligence that mass adoption may be three to five years out — long enough to develop a comprehensive, universal set of property-level data.

"Everything comes back to [having] timely and accurate information," he said.

The market has not yet had with blockchain what a few panelists referred to as the "Netscape moment" a reference to the dominant browser in the early days of mass adoption of the internet when the technology evolved sufficiently to manifest a "visible," manipulable tool for the average user.

"I actually don't think there's anything stopping this technology," Staniford said. "It's going to happen, it's just a matter of who is going to implement it, how and when."