The true impact of blockchain technology on the real estate industry is currently unknown. However, it is predicted to be a major part of all real estate transactions in the near future. Consequently, state governments are recognizing the current use of blockchain technology and some states have taken legislative action to ensure the proper laws are in place to protect consumers and businesses.
Blockchain technology can be explained by using online platforms to conduct a transaction between two or more people. Whatever the transaction is, all parties involved receive information in a secure way. When all parties agree to the terms of the transaction, there is a recorded “block” that locks the agreement in place indefinitely. This ensures the data cannot be altered unless all parties agree once again to accept changes, which would record the new block. New blocks always include a reference to the previous block forming a “chain.” The old block would be visible but clearly identified as having an amended version. Each block of connections/agreements/activities are recorded and stored properly for easy access to data indefinitely.
REALTORS® have a long history of supporting an orderly real estate market which is why it is critical to be involved in any legislative or regulatory effort that may impact real estate transactions now or in the future. Therefore, ensuring consistent definitions in government oversight of blockchain technology ensures a smoother adoption for REALTORS® and consumers.