What’s the biggest way that cryptocurrencies have affected the world so far? For many, the answer would be decentralizing the ownership of money. With this, however, comes an even further level of decentralization. Now, anyone can invest in just about anything. The only thing holding this trend back from becoming truly widespread are existing regulations related to investment markets.
In real estate, this issue is no different and yet, certain companies are finding ways to act within the law and still make this goal of democratizing investment markets a reality. Blocksquare belongs in the small, privileged group that is doing this for a few key reasons.
First, they have a clear vision that goes beyond the general idea of tokenizing real estate in some sort of crypto hedge fund. "Real estate is the biggest asset class in the world. At the same time, it’s also one of the most illiquid investments one can make. Generally, investing in real estate is hard to access, time-consuming and capital intensive. Tokenization of assets like real estate is here to change this. " This quote from Blocksquare’s CEO, Denis Petrovic, is where everything begins for them. In essence, they aim to capitalize on this major opportunity by changing the well-established foundations of real estate investing.
More specifically, just as Paypal and Stripe represent the top infrastructure providers for online payments, so Blocksquare hopes to be for the future market of tokenized real estate.
If there’s one problem with such an idea, it is that it is almost too forward thinking.
We have just started to see tokenized real estate become a reality. The first pilot of Blocksquare’s infrastructure, which can be termed the Proptoken ecosystem, involved an underground parking garage. While tokenizing such a structure is no small feat, for such an infrastructure to succeed, it will have to be widely accepted by commercial real estate providers to truly take hold.
Secondly, related to this, Blocksquare deliberately started with this relatively minimal pilot to showcase the Minimum Viable Product version of its’ future ecosystem. Therefore, theoretically, they could have chosen a larger structure, but doing so may have compromised the efficiency of their tech. In actuality, though, it does not really appear that this is the case. What is more likely is that Blocksquare made this chose to avoid the inevitable red tape that would come with using a larger piece of property.
More recently, it appears that this pilot and other experiences have helped the Blocksquare team to solidify their vision into making real estate investing something that anyone with an internet connection can do. The fact that they already have a fairly clear roadmap related to this vision can only serve to help them in their future efforts.
Even so, one factor remains uncertain. Moving forward, the biggest challenge for Blocksquare will most likely be attracting enough commercial real estate companies to their platform, in order to truly shift real estate investing in Blockchain-based markets.
On the other hand, perhaps they will not end up needing to do this at all. Because of what the Blockchain has already done for data ownership, it would be logical to conclude that a truly democratized platform for investing in real-estate would attract another group altogether. In a word, what’s to stop individual owners from tokenizing their properties in droves?
Without brokers and clearing houses, the potential for profit for everyone is much higher. As time goes on, expect us to keep you informed on which way the chips fall for such a promising, early-stage firm.
By: BGN Editorial Staff