Blockchain isn’t the solution (by itself)
Real-estate is famously a traditional, illiquid and non-transparent investment class. It is also one of the largest in the world. As time goes by and education broadens, blockchain is increasingly regarded as a viable long-term solution to propel the real estate industry into the digital age. The recently published industry report by the Foundation for International Blockchain and Real Estate Expertise (FIBREE) provides a global perspective on the latest developments in the field of blockchain in real estate.
“Blockchain alone can never be the solution to a problem, it is at most a relatively limited part of the entire digital solution.”
Jo Bronckers, Co-founder & board member FIBREE
We at Brickblock fully agree that blockchain shouldn’t be considered as an isolated solution: it is deeply rooted in a much wider digitalisation effort. Coupled with automation, we believe it has the power to revolutionise the real estate industry across the entire value chain.
The 2019 FIBREE report outlines many of the benefits achieved by digitalisation for real estate investments, and more generally for the whole fund industry: increased speed and efficiency of operations, reduced risks of fraud and errors, as well as lower administrative complexity and costs. FIBREE identified over 500 projects worldwide applying blockchain technology to real estate. With almost 46% of all projects dealing with investment in real estate, it seems fair to assume that many have tried to realise the aforementioned benefits. So why haven’t we seen greater market adoption by now?
We believe the explanation is twofold: timing and product/market fit. While blockchain technology appears more and more relevant to financial services, it remains new to industry professionals. The lack of deeper understanding makes it easy to mistake cryptocurrencies for their underlying technology, and therefore leave out the great potential that blockchain has. On top of that, there is a dramatic gap between startup offerings and the current state of the industry. How could one even apply blockchain solutions to paper processes? Bridging the gap between the two realities is critical for market adoption.
Our response has been to develop the most user-friendly tool for our clients, as well as relentlessly keep up with the latest regulatory developments. We are excited to see Peakside Capital Advisory AG launch their fund Peakside Income Fund I (PIF I) on our platform ScalingFunds, and to provide them with a holistic solution facilitating the fundraising and investor management processes (see press release). Our platform enables private investors to get exposure to institutional-grade real-estate investments while keeping the costs to a minimum for the investment managers.
Being recognised as the #1 most promising startup in Germany for blockchain and real-estate by FIBREE is a tribute to our commitment to bring simplicity and efficiency to a major yet underserved industry.
Source: FIBREE Industry Report Blockchain for Real Estate 2019, https://fibree.org/