In the past few years, the use of cryptocurrencies to purchase commodities and services over the internet has become increasingly common. In the early days of digital currencies, these purchases were often limited to small items such as computer hardware, video games and even pizzas. Of late, however, numerous people have been willing to use their digital wealth in the automobile and real estate markets, where transactions of a million dollars and up are fairly common.
One of the first recorded property purchases through cryptocurrency was actually several years ago, in 2014, when a 1.4 acre home was sold for 2,739 BTC, or around $1.6 million at the time. More recently, throughout 2017, many news outlets reported a surge in the number of American, Middle Eastern and European homes being offered in exchange for bitcoin and other currencies. For instance, Fortune compiled a list of median house prices in bitcoin for every US state.
Even without the cryptocurrency aspect though, many caveats usually entail property purchases of large amounts, including the problems of middlemen and possible fraud or theft. Transferring money between the involved parties is not always a completely streamlined process either as, in crypto at least, it is relatively common for the buyer to send his payment without receiving anything in return. Furthermore, assuming the sale is between people of different nationalities, the problem of currency conversion is added into the mix.
Given those limitations then, it is quite clear that there is a need for a system designed specifically for large-scale transactions. SMARTRealty, therefore, is a new blockchain based company that aims to alleviate many of the issues that currently plague the real estate realm.
The solution proposed by SMARTRealty includes two distinct platforms, one for contracts and the other for listings, the latter of which will allow buyers to connect with landlords and owners looking to sell their real estate. Once the negotiation and agreement process for a specific property has been done, SMARTRealty will provide a smart contract template for the parties to alter to their liking. The contract will have all necessary details pertaining to local laws and regulation already filled out by the platform.
A SMARTRealty contract can also include several other clauses, including those related to security deposits, initial escrow amounts and deliverance of converted currency. In short, as long as all the prescribed conditions are agreed upon and confirmed by both parties, the contract can realistically contain any necessary detail. It is important to note, however, that besides the initial template, the company itself will not provide a fully filled out smart contract.
Tokenization and How to Participate
The platform will also use its own SMARTRealty (RLTY) tokens to facilitate payments and records on the blockchain. According to the company’s white paper, using a native token will allow the parties to transact in any currency of their choosing, including fiat or other cryptocurrencies such as USD, bitcoin and Ethereum among others, as they will all be directly converted into RLTY tokens at the time of contract closure.
The RLTY tokens are built in compliance with the ERC20 token standard, which essentially allows it to use the Ethereum blockchain as its backbone. This also means that users owning any amount of SMARTRealty tokens will be able to use their existing Ethereum wallets, provided the wallet is compatible with the ERC20 standard. While exchange wallets typically cannot be used for this purpose, popular paper wallets such as MyEtherWallet are a safe bet.
SMARTRealty is currently hosting a public token sale for its RLTY token, aimed at investors and future users of the platform. As of the time of writing this article, the ICO is scheduled to last another couple of months, until May 2018. There is an early-bird incentive, wherein buyers of the token are currently awarded a 30 percent bonus on top of their purchase.
SMARTRealty’s roadmap indicates that the company is looking to have its token listed on cryptocurrency exchanges soon after the end of the ICO period, or between May and June 2018. Shortly after, by September, the team will be launching beta testing of its rental platform and partnering with rental networks. On the other hand, the beta testing phase for the sales and listing platform is expected early next year, in February 2019, with a full-feature release targeted for June of the same year.
The company has stated that while its initial platform rollout will be initially limited to the North American region, beginning with the United States, it will also be looking to enter new markets soon after. It is likely that the company cannot immediately cover several regions on release simply because of differing legal landscapes between borders. Given that SMARTRealty contracts have to account for terms and conditions in every jurisdiction, the company will have to assess each country, and even state or province, individually.
In the future, the company is hoping to use its platform in even more aspects of real estate, including mortgages. Considering how important financing usually is for most homeowners, it is easy to see why that is SMARTRealty’s next course of action.
While real estate transactions have been mired in inefficiencies for the past several years and have always suffered for it, the smart contract solution presented by SMARTRealty may be able to change all of that. Perhaps then, accountability will finally ensure a smooth transition of real estate ownership.Opinions expressed here by Contributors are their own.