As the world becomes more and more digitized, more and more aspects of our lives are being moved onto the blockchain. Learn how tokenization will disrupt real estate forever in this article.
As the world gets increasingly digital as we move to digital technology, more and more aspects of our lives are transferred to the blockchain. One of these applications is tokenizing physical assets with blockchain technology. Here, I’ll go over the process of tokenizing a home by using blockchain technology and how it could benefit homeowners.
Tokenization refers to the process of converting rights from an asset to a token on the blockchain. Tokenization permits the ownership of assets like real estate jewelry, art automobiles, etc. which can be bought and sold through smart contracts.
If you tokenize your home and build an image of the home which is stored on the Blockchain. This representation is called a “token”. It is then possible to trade these tokens as you would the other cryptocurrency. It allows homeowners to earn money from their properties through the sale of tokens that represent their property.
Another benefit of tokenizing the home is that it’s easier to transfer ownership of the property. Typically the moment you decide to transfer ownership over a property to a different individual, you need to complete an entire process that involves signing many documents and transferring large quantities of paper. A house that is tokenized allows the entire process to be made easier. It allows the tokens to be traded easily on an online marketplace Transferring the token is as simple as the transfer of cryptocurrencies, and it is possible to do this from any location around the globe.
Tokenizing a home is advantageous to investors. When you tokenize a house, it allows you to open an entirely new type of investment for investors who may want to be exposed to real estate without needing to purchase a home. Additionally, since these tokens represent digital versions of real homes, they are flexible. This means they can be traded as well as traded. They can also be used as collateral to secure loans.
The tokenization of a house allows investors to buy small portions of homes, while they would have to buy expensive entire units. Tokenizing a home is like making your own crypto, backed through real-world assets. These assets can be traded quickly and be accountable. This could increase liquidity for investors and homeowners alike.
Many people believe that tokenizing houses is merely a matter of creating tokens that signify possession of the home There are other elements to consider. Another is to make sure that the property is tokenized in such a manner which takes into consideration the physical components of the house as well as its value. A house that is not tokenized in a way that does this could result in them being valued much lower than they really are due to the value of the house cannot be recorded on the blockchain itself.
Another option is to tokenize property by first creating tokens that represent the property as a whole, then creating tokens that represent portions of ownership in the land where the house is located. This can enable you to mix physical and digital representations houses by using blockchain technology.
We’re still in the beginning of the process of tokenizing properties, however I am convinced that there will be a lot of advancement and innovation in the future years. There’s definitely a change in the way that assets are not only transferred, but will also be represented by blockchain technology.
Interested in learning more about this? Visit us at OwnInAZ.com or call us at 928-323-0031 to learn more about tokenization and real estate.
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By William Hamburg
William is a third-generation real estate agent, investor, and developer in Sedona, Arizona. He has been a Sedona native for more than 30 years. He is currently an Associate Broker at Realty One Group Mountain Desert in Sedona and a Certified Crypto Agent.
If you have any questions about Sedona Real Estate, Investing, or Crypto, we’d love to speak with you.