Technology is expanding our ability to collect, analyze and transfer information in ways not previously imagined. From building sensors to smart contracts to cryptocurrency transfers, blockchain technology is a powerhouse and a major disruptor to the real estate industry and the world.
What is blockchain? It is a distributed digital ledger that changes the way information is stored and shared between parties with no central database to hack. It resides on a network, not within a single organization and uses encryption with both private and public keys for access. This distributed ledger approach includes a time stamp and stores value exchanges in a permanent record, making it extremely difficult (some say impossible) to alter a record as it would require rewriting the entire history of the record with all participants watching. Bitcoin is one of the most recognized applications of blockchain technology. Others include bitshares, Ethereum, and Abra, a smart wallet application.
On the continuum of technology-based evolution, we’ve experienced the Internet of Things moving toward the Internet of Everything. With blockchain technology driving bitcoin and other cryptocurrency applications, we are rapidly moving to the Internet of Finance. The financial services industry likes the security and other features of the technology, and some have already heavily invested in it. One large financial institution has more than 35 patents either approved or pending based on this emerging technology. One of the leaders in this initiative is Goldman Sachs, who has a history of innovative platform development.
Regulators are looking at the technology with interest, and a Blockchain Innovation Center opened in September in Washington, DC as a joint venture between the Chamber of Digital Commerce and Technology Incubator 1776. The center is focused on fintech applications, aiding regulators and governmental agencies at all levels to understand the benefits of the technology and address issues including asset registry, cybersecurity and identity management.
How fast is this new technology moving? In August of this year, The World Economic Forum estimated that about 80 percent of top global banks will have launched blockchain projects by 2017, describing the technology as the future “beating heart” of the financial sector.
US-based banks are proactively engaged in building a blockchain-inspired platform and are driving an international initiative through the R3 Consortium. This commercial venture includes more than 70 of the largest financial institutions globally with the heaviest concentration of members from North America.
Blockchain is based on a single source of truth, and mandates a standardized approach to the collection and distribution of information that populates the ledger and drives decision making – that’s exactly what OSCRE Standards provide to the industry. The efforts of the R3 Consortium demonstrate financial institutions have firmly planted a stake in the ground to identify ways to monetize this new technology.
Are you prepared? Standards implementation is a critical step to prepare for this new technology that will no doubt change the way business is conducted globally. The stakes are high. For more information on OSCRE’s initiatives, please email us at firstname.lastname@example.org.
©OSCRE International 2016