Blockchain, a term still foreign to many, is making an impact across industries and around the world. The technology first gained popularity through Bitcoin, the digital currency which is now trading at a market volume over $2 trillion. At the time of introduction, blockchain was a revolutionary step towards transparency and a decentralized structure that offered full control of ownership in peer to peer transactions.
As popularity of blockchain in concept spread, the technology set itself apart from Bitcoin, expanding into industries beyond the currency market. Its core ability to record transactions on an open and decentralized ledger without any third party involvement proved the true efficiency and cost reduction benefits for stakeholders – resulting in a boom of blockchain.
While Bitcoin was only offered in a currency format, utilization sparked ideas and further advancement with the creation of Ethereum.
Created to offer monetary value in the form of loans or contracts, Ethereum opened the door to smart contracts, a protocol that facilitates the negotiation and ensures the adherence to the terms of a contract. Absent of bias and third party involvement, corporations and investors are now looking to Ethereum for efficiency in terms of both time and dollars.
Highlights in 2018
From the offering of individual home listings through imbrex and property sales to buildings and institutional transactions, 2018 marked a tipping point, celebrating several firsts for the now-proven technology.
Manhattan claimed the first tokenization of a $30 million property with the offering of 436 and 442 East 13th Street, a newly constructed 12-unit condominium. Led by Propellr and Fluidity, the tokenization offers prospective investors flexibility and opportunity that would not otherwise exist in traditional financing models.
Another first was seen in the offering of $20 million in private equity for a premium off-campus student housing service at the University of South Carolina. Harbor Platform Inc, an all-in-one platform for tokenized commercial real estate teamed up with Convexity Properties to tokenize the ownership of the property for equity divided into 955 shares, represented by 955 tokens priced at $21,000 each.
The Outlook on 2019 – Scaling of Blockchain
A significant shift in the conversation towards how the blockchain can affect the flow of data is expected in 2019.
Information is an asset with individual agents and brokerage firms of all sizes recognizing the inherent advantages that blockchain and smart contracts present in controlling the downstream flow of it.
In the coming year, we will see more products and services that support the early stages of data marketplaces and the introduction of protocols such as Tegula that offer global interoperability between disparate systems.
In 2019, we will also see blockchain 2.0 upgrades that will added even greater speed to the processing of transactions. The upgrades, like Etherum’s Serenity release, will significantly increase processing times from the current 14 transactions per second, to over 100.