How Bitcoin Technology Could Make Home Buying Hassle-Free
By Matt Weiss
Imagine yourself as a first-time homebuyer. You’re about to write the biggest check of your life for the down payment, not to mention taking on a monster loan. You have no idea who you can trust—from agent to lawyer to inspector—or what the process should be. And the list of—let’s face it—crappy experiences on the road to homeownership goes on. Must this meaningful life event be riddled with stress and anxiety from the get-go? It doesn’t have to be.
Insert block chains: a relatively new and promising technology that could transform the way we digitally exchange value, similarly to how Internet protocols, like TCP/IP, transformed the way we exchanged information. For example, to transfer ownership of a home today, there are countless checks of authenticity and intermediaries involved to insure the transfer is legitimate. By using a distributed database (a.k.a. “a block chain,” the same technology behind Bitcoin) to prove authenticity, we could legitimately transfer ownership immediately without the need of a middleman. In fact, when we think about block-chain technology and the industries it could disrupt, real estate tops the list. While Trulia, Redfin, Angie’s List and others have brought some transparency to the opaque world of home buying and home ownership, most of our experiences in this industry are fraught with incomplete, inaccurate, and asymmetric information.
Let’s play out one fundamental difference between today’s environment and a future with block chains: Houses in the future could not only have physical addresses but also digital ones. Why? Because we live in a connected world of smart things, and it’s inevitable that houses will collect and store a tremendous amount of information about themselves and their relationships. For example, imagine the house being able to answer:
•Who is my owner?
•Who are my inhabitants?
•Who are my caretakers (eg. housecleaner, landscaper, plumber) and what is their reputation with me?
•When was my HVAC system last serviced? When is the next service?
•How much electricity am I using? What’s my billing history? Am I late?
•Am I currently owner-occupied, rented, for sale, or vacant?
With this fundamental shift in mind, let’s see how it might feel to buy and own a house with a digital address on the block chain.