What is the new frontier in real estate? Get ready for the next new thing – Block Chain - by Ralph Perna

In 1876, Alexander Graham Bell invented the telephone and started a revolution in communication. This must have been viewed as the best thing since indoor plumbing. In the ’50s, International Business Machines manufactured the first computer. It was the size of a small bedroom. The ’80s brought us into the era of the Internet, ushering in another revolution in communication. Get ready, get set for the next new thing in communication, Block Chain. What is Block Chain? I initially started reading about Bitcoin, which may be on the way to replacing paper money as a method for obtaining goods and services, but if you want to send and receive the Bitcoin, you need a Block Chain. The Block Chain is a method of digitally tracking and transmitting information. It appears to be the future for recording and providing transparency of all the documents and parties involved in a transaction. Once digitally recorded, the participating parties and all information pertaining to a transaction can never be changed or interfered with. Imagine, within one block, you can access a transaction’s entire chain of information from the start, and this applies to almost every industry. 

With regard to the real estate industry, information will be tracked for any specific property from the time it is vacant land to its change of ownership, including all title and surveying documents, town filings, judgments, variances, construction,  contractors involved and the source of construction materials, all within one block and easily accessible.  Block chain is well suited for transactions that require trust, along with a permanent record that requires the co-operation of many parties.

Essentially, the block starts out as a shared database for members to join when they want to send a document or asset to another member. The block is shared, but remains crypto-graphically sealed thereby preventing any information revisions or tampering of the data within a block.  As soon as the block information is confirmed and you become a member of that block, you can add copies of the information to your specific database. As I mentioned before, Block Chain can be used in every industry. For example, a distribution company would be able to track their particular products starting with where the products were developed,  the materials used, and where they were sourced, how the products were transported to the cargo dock and to the trucking company that would ultimately deliver the products to the company’s own loading dock. 

Block Chain possibly will reduce paper trails, eliminate any tampering of information, and be able to recognize the possible cause of issues along the production line, as well as  track down the cause. 

With this idea of a block chain in mind and its potential effectiveness and reliability, our state, counties, towns, and village offices also would become bulletproof against misinformation such as errors in filings, surveys and documents pertaining to a particular property. We possibly could say finger pointing would almost become a thing of the past.   Attorneys would have access to the block of particular property and/or case, which would include previous contract leases, as well as, past and/or current environmental information. The property’s entire history would be accessible within the block, thereby eliminating the downtime associated with going to the towns and county offices and filing freedom of information applications. The advantages seem to be endless. Again, keep in mind there is no chance the information in the block could ever be changed or tampered with. As previously mentioned, the benefits of this application can go on and on, and be applied to almost every aspect of day-to-day business applications. 

Given all of this, I wonder if someone somewhere will be able to figure out how to break the barrier and turn this new technology upside down, by a stroke of the mouse.

Stay tuned.

Ralph Perna is the executive managing director at Newmark Grubb Knight Frank, Melville, N.Y.