What You Need to Know About Blockchain and California Real Estate
If you follow financial news at all, then you might have heard of blockchain. If you are like most people, you are not quite sure what it means or how it could affect your life. In the California real estate world, there is a lot of discussion of blockchain and what – if anything – it means for the future of our industry. Keep reading to learn more, and then contact Neighborhood Escrow at 310-378-2456 for your escrow needs.
What is Blockchain?
Of course, before we can explain what you need to know about blockchain, we must go over what exactly it is. It is a specific type of database that allows cryptocurrencies (like bitcoin and other cryptocurrencies) to exist. A cryptocurrency can be compared to the dollar in that it is used to buy things, but unlike the US dollar, it is verified and recorded in a decentralized system – not a centralized authority such as a bank.
Some Companies are Accepting Blockchain Technology as Payment
Many large companies have started to adopt blockchain technology into their businesses as an accepted form of payment. There are payment processing companies out there that verify the funds. Once that occurs, an escrow company can send an invoice to the buyer, just as they would send wire instructions in a typical transaction.
In that case, the buyer would have a specific amount of time during which they can pay with Bitcoin or another cryptocurrency. The funds go through the payment processing company, which then converts the funds into cash and wires the money to the escrow company. As you can see, in this method, the seller never sees Bitcoin at all – only the cash that results from it.
Potential Benefits to Blockchain
Economic experts have pointed out a few different advantages to using blockchain. First, they point out that it is secure. Why? Because the records of the transaction are stored in several ledgers on different servers and nearly impossible to get to. Complex cryptography makes it safe and untraceable to use this method, which makes it more secure.
The second big benefit is that users find blockchain to be very transparent. Because the ecosystem is decentralized, everyone can keep an eye on transactions. It is very difficult to defraud someone with this method. Businesses that use it say they can complete transactions faster, safer, and more efficiently.
Of course, this is still a relatively new option and therefore requires more scrutiny before it will be adopted across the board. However, those of us keeping an eye on the pulse of the industry are certainly looking at blockchain technology.