Sharing economy companies have truly changed how we visit destinations, how we stay there, and how we move around. The sharing economy has taken off in all sorts of niches from ride sharing, apartment or home lending, peer-to-peer lending, reselling, co-working, talent-sharing, etc etc.. In the last century, owning things was the marker of the middle class. Those who had more money could own more “things”. Today however, as millennials enter adulthood, the trend seems to be for them to own less and the advent of the digital and sharing economies have made this much easier. Recent data from Apartment List shows that 80 percent of US millennials would like to purchase real estate, however very few are in a good position to actually buy, mainly because they have not enough savings. This could imply that the need for rental homes will further continue to increase, as the traditional model to becoming homeowner is not within reach for the majority. Either way, the fact is, any sharing economy requires assets in order to run and the assets need someone to acquire them and hold ownership. Today most of these assets are owned by a small number of participants of a particular sharing economy, but in a not so distant future, blockchain, tokenisation and fractional ownership will enable a much wider range of users to own a small part of assets in a given sharing economy. At scale, this will represent a big boost, adding many new assets to any sharing economy platform.

The Real Estate “Establishment”

Heres a very interesting research conducted by Savills and Oxford Economics showing that Real Estate represents USD 217 trillions (in 2015). Thats roughly 2.7 times the world’s GDP and exceeds by almost one-third the total value of all globally traded equities and securitised debt instruments. Yes, just that! There is more to that… Around one-third of the value of the global real estate market is readily investable at scale, the remaining being not publicly traded in any meaningful way (think of it as owner-occupied). Digging further, the research shows that, among the “investable” commercial and residential real estate assets, roughly 2% were traded in big tickets deals of over USD 10 million. So hey, think twice about what one individual can invest in with a mere USD 10,000… All together, the Real Estate asset class is considered as illiquid. Improvements will come from increasing market depth, meaning more participants, more trades and at lower transaction costs. This is how Blockchain comes in as a solution.

Tokenisation and Frictionless Trading: unlocking value through liquidity premium

Coin Telegraph

Commercial Real Estate assets tokenisation is the process of converting rights to an asset into a digital token on a blockchain. The details depend on the jurisdiction, type of law, asset, and the rights intended to be transferred. Today, real-world assets are difficult to physically transfer or subdivide, so buyers and sellers choose to trade paper that represents some or all of the asset. But paper and complex legal agreements are cumbersome, difficult to transfer and can be hard to track. Blockchain and smart contracts offer the required technology to evolve to a digital system linking tokens to a real-world asset. The goal is to achieve the security, speed, ease of transfer of cryptocurrencies and at lower costs. In a digital system like Ethereum there is always consistency. Transactions obey the rules of the software and there are no exceptions. In the real world, there are often exceptions. Therefore the key challenge for a system that involves tokenising real-world assets like real estate is to ensure that the digital token stays linked to the real-world asset. Blocksquare provides a solution to this challenge by introducing its Proof of Title protocol to link smart contracts to the underlying real estate property. Some advantages of tokenisation using such smart contracts include easy distribution of generated profits, simplified title registries, lower entry thresholds for investors, and complete traceability and verifiability of all transactions ensured by Ethereum blockchain distributed ledger technology.

Blocksquare network in its early stages will focus on the growing market of professional short-term rentals (i.e. flats rented out through online platforms) and is currently finishing structuring a pilot project in Slovenia with one of the main local developers.

In my next article, I’ll explain more in details how its tokenisation standard will work by issuing two tokens in its ecosystem: the BST and BSPT tokens. I’ll explain what roles each of the two will have. Further on, I’ll also explain what Blocksquare’s Proof of Title protocol is and how Blocksquare plans integrating with a decentralised exchange.

Stay tuned and feel free commenting, sharing, clapping ;-)

P.S.: Blocksquare ICO’s Round A is scheduled to kick-off on April 18th 2018!

Link to previous published articles: Ethereum of Commercial Real Estate

Check out the following resources for more information on Blocksquare: One Page Doc → go.blocksquare.io/onepager Whitepaper → go.blocksquare.io/whitepaper Proof of Title Paper → go.blocksquare.io/proofoftitle Help Documentation → go.blocksquare.io/helpdocs Join our Telegram community Follow our Twitter Follow our Facebook Follow our Medium Blog Follow our Subreddit

Blocksquare is still searching for like-minded individuals that believe that blockchain has the power to change the rigid world of the real-estate and that find the project trustworthy and meaningful. Join our ranks as an Ambassador! Apply HERE!