A number of ICO issuers have envisioned a future in which tokenized pieces of a property could be tracked and traded via shared database
There are currently four ICO issuers with a real-estate component and more are to be expected in the future.
They include; BitRent, a way to speed up financing construction projects; Etherty, real-estate management through equity access; Caviar, a fund that tempers the volatility of crypto investments with loans to real estate projects; and Trust, a way to tokenize equity in real estate and other real-world assets.
The tokens would allow for what entrepreneurs are calling “fractional ownership,” or the ability for a real estate owner to split up their home and sell off equity stakes.
Not only would this allow a homeowner to sell some of the home’s equity should they need extra money, but it would also allow the equity to be freely traded until, one day, the home was sold, at which point the homeowner and equity owner could both enjoy any gain in the home’s value.
Compound VC’s Joshua Nussbaum expressed measured excitement that was representative of responses from crypto investors CoinDesk surveyed.
Nussbaum said: “If done responsibly and legally, I do think these types of projects can advance the industry by offering previously inaccessible liquidity and investment opportunity to individuals.”
With public blockchain, selling shares of a property can become more efficient and cheaper according to entrepreneurs and investors.
Scott Hoch, an analyst at Apex Token Fund explained, “A new level of liquidity is created when tokenizing traditional assets. This liquidity makes it faster and easier to rebalance a portfolio as the market changes.”
However, there are some many hurdles to crypto real estate as the laws around the industry are highly complex.