28 FEB 2020
Triggered by the initial interest in Bitcoin, distributed ledger technology (DLT), particularly in the form of blockchain, has drawn attention from stakeholders across the real estate sector.
DLT seeks to resolve issues with centralised database management systems by using a decentralised database that spreads across several locations (i.e. nodes). Data or transactions can only be stored in the ledger when consensus among the nodes is reached. The technology has the potential to improve speed, efficiency, transparency and trust in transaction value chains. But how mature is this technology? And how widely adopted will it be?
Established disruptive innovation theories suggest that such technology may displace existing leading firms and eventually grow to dominate the market, thus firms have no other option but to accept and exploit it. On the other hand, since firms also face trade-offs and conflicts between new business models and legacies, the decision to adopt innovations still requires a thorough cost-benefit analysis.
Many have argued that DLT or blockchain has the potential to disrupt the industry; some regard it as a foundational technology that has the potential to create new foundations for our economic and social systems.
With many use cases and a great deal of contradictory information, it is increasingly confusing to understand the true value of such technologies for the real estate sector. This study critically reviews the current and potential applications of DLT in real estate and discuss how stakeholders in the industry will be affected by this innovation.
- This paper was authored by Dr Nan Liu, Dr Robert Duncan and Mr Anthony Chapman of the University of Aberdeen
This research was funded by the RICS Research Trust. As of the end of January 2021, RICS Research Trust became fully independent of RICS, and has been rebranded as the Property Research Trust. Find out more here . The Trust supports and promotes high-quality independent contributions to knowledge in the disciplines of land, real estate and construction.