Transactions

What does it mean to tokenise real estate?

Traditionally, regulated financial institutions, escrow agencies, title insurance, county records, and notaries played the role of trust keepers. They ensured that the financial system and real-world assets are transacted and recorded in an approved way. Blockchain technology rigidly enforced that trust. As a result, lower costs and faster settlement of transactions enable a global marketplace for all real-estate assets. The unit of value used on this blockchain is called a Token. And using this value unit, we can now transact real estate assets between buyers and sellers. This process is called tokenisation.

What is blockchain, and how does ReitCircle use this technology?

A blockchain is a chain of software blocks where each block contains a record of value transactions happening on the network. The creation of each block is governed by a mechanism known as proof of work (POS) or proof of stake (POS). In POW, we solve a mathematical problem, and the one who solves this the fastest is granted the right to create a block and insert the transaction inside that block. Furthermore, each block is linked to the other by a hash of the content of the other block. In POS, the blocks are verified by a group of actors (computers in the network), and the selection of these actors is based on the amount of tokens (stake) they hold. Both these systems embed Trust via a chain of transactions, and this chain continues to become more robust, over time, against attacks and manipulation. That is why even though the chains are open-sourced, and data is visible to the public, no one can change the content of these chains. And since Trust can now be delegated to the chain, intermediaries like banks or notaries are no longer needed. This trust disintermediation is the foundation of web3.0, and is explained in another article.

Can the equity bought on ReitCircle, be transacted outside this platform ?

Not now, but eventually, the protocol uniformity will make this possible.