How To Tokenize Your Real Estate Property?
To tokenize or not to tokenize, that is the question! Here we’ll take a few arguments for and against and then talk about how to get it done, should you desire to.
Tokenizing real property in its most basic form means that we will take a representation of physical asset and put in on the blockchain. Clearly, blockchain is digital and physical asset, like a house is physical and as such you cannot squeeze the actual house into bits. However, due to ability to tokenize, we are able to put a representation of our property on the blockchain.
So, to tokenize your property, we are saying that you have an ability to get a digital representation of your real estate asset, by receiving a unique token (also referred to as non-fungible, meaning no two coins are exactly the same and each represents a specific asset).
Not to tokenize your property
Because blockchain technology is relatively new, there are many fears about tokenizing your real asset. Here are a few arguments against tokenizing your property:
- lack of trust into the new technology
- decentralization of the network
- ability for everyone to see what I’ve done
- lack of understanding
- inability to see what the future holds
Let’s tackle each of these and we’ll start with the lack of trust and understanding. When something is new and not proven under many different circumstances people tend to have some concerns whether it will be performing well, be safe, and continue to operate in the future. It makes perfect sense. When electricity was first invented, many people were petrified of it and refused to install it into their home. It was new and unknown and many believed it would kill them. Today, we have a very different understanding of how it works and use electricity on daily basis without thinking much about it (that is until we lose power).
With lack of trust and understanding, individuals also are afraid that decentralized nature of the network combined with publicly available information will put them at a higher risk:
What if everyone sees that I own this property and takes it away from me?!
Decentralization means that many individuals (typically very smart individuals) are committed to keeping information safe as they have a vested interest to protect their items utilizing the same network. This should give you a piece of mind. Additionally, for publicly viewing who owns what, this can be done today.
Property ownership is public in its nature. This was the case before the internet and it’s the case right now. The only difference is that it’s much simpler today to find out who owns which property, by simply visiting land registry and looking up an address. If you are concerned that others can see that you own a particular property, you should consider talking to an attorney and engaging in some type of entity that can display as an owner instead of you. Given that this is already the case, having your house tokenized does not give any more information out to the public than what’s already there.
Our inability to see the future is equally as paralyzing as we are uncertain what will happen 5, 10, 20 years into the future. Will this particular network survive? Will there be another, better one that emerges? This fear stops us from doing things today because things could change in the future. So, let’s address it.
Not that long ago, giant car phones were the thing. Then came mobile phones size of a brick that weighted just as heavy. From there we got flip phones, blackberries and ultimately smart phones that most of us poses. The person who purchased the giant car phone upgraded as the technology continued to evolve and kept with times, so their initial phone is no more of a waste than what we all do today: upgrade our tech on regular basis.
The same can be said about other products and investments. You buy something that makes sense today and as things shift, you shift your holding.
To tokenize your property
If you’ve read thus far, you can see where I particularly stand: tokenize! And here are my reasons:
- Tokenization means holding important asset information in my custody
- Ability to access equity, sell or transfer is faster, cheaper, and easier
- Blockchain is the future
I am not the only person who believes that blockchain is the future. Many incredibly intelligent and sometimes wealthy individuals believe the same. That’s the reason why they are investing in it, building on top of it, protecting it, nurturing it and talking about it. It is like internet in early stages only improved.
Tokenizing your house means that you get a token that represents your property and ownership and that token can live inside a digital wallet. With it, you are not tied to any particular application or website. You can transfer it with you wherever you go and can access it on any device (as long as you recall the password to your wallet). This means that whenever you need to prove your ownership it’s at your fingertips (as oppose to remembering which box in the basement holds the paperwork).
You can transfer this token from wallet to wallet in seconds, which makes sale and transfer very fast and easy. Because tokenized house can easily be purchased with any cryptocurrency and that crypto can be exchanged for any currency in the world, this opens liquidity into your property. It means that selling the house is easier and cheaper. It also means that when we list our property on global network, like blockchain, accessible to anyone, anywhere, our market expands exponentially (this is a really good thing when you want to sell something).
Because property is tokenized and new world of decentralized finance (DeFi) has emerged, that means that you can quickly and easily get a loan on your asset or even split it into smaller pieces and share equity with others. This makes our property much more liquid, allows for co-ownership of asset and opens many doors that traditional finance makes very challenging and sometimes impossible to achieve. And, achieving it is typically done within a few seconds (or minutes) as oppose to weeks or even months.
How do you tokenize your property?
Now that you, like me, believe that tokenization is the future and that doing it has all the upside and no downside, you may be wondering
How do I tokenize my house?
You have a few options:
- build a platform or smart contract that allows you to do that
- use the platform we created: Tsaishen Crypto
If you are a developer and you understand the ins and outs of real estate you can build your own platform or set of smart contracts to do what you want. If you are not a developer, you can hire one. In a few months and quite a few tens of thousands of dollars later you can get it done. That’s option one and if appealing to you, go for it!
If you don’t like the first option due to time and resources it takes, then you have Tsaishen Crypto as an option. The benefit, it’s already built and it has a very simple, user friendly website that anyone can use and you can get things done in seconds and fraction of the fraction of the costs.
This means you can get started today and in a simple click of a button your house is up on blockchain. What you do with it afterwards is your business: hold it, sell it, it doesn’t matter.
Tsaishen Crypto smart contracts are already deployed on Rinkeby network and temporary website where you can test out the services for free is already set up: https://tsaishencryptohouse.netlify.app/
Because it’s on test network, you don’t need real money to test it and see how it all works. You will need some test Ether (think of it as digital version of monopoly money) in order to play around.
If you are new to the crypto space and don’t understand how to utilize the services or switch networks, we have a YouTube channel that explains everything step by step.
Why a test network?
To ensure that everything works properly, we want it on the test network first, before deploying onto the main Ethereum network. This is an important step to test different features and components of the tech.
As tests on this network continue to work as intended, we will start deploying on other networks to test other features as well. It is our plan and goal to go live within next 4–6 weeks. At that time we’ll announce it, but for now, you can play around and get comfortable with the future today.
