Blockchain

Potential $20M Real Estate Sale Looks To The Blockchain

Real Estate Sale Looks to the Blockchain

In the digital payments space, it used to be people built holdings of tokens.

Now people can use tokens to buy holdings of buildings.

Fortune reports that “in the first offering of its kind,” blockchain tokens are being used to buy a piece of real estate.

In this case, the real estate is located in South Carolina, and is tied to a luxury student residence located near the University of South Carolina known as “The Hub.”

The owner is Convexity Properties, which is reportedly looking to raise as much as $20 million from the token sale. The tokens are considered securities and will “eventually” be able to be sold on exchanges.

It’s been well-noted in this space that blockchain advocates state the immutable distributed ledger system allows for efficient and relatively cheaper transfers of assets and information.

That is one of the guiding attractions of the blockchain underpinning this particular token sale, according to Josh Stein, CEO of Harbor, the firm that designs the tokens. There are fewer transaction costs tied to the real estate transactions – as, for instance, there are no lawyers’ fees attached.

The CEO stated that the blockchain real estate offering of the student residence will serve as a “template” for other transactions, which will be marked by increased liquidity.

“Think of it like the transition from snail mail to email that occurred in offices in the 1990s. The content was the same, but the digital format made it faster, cheaper and easier to send,” he told Fortune.

Stein said the Harbor-designed tokens cannot be bought and sold as freely as might be seen with bitcoin. The executive stated that Harbor’s design incorporates code that in turn facilitates compliance with Know Your Customer laws, among other regulations. The code helps ensure that the real estate tokens cannot be sold to unqualified holders.

Separately, Don Wilson, who serves as CEO of Convexity Properties’ parent firm, DRW, said The Hub tokens also feature the right for holders to receive a 5 percent dividend.

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