The blockchain has been attracting a lot of attention from startups and established businesses throughout the years. Flip, a peer-to-peer leasing marketplace, is now exploring the boundaries of this technology as well.
Flip P2P Marketplace for Leases
It has to be said — the Flip marketplace is quite a unique business model. Embracing the peer-to-peer nature of marketplaces is always a good start, but it remains to be seen how well that translates in the leases market. Founder and CEO of Flip, Susannah Vila, believes there is a large market waiting to be tapped.
As is the case with most of these innovative business models, Flip was born out of a personal need for Vila as it allows anyone to buy leases from outgoing tenants or sell leases that are no longer desired. In a way, this cuts out the middleman in the lease market, which will not only save time but also a lot of hassle.
Most people see tenant leases a burden, rather than the valuable asset they can be. For the tenants, however, it is rather difficult to opt in or out of an existing lease, and the Flip platform will simplify this process. In fact, the entire process should only take a few clicks to get everything sorted.
But there is a problem with these leases as document fraud is a grave concern to Vila. The tenant qualification part of the lease flipping process is the biggest hurdle to tackle, which is why the Flip Report was introduced. As the name suggests, this is a document containing financial and credit data of the new tenant, which can be updated as time progresses.
This is where blockchain technology comes into the picture as the information found in the Flip Report is stored in a secure blockchain. But this is not the Bitcoin or Ethereum blockchain directly. Instead, Tierion uses a self-developed higher performance implementation of ChainPoint to store data in a Merkle tree, of which the Merkle root is inserted into the Bitcoin blockchain. This allows for notarization of documents at a much cheaper rate than putting data into the Bitcoin blockchain directly. Chainpoint is a federated server for building blockchain notarized Merkle trees, which return the Merkle proof as a receipt. Tierion is currently working on an upgraded version of the Chainpoint protocol.
Flip Founder and CEO Susannah Vila stated:
As a landlord and as a subletter you don’t want to rent to people whose identities – their finances and their backgrounds – you can’t trust. Integrating our reports with the blockchain is one component of how we are keeping everybody honest and improving trust and reliability for both landlords and renters.
There seems to be a growing interest in blockchain technology from the real estate sector as of late. In fact, there will be a special conference in Newport Beach, CA discussing the potential use cases for blockchain in real estate. This event is organized by the International Blockchain Real Estate Association, which will take place May 17, 2016.
Although the storing of Flip Reports on the blockchain is a significant step forward for the validation of this technology, some people are looking at the future implications already. Lease administration is cumbersome, and a digital lease on the blockchain could transform tasks such as renewing dates and adjusting rates into simple notifications, to eliminate paperwork and delays.
Does blockchain technology have a future in real estate? Let us know in the comments below!
Source: Cre Tech
Images courtesy of Flip, Shutterstock