With blockchain disrupting many industries and sectors of our lives, we’ve sat down with Achim Jedelsky (Twitter:@ajedelsky), Co-Founder and President of FIBREE, to tackle the adoption and implementation of this technology in and by the real estate market in the coming years. Read the whole interview to find out what weaknesses within the real estate market can be addressed by blockchain, some applications of the technology for real estate, the advantages for businesses and consumers alike, as well as what the future has in store.
OCC: Tell us a bit about FIBREE. What problem are you trying to solve?
Achim Jedelsky: FIBREE – the Foundation for International Blockchain and Real Estate Expertise – was founded in Amsterdam in July 2018 by eight co-founders from six different countries. Our aim is bringing together real estate professionals and blockchain specialists from all over the world to exchange expertise. FIBREE is aware of the current hype about blockchain technology in the context of Bitcoin and cryptocurrency, which does not contribute to getting to know it better. Therefore FIBREE‘s mission is to help create a realistic expectation that will allow the real estate market, step by step, to discover and exploit the true potential of blockchain technology. By bringing together the expertise of pioneers in this field and sharing knowledge and insights already gained, FIBREE wants to make an important contribution to the adoption and implementation of this technology in the real estate market in the coming years.
In short, the problem we are solving is the transfer of knowledge between experts as well as between countries. Currently, FIBREE has 30 locations – so-called regional chapters – across the world and we are constantly adding new ones. With this international reach, we will publish our first industry report about blockchain for real estate in spring of 2019. This report will give a unique view on regional activities in this sector across the world.
OCC: What are the current weaknesses with the real estate market that blockchain can address? Give us some examples of blockchain applications for real estate.
Achim Jedelsky: I guess the biggest challenge is to bridge between the huge expectations that are linked with blockchain and the actual applications that we can use today. In general, I see this as a common innovation challenge and not only a problem for blockchain technology. In the case of blockchain, we only have on top the strong link to cryptocurrency – with all its good and bad association.
You find possible blockchain applications all around the real estate lifecycle – the whole value chain from creation to demolition/recycling of real estate.
Among these, the tokenization of assets is probably the application that is currently pursued by the biggest number of startups in this sphere. The idea to turn the illiquid and slow real estate asset into an easy to trade asset is very tempting. The big challenge here is the lack of appropriate legislation, therefore I think we will have to wait for that in order to see the breakthrough here.
A more feasible application is the use of blockchain for lease and rental agreements. In this context, the technology helps to streamline existing processes, increase transparency and reduce the influence of middlemen – some of the core characteristics of blockchain.
OCC: How secure and viable would you say that these applications are?
Achim Jedelsky: After all blockchain is still a young technology and we see constantly new developments and improvements – what is a good thing – but this might also produce the image of imperfection and maybe insecurity. In my opinion, the technology itself is secure, most challenges occur in regards to how to interact with it as a user. Therefore I see a bigger challenge in offering better user experience and solutions for how to deal with e.g your private keys. Ultimately no user should need to be aware of using a blockchain solution, only the use case it is enabling should be in the focus.
OCC: What are the advantages for businesses and consumers from this?
Achim Jedelsky: For the consumer, blockchain will produce more transparency and control. Ideally, the user will be part of the real estate lifecycle. This can be for example by incentifying a tenant to update information about a building and in return receiving a rent reduction.
For business, it allows to reduce the effort for processes and to share this effort with other players in the ecosystem. Currently we see a lot of data silos in real estate, often these silos provide an easy business case, but in my opinion without adding value. This will change with blockchain empowered platforms. I don’t see that the role of the middle man will vanish, but you will need to prove that you are delivering value with your business and will not be able to base your success on the lack of transparency within the industry.
OCC: What other changes do you see affecting real estate in the future?
Achim Jedelsky: As real estate holds so much value and is an important pillar of our society I see regulation as a challenge but also as an opportunity for the blockchain ecosystem. The worst thing is to have no regulation as this creates uncertainty what is bad for any entrepreneur. Therefore to create appropriate regulation will be one of the crucial cornerstones of the successful use of blockchain in real estate.
OCC: Do you have a roadmap in place? What’s next for FIBREE?
Achim Jedelsky: We already reached the first milestone that was set for end of 2018. That was to grow FIBREE to 20 location worldwide – as mentioned, we now already have 30 regional chapters. In terms of growth, our next goal is to reach 50 locations by end of 2019, what is very realistic given the response we received so far. We also started working on our industry report which is scheduled to be published in spring of 2019. And we are also looking for further sponsors. As NGO we offer free membership and therefore are depending on the support of the industry. We were very lucky to find in DLA Piper a partner that helped us by forming our foundation and in CBRE we acquired our first global sponsor and Rabobank is our first regional sponsor for Amsterdam. To find more partners like that is another important goal for the next months.
OCC: Where do you see blockchain technology 10 years from now?
Achim Jedelsky: I see blockchain as an integral part of the future IT landscape. It will be visible through new business concepts that it will enable. I always like the comparison of blockchain to TCP/IP, the protocol behind the internet. Nobody talks about TCP/IP today, but still, it enables most of the modern business models. I can imagine that it will be the same with blockchain.
The Foundation of Blockchain and Real Estate Expertise (FIBREE) aims to be the leading international network for exchanging knowledge between the real estate industry, the IT sector and blockchain technology. FIBREE was from day one active in seven European countries (Austria, Croatia, Germany, Italy, Netherlands, Switzerland, Slovenia) and consists of an active network of 2000 blockchain and real estate enthusiasts. The eight co-founders are experienced real estate experts and early blockchain adopters who can furthermore access a professional network of more than 15.000 like-minded professionals.