With the loss of confidence in a number of established crypto lending and funding platforms rendered insolvent by troubled financial markets and large over-leveraged positions, fears of widespread contagion affecting associated protocols and businesses increased.
Amid major layoffs and struggling financial markets, the general sentiment and outlook for crypto remains bleak, but the underlying blockchain technology remains unchanged – as its core potential has never been purely for the generation of speculative wealth, but to drive utility and innovation to solve real-world problems and issues.
There’s the ongoing narrative that NFTs (non-fungible tokens) and cryptocurrency will break away from traditional finance and serve as a hedge against issues like inflation, but only time will tell if that’s a wishful thinking or more than a dream.
One thing is certain – the practical applications of blockchain exist far beyond those hopes, and bear markets are the perfect time to push aside distractions to focus on utility and grounded use cases.
Now is the time for users, builders and regulators everywhere to reinforce the meaningful impact of technological innovations, as they will serve as a solid foundation and become more pronounced as the haze of euphoria associated with the quick wealth fades.
Wisdom in mistrust
In the Asia-Pacific region, we are seeing countries like China take a tough approach to speculative assets against the hype surrounding NFTs, especially when markets were booming. This conservative approach is starting to look wise as the value of seemingly innocuous digital images and encapsulations of meme culture declines with the health of financial markets.
Although China is not bullish on cryptocurrency, it is on blockchain technology, introducing its own central bank digital currency, e-CNY, and developing a backed blockchain-based service network (BSN). by the state. The most recent developments have seen the announcement of the Spartan Network, which aims to be the new international network for public non-cryptocurrency chains.
It may come as a surprise to some, but blockchain has long been used as evidence in court cases in China since 2017 and continues to gain traction, especially with blockchain being a priority in the Chinese government’s five-year plan from 2021 to 2025. .
There is logic behind the seemingly contradictory approaches that governments and regulators are taking to embrace blockchain, but not speculative wealth generation, as they recognize a key fundamental benefit of the technology.
Security, transparency and immutability in law
So where do we see real use cases for blockchain technology embedded in our existing society beyond the hype? One of the most promising use cases for enterprise blockchain is not just in unique JPEGs, but to prove ownership and chain of custody in the legal space.
More countries will stand to gain by taking a page out of China’s book on adopting blockchain technology to help courts, as it would improve the accessibility, affordability and security of court proceedings. Printing documents is often considered much safer than transferring assets and legal documents online, but tokenization is changing that. As the technology allows any asset including digital claims, certificates or proof of ownership to be accessed on the blockchain, this provides rights in a more convenient yet secure and validatable way without intermediaries.
Lawyers, notaries and parties seeking to make legal claims can all benefit, as providing evidence, establishing proof of ownership or a deadline for copyright, intellectual property claims and more becomes a much easier and transparent.
Legal costs can also be prohibitive for parties seeking to defend their innocence or ownership of assets, reducing the need for intermediaries and lengthy processes making the litigation process more accessible.
As financial hardship increases and markets weaken, technology that makes essential processes such as litigation more affordable will prove increasingly valuable.
It wouldn’t be a stretch to see a future where notarization or blockchain proof becomes commonplace, but technology vendors and builders need to work closely with governments and regulators to develop a reliable and secure infrastructure to to guarantee the legitimacy of the evidence. not compromised.
Advantages of timeshare
Places like Hong Kong are known to be one of the most expensive for housing, and rising inflation is further exacerbating cost of living issues. Due to these factors, real estate is often categorized as an investment option for the wealthy only, as it typically requires high capital and can take a long time to liquidate.
Traditional registration, documentation and intermediary requirements make ownership an even longer and more expensive process. Tokenization can dramatically speed all of this up because it allows proof of ownership to become accessible and tradable on the blockchain.
Time stamps for property transfers also provide immutable records, removing the need for real estate agents and middlemen, making the process more affordable.
For the less affluent and places where housing prices are increasingly out of reach, aspiring homeowners can also choose to buy a portion of a property represented by the digital tokens and grow their holdings over time. time with the condominium instead of having to buy the entire property at once.
Apart from this, cash positive real estate income can also be tokenized, allowing landlords to have a share of the rental profits or the growth in the value of the property.
Need to reduce bureaucracy
Although blockchain has enormous potential to make real estate much more accessible, affordable, and liquid, there are many hurdles that need to be overcome before it can scale to an industrial-grade level.
Currently, countries, regions, and jurisdictions view tokens as insufficient legal basis for ownership or are too stringent in regulating them as securities. These extremes raise security concerns or limit the application of blockchain and tokenization in real estate by making it inaccessible due to bureaucracy or too expensive to be feasible due to taxation.
While creative compliance solutions such as non-fungible assets (NFA) are being developed, more education to address the lack of fundamental understanding of blockchain needs to be done – government and authority initiatives to support Blockchain applications in real estate will also further bolster such efforts.
Conservative and strategic nations like Singapore are already trying to experiment with blockchain to address illiquid asset and fractionation issues through Project Guardian, and it would not be surprising to see others in the APAC region follow in these footsteps.
While many in the crypto community may object to this notion, some form of centralization and regulation will help minimize the potential abuse of blockchain technology and improve its scalability, efficiency, and adoption, allowing meaningful use cases to grow reliably and steadily over time.
Many other blockchain applications can also help solve real-world problems and problems, but real estate and law are two key sectors that would benefit from accessibility and affordability amid growing global financial difficulties.
However, for its full potential and benefits to be realized, blockchain vendors and regulators must stop seeing themselves as opponents, but as partners and educators to correct misconceptions and improve understanding of the technology. underlying.