Q: Why did RICS publish an insight paper on blockchain, and what should surveyors know about the technology?
NM: It's important surveyors realise that this technology could mean big changes for the profession in the future. The extent of those changes is not yet fully understood by the sector or by other professions.
Blockchain is a general-purpose technology that could transform society, in the way electricity, the car or the internet did, but we don't quite know how yet. It could change the way we do business and the way transactions work. If it is adopted widely then there will be changes, because the brokerage and the real-estate part of the profession is largely transactional.
Q: Is adoption of blockchain technology currently an issue?
NM: It's hard to adopt. It's quite costly to implement, and if you have an existing system that works why would you change it? There has to be some significant benefit in taking it on, not just the boosterism of the technology companies. There's a history of technologies that never reach the implementation stage. If you back the right one it will pay off. We don't know yet which category blockchain is in.
Q: What is the timeline for this?
NM: It's different for different types of impact. But the earliest that things might happen is still five or so years away – and some things that are furthest away may not happen until 2040–45. So we are talking a few decades, not a few months or years.
The problem with these predictions is that we don't know how quickly all the necessary pieces will come together, and at that point things could happen quickly. Think of the statement attributed to Thomas J. Watson, chair of IBM, who said in 1943 that he thought there was a world market for 'maybe five computers'.
Q: What are the advantages of blockchain for RICS members?
NM: The great promise of blockchain is to remove a central, trusted intermediary. In the case of land transactions, the land registration is relied on because there's a central registry in most countries. If blockchain were to allow that intermediary's role to be diminished or removed, then we could make a transaction without it. Most people transact between each other using a bank as the regulated, trusted intermediary. The dream of blockchain is to remove that intermediary so that two people can transact with technology ensuring trust.
But there are some issues about regulation. The dream of an unregulated finance system will not go down well with governments and people who require stability in the economy. Blockchain's main use at the moment is in cryptocurrencies such as Bitcoin, but fortunes have been made and lost through market fluctuations. This isn't good for professionals who want reliability for their clients. The professional or firm is a trusted intermediary because they can value a property, and people rely on that valuation because RICS is the regulator and the profession is trusted. This isn't good for professionals who want reliability for their clients.
The thing about the property profession is that there's always a physical property involved. We still need to verify its condition as part of the transaction, and this is nothing to do with blockchain. Some areas of surveying will not be affected by blockchain but others will. Those surveyors who, like lawyers and accountants, are involved much more in the documentation process may feel blockchain's effects first.
Blockchain offers potential for smart contracts as well, which could affect facilities management, another big area of property. All the transactions involved from the supply chain, light bulbs and toilet rolls, coffee and even maintenance of the building could easily benefit from being recorded on blockchain. There's an opportunity but practitioners must be nimble and technical.
Dr Nigel Mehdi FRICS is a departmental lecturer in sustainable urban development at the Department of Continuing Education in the University of Oxford email@example.com
Related competencies include: Cadastre and land administration, Procurement and tendering, Property management, Purchase and sale