The state of the global property market
The property market is a fundamentally opaque and complicated network, where a few centralised portals — such as Zoopla and Rightmove (United Kingdom) — control access to the bulk of the market; such as connecting buyers to sellers, and commanding sizeable fees from estate agents to effectively provide an introduction service. In the property sales market, buyers lack information about sellers, previous transactions and activity on a property, severely limiting their ability to make informed decisions. Likewise, sellers are unable to access information about prospective estate agents, or how well their property is likely to perform in their local market. In the risky lettings business, landlords can never be entirely sure that they are taking on reliable tenants, and tenants cannot be sure whether they are signing a contract with a rogue landlord. In short, due to the opaqueness of the entire network, no one in the community is benefitting from this limited information.
The emergence of online estate agencies has somewhat disrupted the traditional estate agent model. As online estate agents do not have to pay for physical locations, this has dramatically reduced the overall operating costs of managing an estate agent and has led to cheaper options for the customer and property owners. While these online agencies offer consumers a slightly wider choice, they do not fundamentally solve the issues of: a) the poor transparency in the system, and b) the centralisation of the network, therefore this massive power is held in the hands of a few. On 2 July this year, the BBC published a gloomy article with the headline: “A quarter of estate agents in ‘financial distress’”. It outlined that even online agencies had suffered a fall in share prices, you only have to glance at articles like these to understand that the market needs significant reinvention.
The PropTech start-up OpenBrix will be that reinvention; leveraging the power of blockchain technology to decentralise the network and provide disintermediation, wrestling power from the property portal giants and placing it firmly in the hands of the end users — buyers, sellers, estate agents and landlords. Once decentralised, the network becomes transparent and information becomes freely available allowing users to make fact-based decisions. The property market has seen numerous attempts by new PropTech firms to simplify the processes of buying, selling and renting — including the aforementioned online estate agencies — but these have merely been working around the edges of a far greater problem.
Okay, so how will this work?
A quick primer for those whose knowledge of blockchain technology is a little unclear: the blockchain is an immutable and distributed ledger of transactions held across a network of potentially millions of computers. Very often the transactions are economic, but the blockchain can record any type of transaction or activity opening it up to a number of potential uses. Once a transaction has been completed and verified by the network, it becomes part of the blockchain, which will never be deleted but the information will become accessible to all. The network, rather than a centralised service, will control all resources, data and policies. Blockchain technology can also be used to distribute smart contracts.
OpenBrix will utilise its own token system (BRIX tokens), which will assign virtual identities to physical entities, and run a reputation system for all members of the system, based on a transparent algorithm. A simple and easy-to-use portal will be available to users in traditional browsers and on mobile. Both a centralised and decentralised back-end will be created, one hosting a CMS for users to manage property listings (for example), and the other holding all the network’s transaction information on the blockchain.
Why will Open Brix’s model solve the problem?
It is crucial to understand that OpenBrix will not replace existing property portals and that it will differ in a number of ways:
· Transparency of information will build trust among all members of the network. This transparency will also incentivise good behaviour among network members.
· The value of traditional estate agents with their expert knowledge will be recognised allowing them to reach buyers and sellers without the prohibitive subscription fees. In fact, the network itself will set the subscription fees.
· Estate agents will be able to provide a greater value-added service to sellers, by providing an easier and more detailed access to information about potential buyers.
· Sellers can choose to liaise directly with buyers without the need for an estate agent if they choose to do so.
· Landlords can screen potential tenants much more easily and vice-versa via the reputation and smart contracts system.
· OpenBrix will be a guardian of the community only.
If certain members of the community decide that they do not like the way the network is being run, they will be able to break away (or fork) to form a sub-network while still having access to all of the data available on the original network.
OpenBrix takes a fundamentally democratic and community-centric technological model, and applies it elegantly and simply to one of the most complicated and difficult-to-navigate sectors in the world.
The property portal market is worth $3bn in Europe alone, however aside from their ease-of-use, these portals do minimal work for their customers whilst generating huge returns for their shareholders.
Can OpenBrix really deliver this for the property market?
OpenBrix’s management board draws on the experience of a number of heavyweight names from business and politics, including Tom Fox, CCO at Arsenal Football Club, Rt Hon Garnt Shapps MP, and Tracey Follows, Ex-Head of Strategy at Wired Consulting. This robust management team is underpinned by a best-in-class development team, including UK Cabinet Office Technology Fellows, computer science PhDs, and entrepreneurs. OpenBrix founder and CEO Shahad Choudhury is a serial innovator in the PropTech domain, an expert member of the UK Parliamentary Blockchain Committee, and an ad-hoc advisor to the UK Global AI Governance Task Force.
Such is my belief that OpenBrix will revolutionise the market, in addition to investing in OpenBrix through Shoreditch partnership, I have also personally invested in OpenBrix through my private account. This is a once in a generation opportunity to get onboard a company that will lead the property revolution for the next decade and beyond.
Curious to know more?
OpenBrix has published a detailed White Paper, a cut-down “Lite Paper” and also published a roadmap on its website www.openbrix.io. The White Paper and Lite Paper both describe the founders’ plans for ensuring OpenBrix’s economic sustainability, and also provide greater detail on more technical aspects of developing the system.
This article is written by John Reilly. He is the Managing Director of the Shoreditch Partnership, one of London’s premier boutique start-up consultancies. A consultancy firm which has helped tech start-ups over the last 15 years from seed funding to series A and B investment. John Reilly is also the Co-Founder of OpenBrix.