How to a Build a Real Estate Platform on Blockchain?

Are you an entrepreneur focusing on the real estate sector? Congratulations! You have a significant opportunity gap to explore.

Home sellers in the US may need up to pay 6% of the home selling value, an exorbitant sum by any standards! Real estate trade lobbying groups want to continue with this, and you can read about it in “Building an international real estate platform through the blockchain”.

You can disrupt it with the power of blockchain, and you can create a real estate platform to bring down these fees drastically. In this article, I will explain how to build a real estate platform on the blockchain.

Contents

Real Estate Blockchain Platform advantages
Real Estate Blockchain Platform development approaches
Build your teams development capabilities
The 1st approach: Real Estate Blockchain Platform development with Lisk
Code, test and deploy your smart contracts: the common step in both approaches
Real Estate Blockchain Platform development 2nd approach: Ethereum DApp

Real Estate Blockchain Platform advantages

Look at any industry, and if you find middlemen and tampering of records, rest assured that blockchain can disrupt the existing business model. It‘s not confined to business, blockchain can improve government service delivery too.

This is because of two key promises of blockchain:

  1. Decentralization: Blockchain achieves this by building a peer-to-peer (P2P) network, where ’nodes’ i.e. computers on the network all have the same authority. They all store the entire information in the blockchain, hence the network is permanent. After all, how many thousands of computers will hackers try to compromise?
  2. Immutable record: Modern cryptography and rigorous consensus algorithms protect data recorded in the blockchain, hence it’s tamper-proof.

Read more about the advantages of public blockchains in “Public vs Private (Permissioned) Blockchain Comparison”.

While Bitcoin emerged onto the scene in 2009 with these advantages, the Ethereum project introduced smart contracts. These are pieces of code that would execute automatically, and no one tampers with them after deployment.

The code is open-source, hence fully transparent. Depending on the fulfillment of certain conditions, it will transfer assets like cryptocurrencies automatically, whereas the execution is irreversible.

The real estate sector is heavily controlled by middlemen and their powerful industry lobbying groups. The paperwork is complex. If you don‘t have the subject matter expertise, you will depend exclusively on middlemen, for e.g. brokers.

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Real estate also involves high-value transactions, where people often use their entire life‘s savings to buy a home. This makes securing transactions very important, and, in turn, increases paperwork.

There is a significant opportunity for you to bring efficiency, transparency, and decentralization into this sector. Read more about it in “The Blockchain For Real Estate, Explained”. The good news for you is that you now also have the tools to bring about this improvement!

Real Estate Blockchain Platform development approaches

I have highlighted how ripe the real estate sector is for a blockchain-powered disruption, and to be sure, start-ups are already attempting that! For e.g.:

  • DeedCoin: This is a blockchain-powered real estate network that operates in all 50 states in the US, covering over 160 cities. They target to reduce the home sellers fees to 1%.
  • RentBerry: They are an established home rental service and has a successful track record in the US. Now, they are also introducing their blockchain platform, with BERRY token.
  • Atlant: This start-up will offer P2P rentals as well as tokenized ownership of properties.

You could also make a start, and I will explain two approaches here for building an international real estate platform through the blockchain.

The 1st approach involves building blockchain-based real estate platforms using LISK and coding your smart contracts. LISK is a platform to build blockchain applications.

You can think of Lisk as a ’Platform as a Service‘ (PaaS) to develop blockchain applications. A PaaS provides you with cloud infrastructure, operating system, middleware, database, and programming language runtime environment. You bring your code and data. For e.g. Google App Engine is a PaaS.

With Lisk, you can create a sidechain, i.e. a blockchain attached to the main chain. You can customize it, code, test, and deploy your app on it. You can also create your own crypto token. Visit the Lisk website to know more about this platform.

The 2nd approach is to create an Ethereum-powered real-estate platform. You will use the Ethereum virtual machine for that, besides you will create a token for it. You will also create your smart contracts.

There are trade-offs in both approaches. If you use Lisk to create a real estate platform with blockchain, you will need to separately integrate your smart contracts with it, since Lisk isn‘t a smart contract platform. However, your team can code in JavaScript, and that‘s a big advantage since many developers know it. Also, you will run your app on a sidechain, hence it will have better scalability.

If you make own real estate blockchain platform using Ethereum, you will have to contend with the scalability and performance issues of this network. However, you can deploy your smart contracts on the same Ethereum blockchain, hence, you don‘t need a separate integration.

Ethereum and Lisk don‘t exactly belong to the same category, but for a quick comparison, you can read “Ethereum Vs Lisk”. I will also briefly describe a 3rd approach that you will have in the future when the BrikBit project delivers their platform. You will then be able to build a real estate platform on blockchain using their platform.

Build your teams development capabilities

workforce team working business people in motion motivation for success.

Irrespective of the approach you take, your team needs to build the necessary blockchain development skills. Consider the following learning resources:

  1. Ethereum Development Tutorial in GitHub;
  2. Blockgeeks Solidity guide, which will help you with the language to write smart contracts;
  3. The DAPPS FOR BEGINNERS website;
  4. CryptoZombies interactive course;
  5. Lisk documentation.

Additionally, you need UI/UX design, testing, and project management expertise in your team. The 5th is for the Lisk approach only.

The 1st approach: Real Estate Blockchain Platform development with Lisk

In this approach, you first need to buy the LSK crypto token to operate in the Lisk platform. You need to first set up a Lisk wallet. Subsequently, you can buy Ether and exchange it into LSK. Be sure to securely store your passphrase, and you should never share it. Check out “How to buy Lisk” for a detailed set of instructions.

Now, you will create your own blockchain using Lisk. You need to use “Lisk Commander”, i.e. their tool to create the ’Genesis block‘ of your new blockchain. This is the first block of your new chain.

With Lisk Commander, you can set up your sidechain quickly. This tool takes key elements from the Lisk Core, for e.g. P2P infrastructure, and ledger, and add these to your sidechain.

You will also use a useful library called “Lisk Elements”. This has APIs, consensus algorithms, and various other useful components. Your sidechain now has extensible transaction types, cryptographic security standards, and the other required elements.

Your next task is customizing your sidechain, including creating a crypto token for your app. You can do these using “Lisk Hub”, while also using the Lisk Commander. Following this workstream, you will also need to integrate your new crypto-token with your sidechain.

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The Lisk documentation is easy to follow and provides instruction for Commander, Hub, Core, and Elements. Check it out in the “Lisk Documentation”.

Now that you have your sidechain, you can start with your application development. Lisk API makes it easy for you to create an engaging UI, and this is another advantage of this approach.

The platform also has popular libraries like React, besides you can develop for iOS and Android platforms too. You can also develop using JavaScript. Lisk provides you with testing and deployment tools.

Code, test and deploy your smart contracts: the common step in both approaches

Whether you are developing using the Lisk platform or an Ethereum DApp, you will need to code, test, and deploy your smart contracts. While you decide what you will code in your contract, you can use the DeedCoin smart contract GitHub repository to get an idea or two.

Test your contracts onto the Ropsten Ethereum testnet

While there are different testnets for Ethereum, I will use Ropsten in this guide. You don‘t need real Ether to test here. For commands, I will refer to a project that Merunas Grincalaitis did, and explained it in “Ultimate Guide to Convert a Web App To a Decentralized App Dapp”. I will refer to it as the “reference article 1”.

Follow these steps:

  1. Install MetaMask, i.e. a Chrome or Firefox browser extension that allows you to connect to blockchain using your smart contracts. Configure it, including setting up your secret passphrase, following the instructions in the “reference article 1”.
  2. Change your MetaMask connection from the Ethereum mainnet to Ropsten testnet.
  3. Code your smart contracts using the Remix IDE. It‘s a web DApp, you don‘t need to install any tool for this.
  4. Get dummy Ether using the MetaMask faucet.
  5. When you had installed the MetaMask extension, it had injected the Web3.js into your browser, which is an Ethereum JavaScript API. This allows you to communicate an Ethereum node. Ensure that your MetaMask connection to Ropsten is still open so that Web3.js can work.
  6. Now, switch to the Remix IDE, and deploy your smart contract using the ’Create‘ option. You need to confirm the transaction in MetaMask.

Follow the “reference article 1” for detailed commands.

Deploy your contracts onto the Ethereum mainnet

Now that you have tested your contracts, it‘s time to deploy them onto the Ethereum mainnet. You can consult my earlier guide on this topic “How to Deploy Smart Contract on Ethereum?”.

You need to do the following:

  1. Create an Ethereum EOA account, i.e. user account, using the “eth-lightwallet”. Secure your private key.
  2. Install and configure the popular blockchain client “testrpc”.
  3. Install Web3js, which allows you to communicate with the blockchain. You need to configure it, and for this, please refer to “Getting Started as an Ethereum Web Developer” for the commands. I will refer to this guide for other commands too, hence, let‘s call it the “reference article 2”.
  4. Install and configure Truffle, this is the deployment tool you will use.
  5. Update your config.js file, however, for this, you need to open testrpc and run an instance. Follow the instructions in the “reference article 2” to update private and public key into the config.js file.
  6. Buy real Ether for your smart contract deployment, remember to budget for the miner fees too.
  7. Use “truffle deploy” command to deploy your smart contract. Consult the “reference article 2” for detailed commands.

You have now deployed your smart contract onto the Ethereum mainnet. For the Lisk approach only, you need to separately integrate your contracts with your app. Check this YouTube video from the Lisk team for instructions.

Real Estate Blockchain Platform development 2nd approach: Ethereum DApp

In this approach, you will create an Ethereum DApp using the Ethereum Virtual Machine (EVM), and an ERC 20 crypto token. The ERC 20 token standard is the best-known, and most wallets already handle this standard. Read more about it in “What is ERC20 Token standard and why is it useful for your ICO?”.

You will find many steps from the 1st approach relevant here too, and you can follow the exact same instructions. The common steps are the following:

  1. Create an Ethereum EOA account using “eth-lightwallet”.
  2. Install and configure the testrpc client.
  3. Install and configure “web3js”.
  4. Install and configure Truffle, which you will use for testing and deployment of your smart contracts.
  5. Update config.js file with your private and public keys.
  6. Get dummy Ropsten Ether for deploying your smart contracts onto the Ropsten testnet.
  7. Buy real Ether to deploy your contracts onto the Ethereum mainnet.
  8. Code, test, and deploy your smart contracts onto the mainnet. Since you are using the Ethereum network, which is a smart contract platform, you don’t need to integrate your contracts separately as you did for the Lisk-approach.

I had earlier described how to build similar DApps in “How to Build Online Marketplace on Blockchain Like OpenBazaar?”, and you can consult that guide.

However, since you won‘t use the Lisk platform here, your UI/UX team need to design and develop the UI entirely on their own. There is another crucial difference between the Lisk-based approach and this.

Lisk platform allowed you to create your own entirely different sidechain for your app. That enabled you to address the scalability aspect. However, in this Ethereum DApp-based approach, you need to address the scalability yourself.

Most scalability-improved proposals for the Ethereum blockchain network are still work-in-progress. For e.g., the “Casper Protocol” for transitioning Ethereum from ’Proof of Work‘ (POW) to ’Proof of Stake‘ (PoS) implementation will happen in a phased manner.

You can avail one scalability approach now, and that‘s building your own ’DAppChain‘, i.e. a sidechain for your DApp. For this, you need to the Loom Networks‘ SDK. They allow you to build DApp-specific sidechains that use the ’Delegated Proof of Stake‘ (DPoS) consensus algorithm.

Read more about scaling your Ethereum DApp in “How to Scale an Ethereum Dapp”.

In the future, you will have a 3rd approach to build a real estate platform on blockchain

BrikBit is a project on the Lisk platform, and it‘s still work-in-progress. Once they deliver their platform, you can build your own real estate blockchain platform using it. The BrikBit platform will focus exclusively on the real estate sector.

You can build your system to cover apartments as well as residential & commercial real estate. You can cover the whole gamut of transactions including buy, sell, and other operations. You can follow their progress on the BrikBit website.

To summarize, I have described two approaches, one using the Lisk platform, and the other is create an Ethereum DApp. While you need to integrate smart contracts separately in the Lisk-based approach, whereas, for the Ethereum DApp approach, you need to create sidechains to address the scalability issue. You need to determine the approach based on your teams’ expertise level.

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