The reluctance of banks, insurance
companies and private equity firms to invest in blockchain
technology is one of the largest obstacles, according to new
research by BrickVest.
Over a quarter (28%) of investors
highlighted the interoperability issues between private
networks such as banks and other financial institutions, and
that one party will have to manage all of the protocols. 19%
thought that the scalability of the technology would present a
challenge while 18% flagged the operational risks associated
A lack of knowledge and education among
industry participants was also perceived as a further
challenge. Less than half (44%) of property investors claimed
to be "familiar" with blockchain and just 2% identify
themselves as "very familiar."
BrickVest, an online real estate
investment platform, believes that blockchain technology can
improve the inefficient structures of financial markets. The
company is currently prototyping blockchain as a repository
system and has filed a provisional patent.
"We believe that that middle man is
becoming redundant and P2P systems that benefit investors are
the way forward," said Emmanuel Lumineau, CEO of BrickVest. "It
is for this reason that we are filing for a patent."
A third (31%) of investors felt that
blockchain’s adoption would be opposed by
financial gatekeepers such as notaries and trustees whose
existence is threatened by the new technology.
"The main advantage of blockchain is that
transactions have the potential to be significantly cheaper,
faster and more transparent," said Lumineau. "Decentralised
ledgers are able to keep secure transaction records between two
parties, completely independent of any authorities, making
tampering with this record difficult."
Lumineau added: "There is no one entity
that controls blockchain, meaning that participants can verify
the transactions and they are not forced to rely on one entity
to keep track of balances."
On the real estate side in particular, 70%
of property investors believe that regulators are unprepared
for blockchain’s introduction. Despite the
challenges, more than half (56%) of real estate investors
believe that the sector will eventually adopt blockchain
technology for transactions.
"Blockchain technology makes particular
sense for secondary markets such as real estate investments and
equity crowdfunding, which previously wouldn’t
have been viable due to high transaction costs," Lumineau