Do you still think ‘one listing, one buyer’?
02 Aug 2017
Blockchain technology is big in the financial sector (think fintech, bitcoins etc.), and soon it might also have an application for classifieds.
Well, it’s still early days, and “soon” is probably a bit sensation-seeking in this context. But, it can’t harm to be aware early of something which might (or might not) turn into a new income source for classifieds in future.
Until now, we’ve always thought of selling things as units to single buyers. And classified sites are built to cater for that kind of listing.
But, what about big-ticket items, such as your home, your yacht, your Picasso, your Bently? They are often difficult to turn into cash. Simply, because there aren’t that many buyers around. And, it takes time to turn them into cash; time which you may not have. And its costly to turn your almost-new yacht into cash. Because you need an agent, and he takes a big cut.
As I write, I’m thinking this article is probably rather aimed at classified sites focused on luxury goods (for instance, JamesEdition, Worthy, EBTH), than at Craigslist. But, it’s very definitely aimed at all real estate sites in developed real estate markets, with sections aimed at property investors, and at property developers. It may also be interesting to auto sites with vintage cars. There may be more applications.
So, here is the new thing: Why look for a single buyer? Why not sell your fantastic home overlooking the ocean to several buyers and issue them with blockchain-secured title deeds? Yes, you can now list your big-ticket item and sell it quicker to a number of buyers, and cut the agent out.
It’s called fractional ownership. We know it already from the real estate development industry.
In India, the first blockchain-driven classifieds site for big-ticket items is online and is reportedly (the founder says so) doing good business. It’s called Liquid Asset Token (LAT). It’s at LaToken.com. It enables you to sell shares (or fractions) of your holiday home.
According to the lads behind LAT, share transactions are registered, records are kept and are traceable, and ownership is verifiable. All without the cumbersome securitization procedures of old. The site contains the “smart contracts” needed for transactions, and even has software that tracks and auto-creates new agreements for individual asset types (property, auto, art etc.).
Apparently, there will soon be a secondary market for these fractional title assets, as well, where you can resell your share in the beach property if you didn’t like the beach, or the water was too cold, or the asset’s market value had risen handsomely.
Who will ever be so stupid as to buy a fractional title (online) from a stranger in a property he’s never visited? Well, that’s what I asked when I first heard of bitcoins: Can’t work, I said. A currency is only a money unit, because of trust … and who’s going to trust the obscure 20-year-old IT guys behind bitcoins not to flood the market (debase the value) when they suddenly need money? But, I’ve had to swallow my words. Hell, even Naspers has invested in bitcoins.
In fact, bitcoins are being devalued, as I write, but that’s a topic for another day (read more here).
So, maybe it’s ‘bye, one listing, one buyer’, and ‘hello, one listing, many buyers’, and ‘hello, an entirely new kind of marketplace – for secondary trades in fractional titles of your Picasso’. Should this scenario realize, we’ll be in a whole new ballgame, as far as classifieds profitability is concerned.