The Merging Roads of Blockchain and Commercial Real Estate

Lumicre Exclusive Interview: CEO of Ghost Discusses The Merging Roads of Blockchain and Commercial Real Estate

In a world far far away where the depths of the internet and money collide, a new data and currency system was born. It can be hard to keep up with rapidly advancing technology, but unless you have been living under a rock, chances are you have heard the term blockchain. I had the great pleasure of interviewing an industry expert last week–CEO of Ghost. We discussed blockchain as it relates to commercial real estate and I learned a handful of benefits of implementing the technology in our business world. With no predisposed opinions or in-depth knowledge of blockchain, I walked into this interview with an open mind and the discussion far exceeded my expectation. I gained a clear image of the benefits of block technology and was left with a lingering thought —  Is Crypto the New Way Forward with Commercial Real Estate Investing? 

Ghost Privacy Coin Created By The Antivirus King Himself

The Infamous John Mcafee left his legacy staked not only by his antivirus empire but as well as a Ghost. Mcafee co-founded the privacy coin that makes you a ghost when creating transactions online rendering you anonymous. Ghost transactions use protocols such as RingCT, Bulletproofs and Dandelion++ to shield transactions on the blockchain. Ghost is a proof of stake network controlled by GHOST coin holders and users. Ghost has no central company or owner, and is maintained by the community. With Ghost, transactions are processed on a chain in under 120 seconds with just a fraction of a penny paid in transaction fees. 

Read Below the transcribed Interview with the elected CEO of Ghost. As we dive into his thoughts on blockchain’s impending impact on commercial real estate.

Tell us about yourself and what you do.

“My name is Jake Waters. I am the Chief Executive for Ghost. For those who do not know what Ghost is, it is a decentralized proof of stake privacy blockchain. We focus on ensuring anonymous transactions which can’t be tracked because we believe privacy is a basic human right.”

Share the history of Ghost. How did it come to be? What was the inspiration behind the creation of the privacy coin?

“The inspiration behind Ghost is dedicated towards two of our co-founders, one of which is more infamous than the other. His name is John Mcafee. John McAfee is the founder of Mcafee antivirus software. John’s role in Ghost was more so a consultant and not a hands-on manager.

The other co-founder and inspiration behind Ghost was Josh Case. Josh had a long history of freedom fighting, like John, and advocating for rights centering around privacy concerns. It all came to be when the two got together for an interview for one of Josh Case’s upcoming books. The whole idea centered around creating a decentralized, private crypto coin. Hence, Ghost was spun up.”

Have you seen more involvement in the space? Pushed towards more businesses adopting the use of blockchain and crypto in their everyday lines of business?

“Oh, absolutely we have. If we take a look at some of the larger institutions, that are Fortune 100 companies, you can see there has been a giant leap into learning about the technology and the different cryptos that are currently out there. All while trying to grasp an understanding of will it be a best case scenario to adopt and use this technology in their line of business, and how it could make them more efficient.”

So for those who don’t know what blockchain is, can you give us just a quick rundown? Pros & Cons? What is it exactly?

“Right. I don’t know if I have any cons to say about it, but basically what blockchain technology is, it’s a distributed ledger that records data across a system of nodes that are linked together maintaining the system. So for example, we’ll stick with Bitcoin for this. Bitcoin, which is blockchain technology. Bitcoin is a decentralized peer-to-peer network, meaning there is no central authority running and maintaining the network. And there is no one central authority that has a say over what happens in the network. As consensus is made up of the use of the community known as miners, and any changes that happen to the network are all voted on by these miners.”

How would you see a primary benefit for real estate and blockchain? How do you see those roads intersecting in the future?

“When I look at real estate as a whole, I first think about commercial real estate, and how much money is wasted on fees such as wire transfers, account fees, and holding fees from escrow accounts. These real estate companies have to, you know, account for that when they’re adding up their costs of doing business. So one of the biggest pros that blockchain has to offer is that when you close the deal right, and the client is ready to pay, traditionally, this would go into an Escrow account. And so all was good, and then the funds are released to the broker or the firm, whoever it may be. To eliminate that and make the process faster. The firms could use Bitcoin, whose transactions are near instantaneous, and the fees are microscopic. So, e.g., if you’re going to be closing a deal out for a commercial property worth $500 million, you know, for a simple wire transfer that that might cost you around 5 million to do, whereas sending the funds through Bitcoin, the fees are pennies on the dollar, and they cost you $0.02 entirely to send the money”

How can NFTs and smart contracts be utilized in this industry?

“An NFT stands for a nonfungible token. More notably, the Ethereum Blockchain, which is more or less known as blockchain 2.0, incorporates the use of these smart contracts. And what a smart contract is, is there is an agreement between two parties, if Bob and Sarah have an agreement for a set amount of funds, they can send each other these funds via a smart contract, and if something goes wrong on their deal, then the funds both get sent back to their respective parties. So there’s no instance of misappropriation for the funds, and there’s no collusion involved. There’s no 3rd party that can take over, and there’s no fees involved. That’s all automatic, and it’s all decentralized. So speaking about Blockchain 2.0, specifically Ethereum. More recently, what has come to the Ethereum blockchain is these NFTs. And what an NFT is, is an NFT can represent music, property, it can represent any rights because it has a digital ID that is specifically tied to this tokenized asset, and it can’t be altered at all. So I think, for the use of commercial real estate and using NFTs, is that an NFT could represent a property and that property right is attached to the NFT, so whoever has the NFT, whoever is holding that NFT, is the beholder of that property outright. And there is a strict outline of the property rights that is embedded in the NFT, as well as all the history of the property in the NFT.”

For those who are confused about tokenization in real estate and as a whole, do you see that as something feasible long-term? What are your takes on tokenization?

“In the case of tokenizing [commercial] real estate assets, I don’t necessarily see it being a direction that these companies should head towards. If they were going to raise capital via tokenization, that may be another way. But as far as a property being tokenized, the legal framework around that and the regulatory concern is beyond our comprehension right now, as there’s no oversight or guidance on that.

If you’re going to split up a property and tokenize it, you could have 100 or 100,000 different people owning this property, because each token, however, however it’s divided or tokenized, would represent ownership of that property. This could be good for a REIT. For those that are familiar with a REIT, REITs are basically shares of real estate companies that represent their properties. So you’re owning these real estate companies, you’re owning these real estate assets that are a part of this one company.

So that could be a move that these companies go to. And it would also help micro-investing. Tokenization could also help investors who may be not able to afford something on their own, that could go in with a few other people, like a group of friends per se.”

Could micro-investing be a way to make owning something easier? Is that correct? 

“Yes. So for micro investors, on the grand scheme, for those who don’t have the capital, to necessarily buy properties outright, or even the means to, tokenization could solve that problem for these smaller players. And then, as you mention a group of friends getting together funds for the allocation of tokenized assets, they could create a larger share when their organized holdings are added together.”

That’s all the questions I have pertained to commercial real estate. Is there anything you would like to say about Ghost? Any new things coming in the future for Ghost?

“We are gearing towards the release of our automatic Automated Veteran Rewards, which is a reward structure that was set in place in her blockchain that mirrors master nodes without the use of master nodes. So this whole process will further decentralize our chain. And in Q3, we are hoping to release our Ghost Chat, which is instant messaging over blockchain, this is fully anonymous and is encrypted via AES-256. For those that don’t know, if you were to try and crack AES-256, it would take 2000 trillion years, given the most powerful computers today. So we’ve got some very exciting things coming to our blockchain, as well as a few partnerships we are in talks with to further advance our ecosystem as we make it easier for those to take back their privacy when transacting in everyday life.”

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