Searching for affordable living space can be a huge challenge and big effort, especially in the metropolitan areas around the world. Thousands of people go through an endless journey every year, looking for a suitable accommodation. Being a student in Munich, I experienced this situation a couple of times on my own. What comes along with this big number of renters, is the tremendous potential to benefit from their buying power. That’s why dishonest and dubious advertisements trap many people. Rental scam is en-vogue and steadily increasing.
1. What’s the daily life Pain Point?
So called “scammers” impersonate themselves as owner of a certain property, they know from e.g. Airbnb trips in that city. Often, they rent the apartment for some days and create a reliably looking advertisement, offering the living space for permanent rent on well-known websites like “Immoscout24”. This is commonly supported by fake rating comments from alleged renters in the past. Most of the time, the cheater state, that they inherited the property and they themselves live in another country. The inspection is then organized as follows: The possible renter transfers the deposit as well as the first rent (often thousands of euros or dollars) onto a bank account and is promised to get the key afterwards by postal delivery. If the renter decides to not take the apartment, the money could be transferred back to him. But the victims won’t see their money anymore. The scammer takes it and closes the bank account, in order to not be tracked any longer. In addition, the actual owner of the property doesn’t have any clue about the whole procedure and faces a huge loss in reputation.
2. How can Blockchain Technology help?
Transparency and immutability are the two characteristics that contribute the most to the fight against rent scam. Blockchain records all former transactions and contracts made by people who let rooms to foreign people e.g. on Airbnb. Said that, the actual owner of the property is known and his actions can be followed and tracked within the platform’s ecosystem. The apartment can be assigned to a unique tracking number, that has to be used by every transaction made and only the holder of the property can request this transaction. Building not only the data base of Airbnb on blockchain technology, but also the ones from other well-known rental sides (e.g. Immoscout24) can then guarantee, that an advertisement referring to one special living space can be backtracked to one single owner. It can also reveal, if one renter tries to use the apartment in another context and possibly commit fraud. Basing the whole ecosystem on a crypto currency would even more avoid potential scam. Deposits can be only transferred to the actual owner with that one unique hash function. All other transactions regarding one special property could be prohibited. Through the chain logic no other blocks than that which are part of the chain can be added. One could also think about assigning every house a certain kind of "wallet", as you might have heard it from the car industry. All contracts can than run via this wallet instead of the actual or in our case a fake owner.
I know that it is rather utopian those days to build such giant data bases on blockchain, but the further the technology progresses the more realistic it becomes to at least create a unique identification of the actual owner along the whole process.
Thank you for reading, please keep your eyes open for pain points in your lives! I am looking forward to your votes and comments! #LifewithBlockchain.
You can find my contact details on Linkedin or on my steemit profile Simone Geiger (@simone14)
Kudos also to Pascal Mehrwald (@pascalmehrwald), Benjamin Pabst von Ohain (@benpvo), Prof. Dr. Isabell M. Welpe and the TUM seminar team.
Hey Simone, thanks for sharing!
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