Blockchain-driven digital transformation in the housing industry

Abstract

Purpose: The real estate industry is often highlighted as a significant beneficiary of blockchain-driven digital transformation (DT). This paper unravels blockchain’s role in driving rapid DT in the Finnish housing sector and its removal after market entry. Design/methodology/approach: This four-year longitudinal study used 35 semi-structured interviews. Findings: Blockchain was crucial in the early industry-wide DT, fostering innovation through shared value creation, delivery and capture while supporting collaboration and enhancing processes. The findings largely support blockchain’s theoretical benefits in reducing intermediaries, automating processes, minimizing errors, enhancing transparency and addressing data silos in real estate transactions. However, limitations – like the need for specialised expertise, scalability issues and centralisation tendencies emerged – ultimately outweighed the benefits, leading to blockchain abandonment. Regulatory commitment, contrary to expectations about regulatory barriers, regulatory commitment substantially boosted industry activities. While blockchain can spark transformation, maintaining momentum amid evolving market and regulatory developments may require more than blockchain alone can offer. Practical implications: Blockchain can drive early-stage DT even in traditional industries like real estate, addressing issues like intermediary reliance, manual processes, inefficiencies and errors. However, it does not guarantee long-term decentralisation as initially promised and depends on off-chain governance. Originality/value: This is the first empirical study on blockchain in real estate examining the drivers of a full-scale DT. It is also amongst the first to explore blockchain’s evolving role in successful industry-wide transformation based on a rare four-year study, extending insights into blockchain’s initial impact and subsequent limitations beyond the firm level.