Startup introduces blockchain-based property transaction platform
Wednesday, November 28, 2018
A Philadelphia-based startup, Kognition, has launched what it has dubbed as the "world’s first open network and open economy for smart property" to create a real-time stream of opportunities to generate revenue, reduce risk, optimize performance and drive ROI. The blockchain-based effort is called Koin.
Koin is designed to facilitate a "synergistic" relationship between smart property owners, traders, builders and vendors to optimize value for each party. Likewise, Kognition-backed Koin is meant to allow for the creation of a decentralized, autonomous smart property and can be built, managed and traded effortlessly and securely in an open economy built specifically for smart property, per a statement from the company.
Kognition CEO Matias Klein announced the effort in early November 2018 at the Dreamit x Bisnow Innovation Summit in Tampa, Florida, which this reporter attended. Klein said he hopes Koin will help Kognition decentralize and bring the secure benefits of blockchain to the property market, and he said he has "high aspirations" for the opportunities Koin presents.
"We believe this is a new way of doing business," Klein said at the Tampa event. "This is a tidal wave. It’s coming, and it’s going to be huge."
Let’s try to offer some perspective on the claims. Per Kognition, the platform is designed as a blockchain system to allow users to create, control and exchange smart property. Users can buy Koin tokens that can be exchanged for smart property, software, hardware and services. With an open governance system, the platform will be controlled by its users with each token offering one vote, the company says.
Here’s the gist: The platform, Klein said, is defined as any property whose ownership is controlled through blockchain on a decentralized ledger using smart contracts. It can be physical property like land and buildings, he said, but it can also be non-physical property like shares in a company.
One benefit of controlling property ownership in this way, Klein said, is the security offered by the blockchain, allowing ownership data to live on an unalterable ledger with no central authority and allows for "interoperability," so the property can integrate with other systems.
The free, open-sourced product, is designed to facilitate multiple types of commercial real estate transactions, Klein said, making it easier to fractionalize property ownership among multiple parties. Koin also can also facilitate digital title transfers and create unalterable mortgage documents.
Currently, Koin is being offered in private presale with tokens going to the public in April 2019.
"Property is transforming from analog to digital," Klein said. "It’s moving from physical to virtual. We believe that autonomous smart property is the future. We think it’s going to transform industries across the board."
In regard to the Koin token offering specifically, a total of 1 billion tokens will be minted. Of those, 25 percent will be reserved for Kognition. Kognition will lock up 90 percent of its tokens, which will be released on a 10-year vesting schedule.
Ten percent of the tokens will be donated to the Safer Smarter World Foundation (SSWF) charity to provide K-12 schools in need with free, AI-powered smart security systems. SSWF will lock up 90 percent of its tokens, which will be released on a five-year vesting schedule.
Ten percent of tokens will be reserved for Koin network validators to earn in the system; 10 percent of tokens will be reserved for a Koin project fund which will finance projects that extend the value of the Koin ecosystem. Finally, 45 percent of tokens will be offered to investors in private sales and a public ICO.
The concept of smart contracts was introduced by Nick Szabo, a legal scholar, and cryptographer in 1994. He came to a conclusion that any decentralized ledger can be used as self-executable contracts which, later on, were termed as "smart contracts."
These digital contracts could be converted into codes and allowed to be run on a blockchain. Though the idea of smart contracts came into existence long back, the current world works on paper-based contracts. Even if digital contracts are used, the involvement of a trusted third-party from the system cannot be eliminated.
Koin token holders will be entitled to vote on each proposed project. Approved projects will receive funding, marketplace spotlight and community support. If applicable, any tokens received from funded projects will be distributed proratably to Koin token holders of record. This incentive functions as a sort of special reward for long-term Koin token holders and community sponsors.
Koin token holders will also create and vote on the Koin road map, and the road map will always reflect the needs and priorities of the majority of Koin token holders. One Koin token entitles the owner of the token to one vote in all matters of Koin governance.
The global property market (real, intellectual, personal and digital) is the largest market in existence. Valued at $228 trillion at the end of 2016, the global real property market alone is already the largest asset class in the world, larger than all stocks, shares and bonds combined.
"It is theorized that in the not too distant future, this new category of smart property could very well become one of the largest asset classes in the world," Kognition says in a white paper that announces Koin.
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