Yes these are mostly policy and regulatory hurdles but there are also some technical solutions that could be applied here.. The fact that a screenshot of a bank website or PDF passes as proof of funds for a 6 or 7 figure cash bid is laughable.. the idea that a concluded auction won’t fully settle for days, weeks or months is wild after being accustomed to bidding and auctions based on smart contracts. if a listing agent accepted USDC and a zk-proof as a proof of funds for the bid, the actual transfer into a solicitor’s holding account could be settled in minutes and with zero privacy invasion.
This is all purely hypothetical, and not likely to work across the board.. but it does present some areas that cryptographic tech could improve upon our traditional financial system
There's nothing about blind bidding that is solved by crypto in any shape or form. Moving to a blockchain approach for bids doesn't guarantee that you have opened bids, you can still allow people outside of the ecosystem to bid externally.
> The fact that a screenshot of a bank website or PDF passes as proof of funds for a 6 or 7 figure cash bid is laughable
Not really - a screenshot or pdf passes if the person you provide the proof to is happy with it. If you try and prove your funds with a screenshot from <local credit union in the phillipines> for a UK property transaction, they're going to ask you for more details, and they're going to ask you where the money comes from.
> if a listing agent accepted USDC and a zk-proof as a proof of funds for the bid, the actual transfer into a solicitor’s holding account could be settled in minutes and with zero privacy invasion.
For transactions under 250k faster payments guarantees transactions in under 2 hours, and anecdotally when sending my deposit for my last purchase, it was confirmed in about 15 minutes. For transactions over 250k, SWIFT transfers take a couple of days _because of regulation_, not because of technical problems. They're subject to AML checks.
> This is all purely hypothetical, and not likely to work across the board.. but it does present some areas that cryptographic tech could improve upon our traditional financial system
It's pie in the sky thinking, frankly, and doesn't even pass the sniff test. I completely disagree that it improves upon our financial system. The delays in these processes today are around AML/KYC checks, surveys, ownership dispute checks, etc. If you remove the legislation around AML/KYC checks, and streamline the surveys/ownership verification process, you could turn the entire process into 30 minutes for transactions under 250k, and some number between 30 minutes and 1-5 days for larger transactions.
Meanwhile, if you keep the regulations, don't fix the manual part of fetching deeds from the previous owner manually verifying them against a local land registry, and move the entire thing to the blockchain, I would bet you'd save a couple of days off a multi-month process, _and_ you still need to trust that your solicitor has correctly verified ownership, sourced your funds, etc.
The policy that's needed to change here has _nothing_ to do with trustless systems, because fundamentally the system you're interacting works on trust. Me telling HSBC to wire £250,000 to my solicitor for a property purchase doesn't actually send them £250,000, it just marks it to be cleared at a later point, but from HSBC's perspective the transaction has mostly happened at that point, and if the receiving bank is Lloyds, they're more than happy to trust that HSBC is good for the £250,000.
If all parties agree that the smart contract is what settles the auction, then yes it could be superior in some ways, and inferior in others. Bids would be transparently recorded for all parties to see, perhaps held in escrow or using zk-proof to accept each bid, and accounts could be shielded to provide privacy. Accepting a new bid outside of this smart contract auction or after this auction settles would be a violation of the agreement. It also means the auction can be performed through an automated system, without a listing agent facilitating it via emails and phone calls, which is significant as that same agent stands to benefit if all parties bid higher than they really need to.
> For transactions under 250k faster payments guarantees transactions in under 2 hours, and anecdotally when sending my deposit for my last purchase, it was confirmed in about 15 minutes. For transactions over 250k, SWIFT transfers take a couple of days _because of regulation_, not because of technical problems. They're subject to AML checks.
Not all buyers have this smooth of an experience. I'm not disagreeing with you, the UK has good banking infrastructure and if every country in the world could send value through Faster Payments to every other country in the entire world, there would probably be less need for crypto. It is a pretty good model for how financial systems can be improved to facilitate most average use cases.
We are approaching this from different points of view and with different shared experiences around how smoothly our first-world home purchases and bidding processes have been, and that's OK. The fact that you think a PDF or screenshot of a website frontend is "acceptable" proof of 6- or 7-figure cash bid is probably enough of an indicator that we should just agree to disagree and move on with our day.
> as a cash bidder you need to provide proof of funds to the estate agent,
Here, you don't provide them to the seller, you provide them to the solicitor acting on your behalf. Even if we removed that person from the chain, they are required to perform KYC on these transactions, so for regulatory reasons I still need to provide proof of those funds.
> blind bidding process is usually opaque and broken,
As much as I hate this, that's a (design) feature not a bug. Blind bidding doesn't exist in a vacuum, a seller is perfectly able to accept a bid from a party. Blind bidding is what a seller would use in a competitive market to extract the highest possible bid. If they wanted to accept a lower bid they could, by e.g. accepting their favourite bid at the second highest offered price.
> settlement times are extremely long in the order of months, not seconds.
This isn't because of transactions though, this is because mortgages take _weeks_ to come through, solicitors and agents take time to communicate/juggle multiple accounts/offers, and frankly they're still working with paper documents and off of the "who shouts the loudest gets service" system.
> - escrow and exchange of funds in some cases could in theory happen with smart contracts where both parties sign a message to perform the exchange,
The problem with using trustless currency for physical goods is that you need to trust the other party. If they just walk away without providing the keys or clearing the house out, it doesn't matter what it says digitally, you have a problem.
> which would reduce the significant commissions and fees.
On my past property purchase, I paid ~6% of the value in a transaction tax to the government, and ~£1000 in other "legal" fees. Meanwhile the actual transfer of funds cost me £0, (thanks faster payments - free almost immediate transactions up to £250k), and if I was a cash buyer, a bank transfer would have cost me £35. The fees are negligible even today.
I've been banging this drum for years now, the problems you're outlining are not technical, they're policy and regulatory. You can solve all of the above problems with regulation, like we've done in the UK. That said:
> - the process feels archaic compared to buying most other types of property.
Couldn't agree more. It feels like being dragged back to the stone age.