“Bloom where you’re planted.”
It’s not just a saying for Lee Bratcher, Founder and President of the Texas Blockchain Council and Founder and Co-Chair of the U.S. Blockchain Coalition. It’s the credo that has led him to become a captain in the U.S. Army Reserves, a political science professor at Dallas Baptist University, and a leading expert in distributed ledger technology and digital assets across the United States.
Lee, a native of Austin, Texas, began his journey to blockchain while studying economics in Texas and peacekeeping at the U.S. Army War College in Pennsylvania. During his college and graduate years, Lee became a deep believer in the importance of property rights for economic growth. Soon after, he discovered Bitcoin and blockchain while working on a project at the Peacekeeping and Stability Operations Institute of the U.S. Army War College.
Thinking about the benefits of blockchain technology has led him to advocate for its integration into many industries, including commercial real estate. We caught up with Lee to learn more about his background, his views on the state of blockchain, and his vision for the future.
Please speak a little about your upbringing. You’re from Texas, correct?
Yes. I grew up in Austin and went to Westwood High School, northwest of the city. My dad was a teacher and coach there. From there, I went to a small college called Dallas Baptist University and joined the U.S. Army Reserves. I attended basic training and officer candidacy school in Fort Benning, Georgia, and have been in the Reserves for 14 years.
What made you decide to join the military?
I always wanted to be around people who were both patriotic and dedicated to service but also a bit rough around the edges. Being in the Army was a chance for me to lead and impact people personally and serve my country.
How did you meet your wife, Becca?
About 10 years ago, I was a police officer in Irving, Texas, and Becca was a nurse in a pediatric emergency room in Dallas. Today, we have three daughters, ranging in age from two to seven. I’m very proud to be their dad, and they’re very supportive of my career.
BLOCKCHAIN MISCONCEPTIONS
What sparked your interest in AI and blockchain?
Hernando de Soto’s book, “The Mystery of Capital,” was very influential in my academic journey, where I tried to understand how property rights led to greater success. de Soto found that the stronger the property rights are in any given jurisdiction, the more likely the communities there would flourish.
I discovered the Bitcoin white paper and blockchain technology while I was at the Army War College in Pennsylvania, doing research for the Peacekeeping and Stability Operations Institute. For me, there was a natural marriage of property rights in blockchain because blockchains can protect digital property rights and be used to protect real-world assets, like real estate.
When you think about technological advancements, particularly blockchain and AI, do you feel a sense of concern or excitement about the future?
There is a little bit of concern when we’re talking about emerging technology. Like the internet, some people use it for good, and others use it for ill. The same is true for blockchain and AI. We have seen bad actors use the digital asset space to take advantage of people, and we’ve seen
that in AI, deepfakes, and other concerning trends. But blockchain and AI together are quite powerful tools.
Blockchain provides a decentralized verification layer that’s transparent, private, and secure. It uses hashing and time stamping to ensure that people are interacting with the true artifact and not an alteration of it.
It can protect some areas of artificial intelligence, such as data privacy and compliance, royalties, and intellectual property infringement.
What is one of the most common misunderstandings people have about blockchain?
Some people think blockchain can’t be used effectively. Others believe it can be used for everything. Both are wrong. The Bitcoin blockchain was the first instance of the technology and has proven to be successful as a store of value and medium of exchange (for commerce, particularly in the developing world). Smart contract or programmable blockchains like Ethereum have also proven quite transformational but for different use cases than Bitcoin.
The reality is that blockchain is not a panacea. It only works when you have groups of businesses that may not trust each other.
Blockchain is most helpful when data is distributed across a consortium of different entities, organizations, or governments.
BLOCKCHAIN IN COMMERCIAL REAL ESTATE
How is blockchain impacting CRE?
In commercial real estate, some short-term use cases are already in effect, and some longer-term uses are probably 10 years away.
In the short term, which is happening today, some companies are tokenizing or fractionalizing a percentage of their assets, allowing these assets to be traded daily among limited partners. Instead of using an Excel spreadsheet or other centralized software to track trades, equity owners of the property trade tokens that represent an ownership stake in the building.
Typically, this is done with accredited investors only, but some companies are working to do it broadly with Reg D and Reg A securities filings.
What’s the long-term use case for blockchain in CRE?
In real estate, it’s essential to have accurate ownership information. Blockchain has a potential use case to serve as a parallel ledger, alongside our traditional methods for counties and land administration offices, for recording conveyances and deeds. Eventually, it’s possible that counties and government jurisdictions, along with title companies, could use blockchain as a faster, more efficient, and immutable way to track ownership of assets. I think that’s the primary use case that is perhaps a decade away.
Are there any pilot programs or successful implementations of blockchain technology you’re seeing within CRE, specifically within Texas or nationally?
There have been several different pilot programs globally. Some of the biggest success stories are in Sweden, Wyoming, and Vermont, which have all used blockchain for land administration. As it relates to Texas, there are a few different buildings that I’m aware of that have been tokenized. One of them, a Houston-based firm called MarketSpace Capital, has tokenized a portion of their building in Dallas. Red Swan is another company that has tokenized several buildings in Texas.
RESISTANCE TO CHANGE
Why haven’t more companies started to tokenize buildings?
One of the significant challenges is that there’s no national securities exchange where people can trade these shares. Instead, there are several alternative trading systems where these real estate securities trade. But there’s not any one place where an investor can go. We are seeing firms like BlackRock and JP Morgan tokenize money market funds. It’s just that there are fewer barriers to entry for the tokenization of money funds than there are for real estate. The real estate use case will take a few more years to heat up.
What has been learned from these early blockchain applications in commercial real estate?
My doctoral dissertation research essentially debunked the theory that blockchain was technically incapable of serving as a land administration technology. That’s not the case. I would say that the most significant impediments for blockchain to be used on the land administration side are political and stakeholder friction—friction from title companies or county clerks that would rather not, you know, change the way that they’re doing things. Real estate is one of the oldest and biggest industries in the world. Change is slow, and that’s OK.
How will the Texas Blockchain Council impact change in CRE?
We authored House Bill 5067 in Texas, which would have created a pilot project to study blockchain and land administration. That bill didn’t pass, but we hope it passes in the next session.
Encouragingly, a similar initiative—Texas HB 1043, filed by a Dallas-area Representative—has already passed the House and is heading to the Senate. It proposes a pilot for blockchain-based land administration in two Texas counties, signaling growing momentum around this issue.
We plan to expand our educational efforts over the next five years. I started the Council five years ago in a spare bedroom. It’s grown to five employees, an international board of directors, and almost 100 member companies.
In the coming years, we will continue to steward political capital for a large and growing industry, encourage best practices for safe and compliant use of the technology, and hopefully ensure that Texas is the jurisdiction of choice for implementing blockchain technology.
It’s evident that as blockchain technology evolves, it can provide unparalleled transparency, security, and efficiency—revolutionizing the way transactions are conducted and records are maintained within CRE. As industry leaders increasingly recognize and adopt these advancements, there is potential for both blockchain and commercial real estate thrive, paving the way for a more secure, efficient, and prosperous market.
Lee Bratcher is the President and Founder of the Texas Blockchain Council and Co-Chair of the U.S. Blockchain Coalition, advocating for the advancement of blockchain technology and its adoption across Texas and the United States. A captain in the U.S. Army Reserves, Lee holds a Ph.D. in Philosophy and Political Science from the University of Texas at Dallas. He resides in Richardson, Texas, with his wife and three daughters.