Blockchain has been touted as the future of land registries due to the myriad of benefits it offers. Firstly, it has the potential to greatly reduce property fraud at a time when this has become a growing concern for HM Land Registry. Each property would be uniquely coded and linked to a smart key which would be held only by the owner.
Blockchain technology also underpins ‘smart contracts’, which are programmable contracts that self-execute when certain conditions are met, and offer the possibility that transactions could complete much more quickly when combined with a blockchain registry. For instance, title to the property could be transferred to the purchaser automatically on receipt of funds into the vendor’s account. The result would also be to speed up the registration process. With the ledger updating immediately, the registration gap would be eliminated. This, in turn, would also lead to greater efficiencies and cost savings for land registries.
Finally, the use of blockchain to record property transactions could also produce more effective property management as information could be reviewed in real time with less on-going management time required.
As in a lot of industry dealing with significant amount of data, some of the main challenges that Land Registrars face across both MEDC’s, and LEDC’s, are questions surrounding the complexity, security, integrity and cost effectiveness of using more conventional database/storage systems to house their inventories. As (with all its pros and cons) the digital revolution has gained momentum, there has been an increased appetite for Land Registry organisations to seek out alternative technologies. Intent on increasing the levels of security and integrity, at a more cost effective and simplistic level.
Blockchain technology is now starting to be seen as a viable solution to some of the issues that the world of land registry face. Blockchain technology offers a simple and cost effective digital foundation to support the storage, management and governance of property and land rights across the globe.
A popular (albeit extreme) example being used by a handful of ‘Blockhain in Land Registry’ advocates are using is in places where traditional methods of paper records are being kept for property and land rights. These paper records are at risk of being completely lost or destroyed in the worst cases of natural disasters. Which, as can be imagined, would cause all sorts of issues over claiming land rights. The digitisation of land registry utilising blockchain would completely remove this external risk, giving land deeds and rights an increased level of integrity.
For more developed nations (whom perhaps already use a digital system for their land registry), the issues of integrity and cost lie in the way deeds and property ownerships are exchanged. This process, with the involvement of multiple lawyers, can be costly, laborious and very arduous. In this case, Blockchain technology can remove these issues by providing a layer of visibility across all parties of deed transaction. Furthermore, if utilised correctly, the passing of deeds across a digitised Blockchain platform allows for both a faster, more secure transaction. Both these characteristics of blockchain can bring forward a very workable, faster, more cost effective solution for land registrars.
Real World Examples of Governments Moving Land Titles to a Blockchain
USA – Cook County Recorder
Last year, 2017, the office of the Cook County recorder of deeds participated in a pilot project that explored the barriers to adopting blockchain and the potential gains from overcoming those barriers.
“Our main takeaway is that it could reform the entire way that government develops and procures technology,” says John Mirkovic, deputy recorder for information technology and communications. “For real estate, it has the opportunity to remove people from the transaction who don’t add value outside the system. They provide value within a broken system. If you fix the system, they become unnecessary.”
The end result of the pilot was a success. The participants designed a blockchain real estate conveyance software workflow that can be a framework for the first legal blockchain conveyance in Illinois (and possibly the US.)
UK – HM Land Registry – Digital Street
Digital Street is a ground-breaking research and development project that is exploring how technology can revolutionise land registration and conveyancing in the future. Digital Street is an ongoing research project which explores and visualises different ideas.
A digital register has already created for a small selection of properties, which is a first step towards having a register that is fully machine-readable and able to be updated instantly. Digital Street provides an opportunity for us to work closely with property technology (PropTech), financial technology (FinTech) and law technology (LawTech) start-ups and innovative businesses, such as challenger banks, to explore how a digital register might enable new business models to make conveyancing simpler, faster and cheaper.
Sweden – blockchain-powered land registry
Sweden is the the country that’s furthest along in putting land registries on a blockchain, and it’s entering the next phase of its experiment. Sweden’s land registry authority is called the Lantmäteriet. Since June 2016, the body has been testing a way to record property transactions on a blockchain. This could save the Swedish taxpayer over €100 million ($106 million) a year by eliminating paperwork, reducing fraud, and speeding up transactions, according to an estimate by the consultancy Kairos Future, which is also involved in the project.
Ukraine – turns to blockchain to boost land ownership transparency
Ukraine will use blockchain technology to manage its registry of farmland, saying its current system is vulnerable to fraud that leads to conflicts over ownership.
Land reform is one of the requirements of the International Monetary Fund, Ukraine’s biggest creditor. The government says establishing a comprehensive, transparent and secure registry is necessary to proceed on one element of the overhaul, lifting a ban on the sale of farmland.
Republic of Georgia – The First Government To Secure Land Titles On The Bitcoin Blockchain
In April 2016, the government and bitcoin hardware and software firm Bitfury Group launched a project to register land titles via a private blockchain, which is a tamper-proof ledger, and then to make those transactions verifiable using bitcoin’s blockchain, which is public.
It is the first time a national government has used the bitcoin blockchain to secure and validate official actions, signifying a vote of confidence for the technology.
Tea Tsulukiani, Georgia’s Minister of Justice, said in a statement, “We will be able to work with Blockchain technology from this summer [to] place real estate extracts in a totally safe and innovative system.”
Ghana – African startups bet on blockchain to tackle land fraud
African startups succeeds in using blockchain, the technology behind bitcoin, to create foolproof digital land registries.
In Ghana, more than 80 percent of landowners lack title 60 years after independence, according to its land commission. Most land is held customarily with oral agreements between subsistence farmers and land-owning chiefs.
Ghanaian startup Bitland is using the distributed digital ledger to boost the integrity of land records.
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