Real estate is one of the largest asset classes on the planet, but it is ridden with issues that span from ownership diligence during title searches (e.g., a history of liens) to errors in public records. These issues lead to a misrepresentation of a property’s true value.
With the number of personal housing units worldwide reaching over 1 billion, and the commercial real estate market topping $30 trillion (Statista), there is a tremendous upside in using blockchain technology to eliminate some of the inefficiencies within real estate. It’s not a surprise that several governments and international organizations like the United Nations are building blockchain protocols to help with property titles.
Some of the use cases for blockchain and property titles include:
- International Organizations
- Land Disputes
- Streamline Property Transaction Processing
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Government officials in Ukraine have deployed the use of blockchain for digitizing leases in state land auctions. Roughly 18% of the land in Ukraine is owned by the state government. However, in Ukraine, there is a lower level of registration for public land than there is for private land. In this use case, blockchain is expected to help with more transparent land registry reporting (ICT Monitor Worldwide) in the country.
The Republic of Georgia also launched a Bitcoin-based land registry system. Given Bitcoin’s verifiable, tamper-proof transactions, the protocol has a natural synergy with an infrastructure that is ridden with human error. After the initial launch of the blockchain land registry project, the Georgian National Public Registry further expanded the scope of the agreement to use Bitcoin to validate notaries, demolitions, and new title registration.
Sweden has also tested ways to use blockchain for recording property transactions.
The United Nations was one of the first organizations to develop a land registry project using blockchain. By deploying Ethereum smart contracts in the Indian state of Haryana, developers created a blockchain to record a single source of land ownership and property history so new property buyers could be assured that important details like plot dimensions are correct.
Furthermore, the project aimed at reducing the costs and time involved in real estate transactions. Each transaction stored on the blockchain helped users achieve real-time traceability and unparalleled transparency.
The other United Nations land registry project deals with land disputes. The United Nations blockchain land registry initiative is called goLandReigstry. The platform helps to ensure a more transparent, secure online land registry and management process. It also helps with the verification of registry-related data that aids in South Asian urban planning. The goLandReigstry platform enables surveying, ownership authentication, and processing. One major aim of the project is to reduce disputes that arise as a result of a lack of ownership authentication.
The country of Siberia is also testing the use of blockchain for property ownership.
Streamlining Property Transaction Processing
As another use for blockchain land registry, in the state of Ohio, a group of 13 county auditors tested blockchain as a way of reducing the cost of real estate transactions as well as making property transactions more secure. The county was already using electronic real estate records before the blockchain program began which was anticipated to make it easier for integration. The blockchain protocol is expected to save the state resources that are spent on tracking down outdated documentation.
Real estate is one of the largest asset classes in the world, but it is ridden with processing challenges that cost time and money. Many of these issues deal with minimizing human error such as improving the data trail on the order of custody and tracking changes like the presence of a property lien.
The benefits of using blockchain technology can help alleviate some of the pain points within real estate. The strong potential of blockchain to be used in real estate is illustrated through the number of different organizations and governments using blockchain in some capacity to aid in property title management.
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