Blockchain is beginning to be increasingly explored by different industries in the world that are seeking to explore its immutable and transparent features. We recently, through my previous articles saw how Blockchain technology can be incorporated into Data science and Cybersecurity and how it can enable faster business transactions while optimizing lots of processes.
Existing pain points
License and registry processes are paper-based and fragmented, making transactions costly, inefficient, and vulnerable to tampering — The current process involved in acquiring landed properties is really tasking and stressful as unwitting buyers after going through all the manual registration and purchase process sometimes ends up being duped or defrauded either by selling land that has been marked as government-owned, buying a land from the wrong person or someone who is not the owner or even buying lands that are currently facing disputes. This is not the only issue here, sometimes, a piece of land is sold to lots of people who end up giving up the struggle to contend for it or possibly the struggle to get their money back from the sellers/owners.
The process of acquiring a landed property without a trusted system providing an indisputable record of ownership, the process of exchanging, selling, insuring, or financing one’s property becomes increasingly difficult to do. Property is an extremely important asset and, with globalization, it will become even more valuable. But without proof of ownership, landowners cannot possibly utilize their property’s value to its full potential.
So, why hasn’t this problem been solved in those countries? There are many factors that go into land titling that make it difficult to implement in new regions of the world. First, there are issues with unclear ownership due to paper-based or even vocal contracts. Additionally, ownership is sometimes very unclear, inadvertently causing either double ownership or ownership of land by a community as a whole. As a result, no individual is able to have one clear formal title deed. Finally, bribes for services are prevalent where corrupt cartels may make files disappear in order to illegally acquire land.
To solve this issue, Firstly, we must start by creating a cadastral solution system that stores land title ownership into an immutable and transparent registry — Blockchain. This system requires all parties involved (Land sellers) to provide a detailed description of legal land ownership, starting with geospatial surveys recorded in a geographic information system (GIS). Ultimately, such an infrastructure would provide reliable land data that can be accessible by anyone interested in buying this land and of course immutable no matter the quantity of data put into the registry, including tenure and dimensions, to regions that have not historically had access to adequate records keeping processes.
Also, the use of blockchain in the land registry is primarily being explored for its potential to enable the “almost instant” transfer of property securely. With smart contracts enabling self-execution when certain conditions are met transactions could be completed faster. For example, a rule could be put in place to facilitate the title of a property being automatically transferred to the new owner when they deposit funds to the appropriate account.
There is also the potential for the registration gap to be removed. The use of smart contracts would speed up the process by automatically updating the ledger, instead of buyers having to transfer ownership through an application form.
This system described above is a perfect use case of blockchain technology. Blockchain has the ability to revolutionize land registries by creating a foolproof digital ledger where information can be stored and verified by a network of trusted users.
Deeds and titling not only provide critical protection for home buyers in developed nations — they serve as a basis for investment and economic growth across many developing nations. By securing a unique and non-corruptible record on a blockchain and validating changes to the status of that record across owners, a reliable property record can be created, whether for a piece of land that heretofore had no owner or as a link between stovepiped systems.
Blockchain value proposition: A decentralized, standardized system for land registration records could reduce the number of intermediaries required, increase trust in identity of transacting parties, increase process efficiencies, and decrease time and cost to process.