Blockchain, the secure, “trustless” database, has until recently been best known as the technology underpinning cryptocurrency bitcoin. Now, though, officials are realizing that it can be much, much more.
The platform, created by shadowy bitcoin inventor Satoshi Nakamoto in 2008, has recently become coveted by nations eager to sure up their land registries, a notoriously inefficient and corruption-prone government function.
Land registries in developing nations have long been a source of conflict and corruption, with little legal recourse for those whose land is illegally distributed by officials, corporations or individuals. This year a project called Bitland was piloted in the west African state of Ghana.
Bitland CSO Chris Bates said that, “Since the blockchain entries will be immutable, it will not be possible for any official or individual to change records in favor of any party. This is working to help stamp out rampant corruption so that Ghana will be open to foreign investors that can feel secure about the oversight of the system that will ensure their return.”
Honduras, too, has earmarked the technology. Last year Factom CEO Peter Kirby, who worked with the government there, said that the Honduras title records room had no door. “Anyone could go in, pull down a book, open the spine, and replace a title record with a new title record,” he said, adding that corrupt officials had done just this to award themselves prime, beachfront property.
Peruvian economist Hernando De Soto, president of the Institute for Liberty and Democracy, has been one of blockchain’s biggest champions for land registry reform. De Soto has reiterated his belief that the underlying cause of developing world poverty is poor property rights. He estimates the value of this land “dead capital” to be $20 trillion, adding that only two billion of the world’s 7.3bn people have a “legal and effective and public” title.
This April De Soto was in the Republic of Georgia, a former Soviet state in the Caucasus, to witness the announcement of its own blockchain-secured land registry. “By building a blockchain-based property registry and taking full advantage of the security provided by the Blockchain technology, the Republic of Georgia can show the world that we are a modern, transparent and corruption-free country that can lead the world in changing the way land titling is done and pave the way to additional prosperity for all,” said Papuna Ugrekhelidze, chairman of the National Agency of Public Registry of Georgia, in a statement.
Buoyed by Georgia’s move, governments in western Europe are now looking to blockchain to solve their own land registry problems. Last month Sweden’s land registry announced that it is conducting tests to migrate its land registry to blockchain – the first western European country to do so.
A “first phase” tested blockchain with some Swedish banks, Kairos Future’s Magnus Kempe told Reuters. Now the project is in its second stage: testing in a “full-stage environment”. Kempe added that the system could go live as early as this fall.
Last year Peru’s center-leaning party Peru Posible told voters it would use blockchain to combat corruption. Even U.S. presidential candidate Hillary Clinton has even earmarked blockchains to make government “smarter and more effective.”
This March Britain’s government signaled an intention to sell off its land registry, causing a major outcry. “An open source structure for the Land Registry could have long-term benefits for both community and economy,” wrote Vas Panagiotopolous of CityMetric. “It certainly beats privatisation and short-term profit.”
For ConsultingWhere’s Philip Knight, the question of whether blockchain will be fully accepted at state and individual levels will rest on its reputation on ‘dark’ web sites such as the Silk Road: “Will a technology that is currently synonymous with drug dealers provide the same level as assurance and trust as such respected and esteemed institutions as the Land Registry, the Law Society and the Royal Institution of Chartered Surveyors, who, for a healthy, but reasonable fee, currently administer the system of land transactions in the U.K.?
“If the answer is “no” then the cost to the UK economy of instituting a Blockchain land registry would be considerably greater than any efficiency savings such a system could offer,” he added.
Read More: http://www.redherring.com/startups/georgia-pilots-sweden-ponders-blockchain-future-europes-land-registries/