Among the potential uses for blockchain technology, real estate titles — kind of land-legal ones that many people only think of when plodding through paperwork to buy a home — may not seem high on the list.
Land titles don’t relate to digital goods or cryptocurrencies, but those records do have features that can lend themselves to digital ledger storage: they are generated through the interactions of people and businesses who often have no previous relationship, they require long-term storage and trust, and they are often limited to paper files.
And because of the non-trivial amounts at stake in most land transactions, participants must pay third parties to verify the data.
“We still have this thing called property insurance where someone has to actually go to the local council, find a paper title on a file, and then, you know, pay a lawyer,” said Ather Williams III, a senior EVP. for digital innovation at Wells Fargo, in a panel on blockchain capabilities at the Collision tech conference in Toronto in June. “I think these are the kinds of places where blockchain can be really, really effective in driving efficiency.”
A nationwide jurisdiction in the southwest corner of Virginia is now trying to do something like this. Wise County’s Smart Land Records Project aims to store land titles on a private blockchain-like system, immutably recording every change.
“You can’t delete these smart records,” said David FitzGerald, founder and CEO of Bloqable, the Arlington-based company working with Wise County on this project. “They are there for posterity.”
The project stores these real estate titles in Amazon Web Services’ Quantum Ledger Database (AWS), a hosting arrangement that FitzGerald said lacks the decentralization of a true blockchain, but satisfied its clients’ desire to maintain greater control over its records. than a publicly distributed blockchain would allow.
“This is a blockchain-style ledger that we think is as secure as we can get — and super economical because it’s on AWS,” he said of the plan. More than 1,200 titles have been written in this ledger system to date.
Security is important because title fraud occurs. By successfully creating and insuring a fake title, a fraudster can sell property they don’t own at a 100% profit margin.
The immutability of blockchain records, in which every change is recorded collectively by the nodes in that blockchain, makes this type of theft easier to spot, FitzGerald said. What if an error goes undetected before a title is written to this immutable ledger? The system allows Wise County to write a new record on top of the old one, which will appear first, but will not delete or delete the old record.
The other part of this project involves automating the process of generating the “abstracts” that summarize a property’s ownership and (in Virginia) transactions over the past 40 years. The project aims to develop machine learning systems to prepare at least some of these summaries, a task that today, FitzGerald said, requires about three hours of work by trained professionals.
Title practitioners could be wrong, but the elected official overseeing this project predicted that real estate buyers would win if it made property insurance cheaper or unnecessary.
“The ox that may be impaled are insurance companies,” said Jack Kennedy, clerk of the Wise County and City of Norton Circuit Court. He added that Wise County’s relative smallness — the 2020 census recorded 36,130 residents and 16,644 homes — made it a viable place for these research and development efforts. In a May interview, he estimated the county’s costs at about $200,000, some of which was paid for by a state-run technology trust fund for district officials.
A real estate agent in central Virginia raised no objection to the prospect of making title uncertainty obsolete.
“In theory, it makes a lot of sense to have one single way that we can tell without a doubt how a title was acquired, transferred, and sold,” said Jim Duncan, a partner at Nest Realty in Charlottesville. “I like the concept that the blockchain is that one source of title.”
Wendy Henry, lead for blockchain and digital assets at Deloitte Consulting, said in an email that other attempts to store land titles on blockchain systems had failed. Cook County, Illinois, for example, did not continue a pilot project from 2016, which she said reflected the difficulty of data migration.
Henry suggested that the best use cases for blockchain-stored land titles would be in countries outside the US with less reliable administration and more government corruption. “Having an unchanging track record that is trusted is a huge advantage,” she wrote.
Douglas Heintzman, chief catalyst at Blockchain Research Institute, a Toronto-based think tank, agreed.
“The greatest impact on property registers is currently in regions where there has been a lot of corruption in government offices, and as a result there is little confidence in the veracity of titles,” he said in an email.
But as noted in a 2019 report from the Organization for Economic Co-operation and Development that Heintzman pointed out in his email, blockchain efforts in the countries of Georgia, Ghana and Hondurus also had steeper hills to climb because of that lack of confidence in the government. The need for digital ledger verification may not be as high in southwestern Virginia, but the government is also asking less of its voters to move to what it hopes is a more resilient and cost-effective system.
Kennedy emphasized that efficient angle of government in an interview without Web3 evangelism.
“It’s a practical problem,” Kennedy said. “This has a practical everyday application that can only get better.”
This post This Virginia County Is Trying To Use Blockchain-Like Technology To La was original published at “https://www.fastcompany.com/90766062/this-virginia-county-is-trying-to-use-blockchain-like-tech-to-store-land-titles?partner=rss&utm_source=rss&utm_medium=feed&utm_campaign=rss+fastcompany&utm_content=rss”