Blockchain Estate Registry

Worldwide, there are innumerable issues that hinder efficiency and transparency in traditional land registries.  The cumbersome procedures required by them often lead to delays, high costs, and an overwhelming reliance on lawyers and registry officials. Waiting in queues, grappling with extensive documentation, and enduring complex approvals are the norm. Moreover, the concentration of power in the hands of a select few individuals within these registries raises concerns of corruption and manipulation, particularly in regions marred by conflicts or where high-value properties are at stake. Instances of forgeries, bribes, record destruction, and unauthorized modifications further exacerbate the lack of trust and accountability in these systems. It is of utmost importance to address these issues , especially in countries where corruption is rampant and the need for reform is critical.

The advent of blockchain technology offers a promising solution to revolutionize traditional land registries and overcome the long-standing issues that plague them. By leveraging the decentralized, transparent, and immutable nature of blockchain, governments and land registry offices can streamline procedures, significantly reduce costs, and enhance overall efficiency. The elimination of intermediaries through smart contracts allows for automated, secure, and tamper-proof property transactions, minimizing the need for extensive manual processes and reducing the risk of human error. Blockchain's decentralized approach also mitigates the concentration of power by providing an auditable and incorruptible ledger accessible to all stakeholders. In this way, with a transparent and accountable registry system, instances of forgery, bribery, and record tampering can be substantially reduced, restoring faith in the land registry process.

Over the years there have been many attempts to build a blockchain-based property registry that governments could use to reliably address many of these issues, but they have always fallen short. They lack vision and fail to address the concerns that would allow governments in many countries to revolutionize their land registry with a solution that provides security, flexibility, transparency, efficiency, and reliability, while still allowing those governments to maintain control of the records so they can resolve conflicts and issues caused by lost or stolen private keys.

In this article, we introduce the Blockchain Estate Registry, an open-source solution for property registries that solves these issues and more. By implementing blockchain technology, countries can address corruption head-on and embark on a transformative journey toward a more trustworthy and efficient land registry system.

The Blockchain Estate Registry

The Blockchain Estate Registry is an open-source set of smart contracts and a web-based user interface that allows you to manage ownership records of land and other types of property on the blockchain. They are designed to run on Ethereum compatible blockchain platforms.

It differs from other solutions because it focuses on two important capabilities that previous ones have neglected: flexibility for owners and investors, as well as the governments need to be able to enforce legislative rules and execute judicial decisions.

This solution provides a way to tokenize land titles, exchange them without intermediaries, administer them and resolve disputes in a decentralized manner.It also allows the possibility of exchanging them on NFT marketplaces and crypto exchanges if desired. Resolving disputes is achieved by implementing a “hard” form of a concept called “jurisdictions”, in which the registry can intervene in and even reverse transactions. This intervention is enabled by logic in the title tokens but can only be executed using a proposal and voting mechanism, which require a consensus from many people. This approach ensures all interventions are public, recorded, and resistant to fraud and corruption.

An important aspect of the Blockchain Estate Registry is that it is completely free and has been released under the MIT open-source license, so anyone can see how it works and use some or all of it for their own solutions without limitation. We believe that the only really effective way to revolutionize how public institutions manage public land records is through a completely transparent mechanism that is resistant to manipulation. We also believe that an approach like that taken by the Blockchain Estate Registry ultimately benefits everyone.

We have prepared a demo video explaining how this solution works in practice; you can check it out here.

Enhancing Transparency and Fighting Corruption

The Blockchain Estate Registry implements a blockchain-powered property registry using mechanisms that enhance transparency and fight corruption in the following ways.

• By providing an immutable and transparent ledger for recording property transactions.
• By eliminating the possibility of lone actors committing fraud. 
• Only the rightful owners of a property can transfer ownership.
• All records and transfers of ownership are recorded, tamper-proof, and visible to all parties. 
• All transfers are atomic and are only possible with the full agreement of both parties. 
• Leveraging decentralized consensus mechanisms, any changes that the government deems necessary can only be made with the approval of multiple people in the registry office.

By embracing blockchain technology, governments can establish trust, accountability, and integrity in their land registry systems, effectively combating corruption and restoring confidence in property transactions.

Streamlining Property Transactions

The BER streamlines property transactions by leveraging blockchain technology to assign every owner a token or set of tokens that represent their ownership of a property. It also allows them to automate and simplify the process of transferring ownership of those tokens from sellers to buyers in exchange for an agreed amount of cryptocurrency.

Through the use of smart contracts, the application eliminates the need for manual paperwork and intermediaries, reducing the time, cost, and potential for errors. Property transactions can be executed directly on the blockchain, securely recording and verifying the transfer of ownership. 

By streamlining the property transaction process, efficiency is significantly enhanced, reducing administrative burden and enabling faster and more seamless transactions for property owners and buyers.

By enabling optional support for non-fungible tokens (NFTs), owners and investors can connect and do business online in existing NFT marketplaces, allowing them, without the need for lawyers or banks, to change ownership in minutes instead of months.

Enabling Flexible Ownership and Financing Options

This BER enables flexible ownership and financing options by leveraging blockchain technology to facilitate innovative property ownership structures and financing models. 

Through fractional ownership, property owners can divide their assets into smaller shares, allowing for more affordable entry points and increased flexibility in ownership arrangements.

Additionally, blockchain-based tokens representing these shares can be easily traded, enabling liquidity and accessibility in the real estate market. 

Moreover, the transparent and traceable nature of blockchain transactions enhances trust for lenders, making it easier for property owners to secure financing and access loans against their property assets. 

By empowering individuals with more diverse ownership options and simplified financing mechanisms, the BER revolutionizes traditional property ownership and broadens opportunities for a wider range of investors and participants in the real estate market.

Of course, all of this can be done on a reliable foundation of validation that includes considerations for “Know Your Customer” (KYC) and Anti-Money Laundering (AML) regulations in your jurisdiction.

Attracting Investments and Stimulating the Economy

Our approach attracts investments and stimulates the economy by creating a transparent and secure environment for extremely fast property transactions, thereby increasing liquidity in a traditionally illiquid industry and boosting investor confidence.

The utilization of blockchain technology ensures that property records are verifiable, tamper-proof, and accessible to potential investors. This increased transparency reduces the risks associated with fraud, forgery, and corruption, making the real estate market more attractive for both domestic and, where permitted, international investors.

By improving the overall efficiency and trustworthiness of the land registry system, the BER plays a pivotal role in revitalizing the economy, creating job opportunities, and fostering a thriving real estate market.

Maintaining Government Control and Arbitration

The Blockchain Estate Registry implements a digital “jurisdiction”, which contains several important components that allow the government to fulfill its role as arbitrator and protector of property rights. They can manage the registry, reverse or veto transactions, and resolve issues with lost or stolen private keys. The components are as follows:

• A dedicated and evolving cabinet of land registry representatives:  
  
  This group of people is charged with running the land registry. They can propose changes, resolve conflicts, recover tokens that are inaccessible due to lost or stolen keys, invite and expel cabinet members, modify protocols, and update the jurisdiction as regulations change.  
  
   
• A set of upgradable and hardcoded governance protocols:  
  
  All changes to the BER happen via a strictly controlled process that involves some cabinet members proposing changes to the registry and waiting for a sufficient number of other cabinet members to vote on those proposals. No one member of the cabinet can make unilateral changes to the jurisdiction.  
  
   
• A dynamic set of title tokens that represent ownership and can be extended to implement regulations that dictate when and to whom property can be sold:  
  
  These tokens implement the ERC-721 protocol, also known as non-fungible tokens (NFT). This allows owners to very easily trade them on popular marketplaces with people and organizations. We have plans to also add support for converting these tokens into ERC-20 tokens that would enable multiple parties to collaboratively own and manage properties.

Future Directions

We have plans to develop this solution even more in the future through pilot projects or with the help of investment from partners interested in exploring the possibilities offered by this approach.

Here is a list of some features we would like to add in the short term and which we believe will add more value to the Blockchain Estate Registry: 

• The ability for owners to convert the “non-fungible” title tokens into “fungible” fractions, with support for an Ethereum standard called ERC-20, which allows owners to fractionalize their properties and trade them on cryptocurrency exchanges.
• The ability for owners to convert the “non-fungible” title tokens into the “non-fungible” fractional tokens representing a specific subset of the property (strata).
• Extend the verification logic around the transfer of ownership to allow the jurisdiction or jurisdiction-approved 3rd parties to analyze transfer details and signatures and potentially veto them. For example, add a verification contract that restricts transfers to members of a white-list that is managed by the jurisdiction. Such verification will happen even for tokens that are traded on public marketplaces.
• The ability to specify voting rules separately for different proposals – currently, all proposals use the same rules.
• Provide the possibility to update contracts using the proposal and voting mechanism
• Support the ability to enable or disable NFT support at the individual title token level, so that this support is an opt-in feature that owners can turn on if they desire it and if the jurisdiction permits it.
• Add support for cabinet members to delegate the cost of transactions to the jurisdiction. Currently, the members pay for their transactions, like creating proposals, voting on them, and executing them.

In the longer term, we can also look at adding features such as these:

• Consider representing owners using a dedicated Identity token issued by the jurisdiction only after suitable KYC and other formalities have been completed. This will incorporate concepts of self-sovereign identity (SSI) or even an existing or new digital identity (DID) provider. 
• Add support for dividends, loans, mortgages, etc.
• Extend the tokens to allow the addition of arbitrary data by the jurisdiction and jurisdiction-approved third parties.
• Extend the transfer mechanism to include optional signatures from external stakeholders that approve the transfer, which may be required by verification logic. This is a much-preferred way of adding verification mechanisms, resulting in transactions that cost a lot less.
• Add support for multiple blockchains and cross-blockchain transactions.

Conclusion

Finishing up, this implementation of a blockchain-powered property registry represents a groundbreaking solution that addresses the longstanding challenges government land and property registries face. By harnessing blockchain technology's transparency, immutability, and decentralized nature and combining this with some clever approaches to the governance of smart contracts, countries can revolutionize their land registry systems while maintaining control and accountability. This innovative approach enhances transparency, fights corruption, streamlines property transactions, enables flexible ownership and financing options, attracts investments, and stimulates economic growth.

Now that you read about the Blockchain Estate Registry, check out our demo video: https://youtu.be/K4ZMvDRO5Mw and let us know if you’d like to try it out yourself.