Blockchain technology is best known as the technology that cryptocurrencies such as Bitcoin run on. However, for those not interested in investing online in cryptocurrencies, recent developments mean that in the near future your next investment properties might also be purchased over a blockchain platform. Many experts believe that one of blockchain technology’s most natural and effective applications will be in changing the way property deals are done.
The immutability of the technology’s digital ledger system is thought to hold particular promise when it comes to securing the right of property ownership in developing countries. In some regions the loss, damage to or tampering of property records due to war, natural disasters and corruption is considered to be a significant factor holding back economies.
However, the first major application in Blockchain technology in the property market looks like taking place in Sweden. The Lantmäteriet, the Scandinavian country’s near half-millenium old land mapping and registration authority is set to become one of the first government agencies in the world to test blockchain technology in property sales.
The agency is currently short-listing volunteers and expects to conduct the first blockchain-based property transaction within the next few months. The technology’s strengths are that it is practically immune to the possibility for fraudulent transactions and should also make the process of recording and transferring title deeds far more efficient. Transactions that currently take up to months to complete are expected to start going through in days or even hours on the blockchain platform.
Sweden is not the only country experimenting with blockchain solutions in land registries and title deed records. Trials are also underway in the USA, India and Republic of Georgia in the Caucasus. The latter has recent experience of suspected title deed fraud linked to Russian interests in the state. The country’s National Agency of Public Registry has been adding real estate titles transferred over the past year to a blockchain platform and 1 million titles have already been recorded.
The Agency’s next target is to introduce ‘smart contracts’ such as those facilitated by the Ethereum blockchain platform. These would allow property transactions to be fully digitalised meaning they could even be conducted from abroad. Georgia’s diaspora around the world are a major part of the local property market and the development would allow them to conclude deals for investment properties in their home country without having to travel there to sign the papers.