Imagine buying property, then going out for the day and coming back to find someone else has moved in and there’s absolutely nothing you can do about it.
Having the right and opportunity to own land and property is a privilege mainly taken for granted by those who have it. However, the World Bank estimates that 70 per cent of the global population lacks access to land or property titling, meaning they could ‘buy’ land or property, only to lose it to someone else, with no way to prove their claim.
This situation restricts opportunity, mobility and individual liberty – people have to literally stay on their land the whole time to defend their ownership – and it makes economic growth, inbound investment and real-estate development impossible. Having a legal description of an asset and a watertight record of its ownership is a huge undertaking which is beyond the means of many governments in the third world.
But now government land registries are beginning to test Blockchain technology as a way of recording property transactions – a move which could herald an unprecedented disruption of the asset ownership industry.
Blockchain – the technology which underpins Bitcoin – creates a digital registry that can’t be tampered with, permanently enshrining agreements. Putting transactions on a blockchain makes them almost impossible to forge.
The Swedish government’s land registry, working with consultancy Kairos Future, is trailblazing by trialling Blockchain to record property transactions, saying the system will eliminate paperwork, speed up the registration process and reduce fraud.
Last month, an apartment in Kiev became the world’s first property to be sold using a blockchain when Michael Arrington, the Scottish founder of TechCrunch, used a US-based real-estate start-up called Propy to make the purchase using cryptocurrency.
These are early skirmishes with the technology, but as Blockchain comes on stream as an enabler of transactions and is adopted by governments, we’ll see an acceleration of growth in countries that have been out of reach to investors because there’s been no way to operate in them.
This will power the development of more wealthy economies, which will in turn create new markets, meaning investors will not only be able to make investments safely, but also that there will be a demand for the businesses that they build.