Will Blockchain Solve Problems with Land Titles?
Last August, the India Property Rights Alliance held a conference on Blockchain for Property Governance. One of speaker, Mr. Guillermo Pena, the CEO of Fundación Eléutera in Honduras, elaborated on how governments can use blockchain as a new tool to manage property titles and prevent fraud.
Blockchain is the technology behind the e-currency Bitcoin. Essentially, It is a digital ledger that accepts input from many different computers and only changes when there is consensus among all parties. There is no central database, or authority, that can be hacked or cheated making it both a public and an extremely secure system.
Mr. Pena explained how a blockchain system for land titles could transform the existing system in Honduras and India “you show up with a regular paper land title and sign for whatever it is. It gets scanned and put inside the system. Once in the system, it starts checking that the document scanned is sent to the notary with the digital signature that is the document he sent,” Mr. Pena explained. “There’s a time stamp for every point of human contact. When it’s on blockchain, it’s as clear as the rest of history.”
Through blockchain technology governments can find a cheaper method of keeping track of transactions and who owns what, not only combatting corruption, but also help bring about the prosperity attached to secured rights.
“There is a further financial component,” Mr. Pena explained, “If we can go to the bank with a title that’s been cleared by the system, they could give me a discount on my interest rates because I’m a less risky client.” This not only provides a cleaner process, but also gives people an incentive to adopt the system earlier on.
Mr. Pena remains optimistic that blockchain can be a leapfrogging opportunity for Honduras, and the fact that several governments including Dubai, Estonia, Georgia, Sweden have started experimenting with it provides additional encouragement. “I think the Alliance, when we complain about property rights, we also need to present solutions, fixing a judicial system and the rule of law in the country. This is usually a long process, so what we have with blockchain technology that, as long as it delivers, we’ve solved that problem without having to fix the whole legal system.”
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