Real Property and the Blockchain

Lisa M. Bitter, Esq.

Last summer the Asset Protection Group asked What happens to cryptocurrency when we die? This summer we asked whether title to real property can be transferred on the blockchain, the technology that underpins cryptocurrencies.

Who transfers title on the blockchain?

Surprisingly, many do. In fact, there are several countries, a state, and at least one county in the US actively working to put real property records on the blockchain. Specifically Georgia, Sweden, Honduras and Ukraine are digitizing land records and exploring how to transfer title to real property on the blockchain. Georgia and Ukraine are working with BitFury while Sweden, Honduras and Cook County in Illinois are working with startups Chromaway, Factom and Velox respectively. The state of Delaware is working with Symboint to digitize state records and to store those records on Symbiont's Assembly blockchain. Ubitquity is another startup player in the space.

An article published in The Economist this month titled "If blockchains ran the world Disrupting the trust business" detailed a lucid argument for how blockchain technology may disrupt so-called "trust businesses" like title agencies, banks, mortgage brokers and other intermediaries involved real estate transactions. While the blockchain may not run the world anytime soon, it appears certain it will impact the way we transfer title to real property sooner rather than later.

What is the blockchain?

Blockchain, or distributed ledger technology as some call it, consists of a distributed digital ledger to track public transactions chronologically. Software marks each data block with a unique hash and a time-stamp and connects that data block to the last block in the chain. No centralized or secret ledger exists as the entire public chain resides on multiple computers all over the world. For a more detailed explanation see our earlier article, What happens to cryptocurrency when we die?

Why transfer title on the blockchain?

For the same reason Netflix offers movies and television shows over the internet, Amazon bought Whole Foods and Google allows you to fact check this article in minutes.

Transferring title to real property over the blockchain will, eventually, prove faster, more secure and far more cost effective than doing so via current the current system. While not a viable option today it may well be the technology used to transfer title when you buy or sell your next home and will, in all likelihood, control the transfer of title to your real property when you die. In light of that reality rest assured that BYH is paying close attention to these issues and we will remain on the cutting edge for you and all our clients. If you have any questions please contact Lisa Bitter at BYH.