UPDATED 13:17 EST / JANUARY 23 2018

EMERGING TECH

Vermont city launches pilot blockchain to track real estate transfers

A new blockchain registry for real estate will arrive soon for the City of South Burlington, Vermont, from Palo Alto, California-based startup Propy Inc.

Propy announced Monday that the registry, powered by distributed-ledger blockchain technology, would be part of a pilot program to digitize and secure city land records in collaboration with the City Clerk’s Office of South Burlington.

A blockchain is a shared ledger that is distributed among numerous nodes where each node embeds new data using cryptographic proofs to secure each addition. In this manner, blockchains can be used to reduce fraud and make transactions easier to track.

The Vermont state government began to show interest in blockchain technology in 2015 when then-Governor Peter Shumlin signed into law an act forming a committee to study the technology and its potential benefit to the state. The next year, Vermont passed legislation that formally recognized blockchain-notarized documents and, in 2017, Governor Phil Scott signed a law promoting economic development through broader blockchain applications in legal and business applications.

“The City of South Burlington is always interested in taking advantage of technology that enhances its delivery of services to residents,” said Donna Kinville, city clerk of South Burlington. “We are ready to learn from this Propy pilot.”

The pilot program will provide a real-world platform for the city and allow the state to better understand the impact of using a blockchain to manage a government service. Participants in the blockchain will use it to track real estate registrations and exchanges between parties and it will be considered binding legal documentation. Because of the nature of blockchains, the process from the first registration of a piece of real estate until its current disposition can be traced back through the blockchain history.

Furthermore, thanks to the distributed nature and cryptographic security of a blockchain, it would be extremely difficult to modify or forge older documents secured by the blockchain. Depending on how the blockchain is implemented, it would even make retrieving and considering an entire chain of transactions involving a plot of real estate faster and cheaper for the state and regulatory organizations.

“The Propy pilot will showcase the savings of blockchain distributed technology — furthering Vermont’s and the City of South Burlington’s goal to achieve more cost-effective government,” said Natalia Karayaneva, chief executive of Propy.

Thanks to its utility as a database of record that can be used to secure and track transactions, blockchain technology has been sought for years as a possible land registry system. Factom Inc.’s now-defunct project with the government of Honduras in 2015 was one of the first attempts to apply blockchain technology to land registry. Other examples include the state of Andhra Pradesh in India and the partnership between the government of Ukraine and Bitfury Group Ltd. Delaware-based blockchain startup Ubiquity LLC also recorded its first property ownership transfer in 2016.

Those examples represent only a small number of attempted applications using blockchain technology for governance, and only its use for property and real estate. The same underlying systems have been experimented with for government recordkeeping, notary, healthcare and numerous other applications.

San Francisco-based market research and forecasting company Grand View Research predicted that the blockchain market would reach $7.74 billion by 2024. Of that market, a significant portion is expected to be in the form of public and government contracts.

Image: Pixabay

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