This ensures that the passage of title between the seller (grantor) and buyer (grantee) is transparently executed. At the point of transfer, the seller would rehash (encrypt) the digital file to prove possession. Hashes identify every transaction and the process does not require any manual intervention due to being pre-empted, self-authenticated, drafted using smart contractual stipulations and policed by the very nature of the cryptography. This unique digital property data package (analogous to a cloud-hosted wallet that replaces a paper deed / title) is fully secured and encrypted. Previous Anti-Money Laundering (AML) / Know Your Customer (KYC) checks.Restrictive covenants, negative easements, third-party consents etc.Mortgages, charges against the property and other relevant financial information.Name of the current owner and future buyer (individuals in the transaction will be able to prove their identity without risks of forgery or impersonation). The blockchain title can be created in the form of a “coloured coin”, a non-fungible token that represents the underlying asset and contains mutually inclusive information such as the: Using Blockchain “Coloured Coins” in the Conveyancing Process In the property industry specifically, the blockchain functions as an immutable ledger where all deeds, mortgage information, property / land records and associated data are expedited much quicker and, upon the transaction’s conclusion, held perpetually. This sequential process is undertaken without the need for third party or authoritative permissions. Once this process is complete, the data “blocks” are permanently placed onto the “chain” and the transaction is complete.Īn unforgeable, time-stamped digital signature is produced and the integrity of the transaction is guaranteed. Each transaction within the network is characterised by a unique digital ID “block” after all information related to transferring the title, deed and associated contract(s) are validated. Once a transaction is agreed, it is sent to a public ledger (or network) that operates on a peer-to-peer, open-sourced basis via multiple servers / computers known as nodes. Referred to as “triple entry bookkeeping”, smart contracts written in software code effectively form part of a Decentralised Autonomous Organisation (DAO). The implementation of blockchain architecture means that the chronological stages of the conveyancing and property registration processes can occur within milliseconds. How Can Blockchain Be Used in the UK Property Industry? Property title fraud alone costs the Land Registry approximately £10 million in indemnifying homeowners on an annual basis. From identity checks, fittings / contents / property information forms and deed history examinations through to surveys, mortgage confirmations / discharges, seller enquiries and contract drafting, few would deny that the entire process is a bureaucratic haze. Today, conveyancing is heavily fragmented, inefficient and involves archaic verification processes to assure legitimacy. Proponents also argue that costs are significantly reduced. Arguably, therefore, smart contracts provide superior security levels relative to traditional contract law execution. No one party controls the contract, yet all parties can trust it. Using mathematically complex algorithms, all aspects of a contract can be made partly or fully self-executing when specific conditions are met. What is a Smart Contract?Ī digital protocol that can verify, facilitate and enforce the performance of a contract regardless of its complexity. This data, once stored, cannot be modified or deleted. The data on the blockchain is transparently validated by consensus (there are no intermediaries). These records exist via a distributed ledger system that creates an open-source, decentralised mechanism for exchanging all types of information and transfers of value. What is a Blockchain?Ī blockchain essentially consists of records (“blocks”) that are inextricably linked and secured (into the “chain”) using cryptography. Although the enthusiasm surrounding blockchain technology has waned, the infrastructure behind bitcoin’s notable rise (and fall) in recent years still presents a compelling case to securely authenticate the exchange of valuable assets.
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