Blockchain technology offers numerous uses in land administration, from time stamped transactions and time stamps, tamper-proof recording systems, and disaster recovery plans through multiparty transparent governance tools to title deed registration and providing compensation in areas affected by conflict.
Blockchain-enabled distributed databases create an unalterable public ledger of all transactions and enable timestamped accounting of such interactions between any parties that decide to utilize its recording methods as information recording solutions, making this technology highly disruptive. Without evidence of changes, governments, corporations, and individuals cannot be sure that the information recorded has not been altered.
Every node in a network maintains and verifies complete copies of each transaction to ensure decentralized storage for data. Users submit unique mathematical signatures using private computer keys to secure blockchain records and reduce fraud through user authentication. Multi-signature governance accounts enable more excellent protection, by allocating transaction approval among several key decision makers who manage records.
What Is Blockchain?
Cryptocurrencies - decentralized alternative digital currencies backed by cryptography making strides into mainstream banking systems after years as niche technologies. Expedia, Overstock, and Microsoft currently accept Bitcoin payments; more than 500 ATMs around the globe allow accessing it; this number increased by 60% just last year alone!
Though more people are showing an increasing interest in using cryptocurrency assets like Bitcoin, many still need to be convinced of its long-term marketability and potential uses beyond just supporting Bitcoin itself. Yet its core technology, blockchain, is creating much excitement among consumers - possibly more so than supporting cryptocurrency itself. Potential applications of blockchain technology range from managing electoral processes and better health records for patients through to enhanced company share management in financial sectors like insurance.
At first, the news that Texas-based company Factom would build a land registry system in Honduras using blockchain technology was met with tremendous enthusiasm, sparking widespread excitement over this revolutionary innovation in land administration. Unfortunately, though initially reported accurately or exaggerated, claims have since proven false.
In contrast, other organizations such as Bitland in Ghana, ProSoft Alliance in Ukraine, and Ubiquity in the US claim elements of blockchain in their offerings; by no means was Factom the only company trying to apply the technology into land administration services offerings - thus this paper explores what each organization is using blockchain tech currently as well as future plans in depth.
Keys, Tokens, And Transactions
Public key cryptography technology provides one of the critical capabilities of blockchain systems - transferring ownership of account units or digital tokens between users using general key encryption technology. A "wallet" serves to store keys. When shared publicly for use by any individual user, their public key generates an address, which is typically composed of letters and numbers, to sign their public key using private keys, once submitted for network transactions using this signature.
Digital tokens, the units of account being tracked on blockchain systems, can be precisely controlled depending on guidelines established by their creators. Supply can then be strictly managed using different blockchain systems for exact control over token supply. Once issued on an exchange market, they become fungible within that network, allowing exchange markets built by companies around the globe that charge fees when buying and selling various digital tokens using government currencies and between each other.
Decentralized Consensus
Recordkeeping has always been an integral aspect of life - whether for financial transactions, stock markets, voting records, or land ownership - placing great reliance upon those maintaining these documents for others. Many approaches and attempts have been used over the years to make documents and data transparent and open; initiatives from available data governance organizations continue to use such methods while keeping current records about central authorities.
Blockchain is famous for creating its decentralized consensus mechanism - an interaction among thousands of autonomous computer nodes adhering to set rules rather than being enforced from above. Blockchains can serve as "trust machines," with records being recorded and verified without depending on any particular person or institution for verification or storage purposes.
Colored Coins
Colored coins are a new layer added to the Bitcoin blockchain that allows for the "coloring" or marking (by an algorithm representing an attribute) of specific transaction outputs using digital tokens with these attributes. Keys, digital receipts, and signatures function similarly for these transactions, with wallet, API, and block explorer software tools designed to enhance foundational software architecture for colored coins blockchain layer functionality.
Read More: Mastering Blockchain Development: A Comprehensive Guide for Beginners
What Are The Land Administration Challenges?
Land administration can be defined as "the practice of ascertaining, recording and disseminating information regarding rights, values, and uses of land," first proposed by the United Nations Economic Commission for Europe. However, land administration systems implemented in emerging economies often prove unsuccessful over the long term despite significant investment by donor agencies and national land projects.
Property rights management systems such as cadastral and registry databases can be costly to establish or create, necessitating both expensive hardware and software along with budgeted for maintenance fees and the services of technical experts to keep running efficiently.
Modern land information systems provide an effective tool for tracking the rent-seeking behavior of poorly paid staff who must supplement their income by renting out rooms at rent-seeking services. At the same time, other fundamental issues needing attention include poor governance, access issues (especially rural poor lack access) to formal land agencies (especially without proper government support), and fear that an easily accessible system displays large landowners who often comprise the political or economic elite. Because these registry/cadastral systems often rely on proprietary or open-source software-based solutions, they often fail to demonstrate viability;
Given the challenges associated with land administration, it should come as no surprise that 70-80% of parcels worldwide still need to be officially unregistered with any national system. Although this figure represents only an estimate, most professionals working on property rights issues around the globe would generally accept it as being accurate; as more land professionals enter this field and, more parcels become urbanized and their numbers increase due to population growth, so too will this discrepancy between documented and undocumented boxes grow further apart.
How Can Blockchain Potentially Address Land Administration Challenges
Land registries serve as central databases that record past property rights transactions; blockchain technology could easily apply this concept of transparent, decentralized public ledger to land information management. Another advantage is eliminating the need for centralized databases that may become vulnerable due to hacking attacks, abuse by system administrators, or natural or artificial disasters that wipe out entire data centers.
Exploring its possible applications brings to light various applications for blockchain technology; among these are:
- The transaction time establishment resembles a virtual notary public
- Because the system is not dependent on a single data center, disaster recovery
- Preserving of information in an unchangeable, tamper-proof the atmosphere
- Making use of "colored coins" for registry management. Later in this paper, each of these possible uses will be covered in more detail.
Colored Coins Suitable For Land Management
Colored Coins/Smart Property
Colored Coins use blockchain to track and represent both tangible and intangible assets, from land ownership rights to token metadata used for land administration. By assigning one or more tokens as ownership tokens for plots of land ownership rights, this protocol feature facilitates land administration.
Tracking public registry information like size, GPS coordinates, and year of manufacture via token metadata makes for efficient land administration practices; using one or more tokens representing their ownership can aid land administrator purposes. Using lien or identity encryption software allows only people with access to private keys to view ownership details. In contrast, Block Explorer software allows anyone with internet connectivity to confirm who owns each token - or change who owns each pass through Block Explorer software to publicly verify and follow who owns each one using Block Explorer software!
Bright property refers to using colored coin tokens to represent land. This approach assists with land administration by offering a more straightforward method for registering and transferring properties while fighting fraud at sale time. Computers provide an economical certificate of ownership in countries where land registration can be complex by creating metadata related to token requests, which can be accessed online through its web address.
Land administration bodies find this resourceful when their systems become more muscular or when disputes arise between property owners. Private keys can also help ensure that only legitimate signers sign documents; Colored Coin tokens work to avoid sale fraud in this manner.
Property-representing tokens on the blockchain now conform to computer languages and applications covered by smart contracts, making their sale or transfer possible with conditions like approval by notaries, county clerks, land administrators, or property owners - fulfilling which helps reduce fraud while assuring timely payments, funds may only be released upon payment or presentation of required signatures.
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Conclusion
Although bitcoin remains highly unpredictable as an asset class, its underlying technology, the blockchain, holds great promise to transform transactions. Dubbed a "trust machine," its primary function as a timestamped public ledger makes confirmed blockchain transactions safer and transparent compared to what could otherwise occur with traditional financial services platforms like banks.
Due to this technology's many uses in land administration, multiple uses for blockchain exist in land administration. As detailed by this paper, they include multi party transactions, virtual notaries, title deed registration, bright property (colored coins) management, disaster preparation planning, and multiparty payments, among many more applications.
While emerging economies might benefit more from specific uses than developed ones, many advantages associated with using blockchain rely heavily on having accurate land information, such as title deeds and survey plans, which is generally lacking in emerging economies.
