This county in Virginia is trying to use blockchain-like technology to store the

Among the possible applications of blockchain technology, real estate titles – a bit of land legal jargon that many people may only think of when going through the paperwork to buy a house – might not seem high on the list.

Land titles do not involve digital assets or cryptocurrencies, but these records have features that can lend themselves to digital storage: they are generated by the interactions of people and businesses that often have no prior relationship , they require long-term storage and trust, and they often remain confined to paper records.

And because of the sizable sums involved in most land deals, participants must pay third parties to verify records.

“We still have a thing called title insurance, where someone has to actually go out, go to the local municipality, look for a paper title in a file, and then, you know, pay an attorney,” said Ather Williams III, a Senior EVP for Digital Innovation at Wells Fargo, in a panel on the possibilities of blockchain at the Collision tech conference in Toronto in June. “I think those are the types of places where blockchain can be really, really good at improving efficiency.”

A rural jurisdiction in the southwest corner of Virginia is now trying to do something like this. Wise County The Smart Land Records project aims to store land titles on a private blockchain-type systemwith every change logged immutably.

“You can’t delete these smart records,” said David FitzGerald, Founder and CEO of Blockable, the Arlington-based company working with Wise County on this project. “They are here for posterity.”

The project stores these real estate titles in Amazon Web Services (AWS)’ Quantum Ledger Databasea hosting arrangement that FitzGerald says lacks the decentralization of a true blockchain, but fulfills its customers’ desire to retain more control over its records than a publicly distributed blockchain would allow.

“It’s a blockchain-like ledger that we think is as secure as possible — and super cheap because it’s on AWS,” he said of the plan. So far, more than 1,200 titles have been written in this ledger system.

Security is important because title fraud happens. Succeeding in creating a false title and having it insured allows a fraudster to sell a property he does not own with a 100% profit margin.

The immutability of blockchain records, in which every change is recorded jointly by the nodes of that blockchain, makes this type of theft easier to spot, FitzGerald said. What happens if an error is not detected before a title is written to this immutable ledger? The system allows Wise County to write a new record above the old one, which appears first but does not overwrite or erase the old record.

The other part of this project consists of automating the process of generating “summaries” which summarize ownership of a property and (in Virginia) its past 40 years of transactions. The project aims to develop machine-learning systems to prepare at least some of those summaries, a task that today, FitzGerald said, requires about three hours of work by trained professionals.

Title practitioners may lose out, but the elected official overseeing this project predicted property buyers would be winners if it made title insurance cheaper or unnecessary.

“The beef that will potentially be gored is the title insurance companies,” said Jack Kennedy, clerk of the Circuit Court of County Wise and Town of Norton. He added that the relative smallness of Wise County—the 2020 census recorded 36,130 residents and 16,644 housing units – made it a possible location for this research and development effort. In a conversation in May, he estimated county costs at around $200,000, some of which is paid for by a state-run technology trust fund for county clerks.

A Central Virginia-based real estate agent has expressed no objection to the prospect of making title uncertainty obsolete.

“In theory, it makes a lot of sense to have a single way in which we are able to say beyond doubt how a security was acquired, transferred and sold,” said Jim Duncan, partner of Nest Realty in Charlottesville. “I like the concept of having the blockchain as the sole source of title.”

Wendy Henry, head of blockchain and digital assets at Deloitte Consulting, said in an email that other efforts to store land titles on blockchain systems had not succeeded. Cook County, Illinois, for example, did not proceed with the 2016 pilot project, which it said reflected the difficulty of data migration.

Henry suggested that the best use cases for land titles stored on the blockchain would be in countries outside of the United States with less reliable record keeping and more government corruption. “Having an immutable record that is trusted is a huge plus,” she wrote.

Douglas Heintzman, Chief Catalyst at Blockchain Research Institutea Toronto think tank, agrees.

“The biggest impact for land title registries is currently in geographies where there has been a lot of corruption in government offices, and as a result, there is little trust in the veracity of title,” he said in an email.

But as stated in a Organization for Economic Co-operation and Development 2019 Report As Heintzman pointed out in his email, blockchain efforts in the countries of Georgia, Ghana, and Honduras also had steeper slopes to climb due to this lack of trust in government. The need for digital ledger verification may not be so high in Southwest Virginia, but the government is also asking less of its constituents to transition to what it hopes will be a more resilient system. and more profitable.

Kennedy underscored this effective governance angle in an interview devoid of Web3 evangelism.

“It’s a practical problem,” Kennedy said. “It has practical everyday application that can only get better.”

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