Block-chain is a technological innovation of Bitcoin. Further, it is a public ledger of all Bitcoin transactions that have ever been executed. The technology works by adding blocks containing a new set of recordings in a linear, chronological order. A client that validates and relays transactions gets a copy of the block-chain automatically downloaded upon joining the Bitcoin network. In the Republic of Georgia’s National Agency of Public Registry, Bitcoin mining company BitFury together with a renowned economist Hernando DeSoto have partnered to plan and pilot a block-chain land titling project. The project will bring forth a transparent and secure ledger for managing land titles.
According to the Institute for Liberty and Democracy, there lies an estimated $20 trillion in the value of “dead capital” emanating from lack of legal title to the property in many parts of the world. Valery Vavilov, chief executive of BitFury, affirmed that launching of the project will enable Georgian citizens to register their property on the block-chain. Further, he continued to point out on the main advantages of the block-chain as the addition of security to data. Preventing data from being corrupted. Secondly, the public auditor will be able to make real-time audits at a frequency of as little as 10 minutes. Thirdly, the technology will reduce the friction and cost of property rights registration from the current price of between $50 and $200 down to a range of $.05 to $.10 because people would be able to do this from the comfort of their smartphones shortly.
The Chairman of the National Agency of Public Registry of Georgia, Papuna Ugrekhelidze pointed out that taking advantage of the security provided by the block-chain technology would reflect Georgia as a transparent and corruption-free country, paving a way for prosperity. De Soto, well known for his contribution on the prospect of unofficial ownership of land and other property says that when one’s property is not legally recorded, it hinders one from getting credit, and it also cannot fulfill the function of creating capital and credit. This creates problems in business and investments. George Kikvadze, the vice-chairman of BitFury’s board, explained how the pilot project will break the process of registering property in Georgia to a less involving process as compared to the current situation.
According to Vivalov, the company will be able to offer a software platform consisting of different structures for applications in voting and data analytics such as compliance and law enforcement on top of the mining or transaction processing infrastructure that the company provides. In addition, it will create new applications for the Bitcoin block-chain as a service for digitalizing assets such as tickets and coupons. He adds that BitFury is a one-stop shop for businesses, government as well as willing individuals to connect to the block-chain. Many block-chain supporters have long imagined applying the technology to opaque, bureaucratic process such as property rights registration in an aim of making them more transparent, fast and secure. However, an almost similar project previously announced by Factom that intended to manage land titles in Honduras on the block-chain temporarily stalled.
Following an article published in May 2015, the pilot project ought to have been completed by December but didn’t since it was political in nature and government systems moved slower, Factom CEO Peter Kirby wrote in a blog post. As much as the Honduran government never stated any intentions as weather to pursue the project or not, Kirby affirmed that the project was back, and it was just distracted because it was the government. In spite the allegations that the problem of land titling is greater in Honduras than in Georgia, BitFury believes that Georgia’s more well-functioning system and reforms will make a perfect place for them to showcase the virtues of registering land titles on a block-chain. Moreover, Georgia, as termed to be progressive and innovative has made a name for fighting corruption in the last few years. It ranked at 123 on the Transparence International’s Corruption Perception in 2003 but now ranks at 48. It also ranks third in the world for ease of registering a property for a small or medium-sized business while Honduras ranks at 88.
The company as well anticipates creating a private block-chain custom-made for property rights registration that is secured to the public Bitcoin block-chain. This will ensure that land titles will be managed on a closed system, and no individual will have the capacity to identify any transaction as well as making any deceitful changes to the private block-chain noticeable to the world. The project has already attracted other government’s interest, and representatives of the interested governments will be attending the signing in Georgia to learn more about BitFury’s solutions. If the project proves successful, it will eventually apply to countries with less functional land tilting systems.