How the blockchain could help Endnotes Property transactions could be handled on a blockchain 1. “Factom’s Blockchain Land Registry Tool trial stalls in a similar way to how payments between parties are due to the politics of Honduras”, Duncan Riley, Silicon handled using digital currencies like Bitcoin. However, Angle, December 2015. See also: http://siliconangle.com/ instead of assuming that each ‘coin’ is the same, it would blog/2015/12/27/factoms-blockchain-land-reigstry-tool- be possible to associate a unique house or piece of land trial-stalls-due-to-the-politics-of-honduras/ 2. “ Solving Real World Problems With the Bitcoin with a particular coin, or fraction of a coin, and exchange Blockchain”, NewsBTC, January 2015. See also: http:// it just like in any other transaction using digital currency. www.newsbtc.com/2015/01/23/solving-real-world- The entire transaction history of the property could then problems-bitcoin-blockchain/ 3. See: https://www.gov.uk/registering-land-or-property- be followed through the blockchain. This concept is known with-land-registry/when-you-must-register as ‘coloured coins’ because the coins are ‘coloured’ to 4. “ UK Property Transaction Statistics”, HM Revenue & Customs, December 2015. See also: https://www.gov.uk/ 9 represent a specific asset, such as a house. government/uploads/system/uploads/attachment_data/ file/486888/UK_Tables_Dec_2015__cir_.pdf In the blockchain, assets are held by the owners of private 5. Ibid. keys, the cryptographic ‘identity’ created when a user first 6. “ Property fraud line helps nearly 2000 people in its first two years”, Jessica Prasad, Land Registry, January 2015. registers for the blockchain. The title deeds and identity See also: http://blog.landregistry.gov.uk/property-fraud- documents proving ownership do not themselves need line-helps-nearly-2000-people-in-its-first-two-years/ to be stored on the blockchain. Instead, they can be 7. “ Protect yourself from property fraud during scams awareness month”, Jessica Prasad, Land Registry, July ‘hashed’ – a mathematical transformation that converts 2015. See also: http://blog.landregistry.gov.uk/protect- long documents of text and other characters to a much yourself-from-property-fraud-during-scams-awareness- shorter, fixed-length string of text and numbers. The hash is month/ 8. “‘ Title fraud costing Land Registry millions’ – claim”, unique to the original document and can be stored with the Estate Agent Today, August 2015. See also: https://www. coloured coin on the blockchain in much less space. estateagenttoday.co.uk/breaking-news/2015/8/title-fraud- costing-land-registry-millions--claim 9. “ Smart Property, Colored Coins and Mastercoin”, Tim Using smart contracts, asset exchange could also follow Swanson, CoinDesk, January 2014. See also: http://www. specific instructions encoded as part of the transaction to coindesk.com/smart-property-colored-coins-mastercoin/ be executed automatically once agreed criteria have been met. Implications Contact Alexander Shelkovnikov A blockchain-based approach to registering property titles Corporate Venturing and Blockchain Lead could increase the efficiency of transaction processing and +44 (0) 20 7303 8895 reduce, if not entirely prevent, property fraud. [email protected] A property registry could be delivered via a centrally administered public blockchain, which, although replicating large elements of the current registration process, would simultaneously provide enhanced security against fraud, increased resilience and improved transparency – since the historical transaction records could be read by the public. A blockchain could also help in resolving disputes over property ownership since each transaction would be verified and stored in the distributed ledger. For the registration authorities, a blockchain thus provides a way of combining many processes and systems into one, increasing efficiency through distributed processing and thus reducing cost. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is the United Kingdom member firm of DTTL. This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. 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