In a 2019 report from the FBI, over $200 million was lost due to real estate fraud. The forging and stealing of deeds is a crushing reality for some homeowners. However, Cassaday, a wealth management firm, suggests that with the crime being so uncommon, it’s not worth paying for insurance to protect yourself. If we could make deed registration easier and more secure though, why wouldn’t we? Blockchain deed registration offers a way to make that possible.
The Blockchain.
The Blockchain is essentially a virtual database. Once a “block” is filled with data, it cannot be changed without the owner’s permission. As new data is recorded, it enters a new block in the chain and is time stamped. This creates a permanent, secure chain of chronological data entries accessible with a private key.
How Would the Blockchain Work for Home Deed Registration?
The private key can be generated by the lender using cryptographic technology. That key can then be split up between the buyer, the bank, or even multiple banks. In order to recreate the private key for 100% ownership, you need the majority of the keys. Once the loan is paid off, the bank can then choose to burn their keys granting the buyer complete ownership of the house.
Since all parties would have access to the blockchain, they could see if a change had been made by a hacker. Furthermore, if the homeowners need to prove ownership, they can use their key as proof.
With more security, privacy, and easier access to records, blockchain works perfectly for home deed registration. To take it further though, it’s even been backed by research.
Blockchain in Action.
In 2018, South Burlington, Vermont put blockchain in action. A study was done to see the effectiveness of using the Blockchain for public recordkeeping and for recording land records. This study concluded that blockchain could be an effective tool for deed registration. Furthermore, the city partnered with Propy to develop a blockchain-based deed registration system.
If the advances made by South Burlington are successful, blockchain deed registration could expand other entities including the state government.
