Blockchain has created a new framework for trading real estates without the need for third parties. On the basis of sharing the benefits of applying Blockchain in Land Registry, the article suggests a blockchain-based architecture to support future Land Registry-related applications.
Current real estate transactions often depend on a number of intermediaries including brokers, government asset databases, escrow companies, lawyers, inspectors, appraisers, and notary public. This job takes a lot of time and payment costs such as rent, deposit, and fees. In addition, it will take a long time since the purchase contract is signed until the sale invoice is signed and the actual asset transfer.
Using blockchain in Land Registry primarily aims to take advantage of its inherent potential to help transfer assets more safely and quickly.
Bitcoin was first introduced by Satoshi Nakamoto in 2009. In his article, Nakamoto introduced the first algorithm that allowed both buyers and sellers to perform financial transactions without a third party. That technique is called Blockchain.
Blockchain is decentralized, error-tolerant and virtually unchanged. At the same time, with high-security features and resilience on traditional storage and recording systems, Blockchain logs will be more flexible because no single central repository is vulnerable to destruction.
Benefits of applying Blockchain in Land Registry
The contract of real estate transactions will be scanned and then creates a corresponding digital fingerprint. Fingerprints created from documents are unique. The Hashes code will be saved to the Blockchain. By storing these Hases on a Blockchain, they can be independently verified for records of the existence of documents. In other words, the document was almost notarized and saved.
At the same time, instead of spending a lot of time and money on communication asset trading methods, users can use Blockchain and Smart Contracts. In particular, the payment of rent, deposit, and fee are automated. Escrow account can be redesigned with Smart Contracts and Multisigwallet. Blockchain-based registrations allow transferring assets between the two parties, reducing transaction time from month or week to a few minutes. Transaction costs can be reduced from thousands of dollars per sale for a trivial service fee.
Architecture based on Blockchain applications in Land Registry
Identity: Identifying the identity of the property owner is a primary necessity.
Digitized and Hash encrypted documents: All related documents are digitized and Hash encrypted. Besides, users will be guaranteed to receive a copy in the same document format.
MultisigWallet: When using the electronic wallet Multisig users will be required to verify with a minimum number of keys, instead of a single key until the end of the transaction. At the same time, besides transferring assets from the seller, the configuration of Multigig registration will require the seller and the bank’s representative to sign the transaction contract. Because Multisig is designed to be flexible, it can be configured in many ways as well as user requirements, for example, two of the two signers, two of the three signatories, or three of the five signers designated.
Escrow: a deposit, a deed or other instrument by a party delivered to another party after completing a specific condition or event.
Source: Potato Tech MagRelated posts: