My experience in the past couple of weeks dealing with a real-estate property led me to spend some time thinking about a perfect use-case of Block-chain. Just think about how it can be leveraged for the benefit of the consumer. First, let’s take a quick look at what Blockchain is all about:-
Blockchain has been talked about a lot, mainly due to the craze around Bitcoin, which uses blockchain technology.
Blockchain is an open distributed ledger that can record transactions between 2 parties in a secure, verifiable & permanent manner. Each transaction is recorded as a block with data & other record keeping information, into this ledger. If the same item is moved from the 2nd party to the 3rd, another block is added (appended) to the previous block, thus forming a chain of block – Blockchain. Once recorded, the block or the transaction cannot be altered.
A great example, that is easy to understand, is the one where IBM & Walmart are working on applying blockchain to the Food Industry. As the food is produced and moved through the supply chain to the final destination (in this case a Walmart store), a block is added to the distributed ledger, with information as it moves through different channels (e.g. ships, trucks, warehouses etc). It then becomes very easy for Walmart to get the entire history of the food item, from the farm where it was produced to the path it took to get to the store. This can be helpful in a number of ways – during product recall, quality audit, to increase efficiency, and more.
Few examples of common use cases of blockchain are around financial industry (when money is moved from 1 person to another) and real-estate (property transactions).
Last week, I had to get paperwork done for our family owned property. And that’s when I realized the trouble we were in. Although one department in the town had added our name on the properly, the other had not done so, causing a lot of confusion. We had to spend the entire day chasing the town department to do the needful. We realized that was not the end of our work. Each of the utilities, which are government owned, had it’s own procedure for transferring the utility to our name. So a typical home buyer, besides going through the property transaction office for getting the transfer done, has to go through 4-5 more departments for additional transfers (Electricity, Water, Property Tax, and Cooking Gas). And each of these, have their own forms to fill, their own ownership proofs to submit, identify proof submissions etc. The entire process takes multiple days, wasting the time of the property buyer.
That got me thinking. I had seen articles on how blockchain would help with real-estate transactions. One of the articles was -> http://deloitte.wsj.com/cfo/2018/01/03/blockchain-and-smart-contracts-could-transform-property-transactions/.
This I believe would be a great improvement over what we currently have. I remember when we bought a house in US, we had to pay money to some law firm to do a title search. This was to ensure that the title is clear and nobody will come later to claim it. I truly believe Blockchain will eliminate the need for this, and help everyone know the exact history / records of that property. A few governments are already working on potential implementations of this and I bet this will be a reality in the next 3-4 years.
What would make it more efficient, is to go beyond the basic chaining of real-estate transactions / property dealings. What you want is a Blockchain system that triggers changes in other systems. So once the property transaction is completed, the system should be built-in, in a way that the completion of the Blockchain link (addition of the property transaction into the chain & the public ledger) will trigger an update in the systems used for Electricity, Water, Property Tax (& others as required) , effectively the new owner will have instantaneous updates and additional work on the buyer, seller and the various departments is reduced.
Once all of the property & utility related records are updated, the new owner is now free to move into their newly purchased property. As the move happens, guess what, the new owner now needs to inform all the other public/private institutions about the new address. These are the banks where they have an account, Phone Company, and possibly the online shipping companies like Amazon etc. Wouldn’t it be great, if the system integrated additional capability, so it can rely on the secure transaction made using Blockchain, to further trigger updates in other records? This I believe would be a dream come true for the new buyer, who only has to worry about completing the Purchase transactions, doing the packing and moving to the new place. All the name & address changes are handled seamlessly by the system.
All in all, it will be an awesome home buying experience a few years from now with the advent of Blockchain.