Blockchain Technology: The safest way for better land governance?
Everyday technology platforms are adding value for better land governance worldwide. Since Honduras announced its experimentation building a land title registry using bitcoin technology and results of it to Dubai’s announcement of its intention to turn itself into the first blockchain-powered government in the world by 2020, governments are increasingly looking for robust and secure ways to ensure their data is unbreakable, reliable, sharable and available at any time. Georgia and Sweden are countries investing on this technology as well and the outcome will be seen sooner.
Most land agencies worldwide are also looking to lower implementation and operational costs while providing the highest level of data integrity, security and transparency, all of which goes directly to work solving the land administration problems.
But, what problems does each office want to tackle?
Worldwide, each land agency has its own ecosystem, its own problems; and a majority of them are related to high levels of corruption, manipulation from external forces (both political and private), inefficient operations (internal processes or procedures), obsolete infrastructure (hardware and software), unqualified technical staff or in some cases aging legislation that hinders proper agency modernization efforts.
Many land agencies have begun to look for low cost, secure, trust creating technology for land registries, and this has led them to Blockchain technology. The question is, whether Blockchain and/or other low cost solutions offer the correct formula to enable offices to simultaneously achieve efficiency, security, integrity and productivity?
Consideration of Blockchain as a foundation for land management would benefit from a review of three main primary technical considerations. Our paper will focus on the “trilogy” that we believe should be the basis of discussions within land agencies: Security, Integrity and Validation:
- Blockchain definition:
- A new way of keeping shared transactional records (database).
- A “distributed ledger” with frequent reconciliation, all users hold identical copy.
- A protocol: a set of rules.
- Designed to be “permanent” and “immutable”.
- Blockchain within Land:
- Enabled an “unhackeable” public record.
- Distributes storage across all offices.
- Allows a focus on accuracy and efficiency.
- Land records already kept in a chain.
- Path to paperless transactions and electronic recording in all jurisdictions.
- Security: In information technology (IT), the defense of digital information and IT assets against internal and external, malicious and accidental threats. This defense includes detection, prevention and response to threats through the use of security policies, software tools and IT services
- As an example, each time a certificate of title (or any land transition) is recorded; it is also stored inside blockchain. This will ensure that a hash is created and “key” data could be validated at any point in time.
- Integrity: Data integrity is the assurance that digital information is uncorrupted and can only be accessed or modified by those authorized to do so. Integrity involves maintaining the consistency, accuracy and trustworthiness of data over its entire lifecycle.
- Using the blockchain services, LIS will verify data integrity and manages any possible unauthorized change to ensure data integrity.
- Validation: is the process of ensuring that a LIS operates on clean, correct and useful data. It uses “validation rules” “validation constraints”, that check for correctness, meaningfulness, and security of data that are input to the system.
- Using Blockchain distributed network allows third party users (Notaries, cadaster, bank clerks, other) to make queries of information and entities which have the required permissions, and also validate and verify the data stored in Blockchain.
Finally, with respect to efficiency we understand it to be a measure of how well you achieve things. If you are able to get more outputs from the same inputs, you are said to have increased efficiency.
Given these concepts, how we can we define a framework in which those concepts work together?
In order to achieve efficiency, one must have proper processes containing all the regulations or legal mandates. Each land office has its own way of doing things, and the most accurate of those processes are defined the best, and as a result, will have better results. Efficiency is also related to people (staff) responsible for applying those processes for a common goal.
What are the challenges to Blockchain in land records? This looks simple, but the reality is not as easy as many have assumed. Some challenges are:
- Amount of data – blockchain is better at transmitting small amounts of data (see statistics).
- Difficult to explain and talk about given that it is something based on functionality, it’s “behind the scenes”.
- This technology is still in its early stage of development… With some good and bad experiences on implementation.
- Blockchain transaction speed (average per second Blockchain 7 / Visa 2000)
- No roll back processes.
- Cultural blockers.
Other aspects of how Blockchain will be implemented are:
- Private (like bitcoin) or public infrastructure.
- Permissioned vs. permission less and
- Ethereum vs. Bluechip.
With all these considerations, we will argue that blockchain is one way to secure land governance if:
- It is used to act as a security enabler for the data. Not all the data will be stored inside blockchain.
- There is no need to store all data inside blockchain, we store only “key” data to allow proper validation. There is no need to store all the data as one of the current challenges on blockchain is transaction speed.
- We consider there to be three blockchain layers:
- Layer 1(Validation): allows interaction with 3rd party users / solutions.
- Layer 2 (Security): At transaction lever, ensure each transaction is unique and the solution (Land Administration software) could use this service to verify data.
- Layer 3(Integrity): Lower security, from an auditing perspective. Blockchain is used to track/validate auditing procedures within any land solution.
Without question, the use of blockchain represents a fundamental shift in the way that technology is deployed to support improved land governance. It also represents a change in the way governments procure and utilize LIS technology.
“The blockchain is not going to ‘replace government’ concerning how land is registered and monitored. It will make governance of land registration the simplest and most corruption resistant possible.”
As property rights are secured and greater access to capital and credit becomes available, market conditions will allow greater investment in capital resources, which will could also boost agricultural productivity and result in higher income for the people who need it most.