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BUSINESS SOLUTIONS

Best Principles and Practices for Using

Blockchain for Real Estate Title

Ragnar Lifthrasir
Founder, International Blockchain Real Estate Association
& CEO of velox.RE

eal estate is mired in fragmented technology and data, entrepreneurs are using blockchain as a solution without
and burdened with third parties. There is no industry knowing the problem. The real estate industry faces multiple
R whose transactional architecture maps to blockchain’s pain points caused by fragmentation and centralization. Those
architecture more than real estate. Blockchain (and Bitcoin are the two underlying problems blockchain should seek to solve
specifically) facilitates the payment, transfer, management, and for title.
recording of assets on a trust–minimized, peer to peer, secure, Technology is fragmented across different protocols and
open source network. companies. People are fragmented across different roles and
organizations. Technology is centralized in
“When we can secure the most important functionality of a proprietary and non-interoperable software
financial network by computer science rather than by the traditional applications. Data is centralized by third
accountants, regulators, investigators, police, and lawyers, we go parties.For property title, fragmentation and
from a system that is manual, local, and of inconsistent security to centralization result in three pain points: fraud,
one that is automated, global, and much more secure.” insecure or inaccessible property data, and the
—Nick Szabo, Money, blockchains, and social scalability expense and friction of third parties.
Feb. 9, 2017
2. When applying blockchain, don’t repeat
Using blockchain for real estate title is an exciting focus the problems you’re trying to solve
for many companies, entrepreneurs, investors, and even Although this might seem obvious, the choice of blockchain and
governments. Because I see mistakes being made in these specific implementation of it can easily result in fragmentation
efforts, I will share my best principles and practices for blockchain and centralization. For example, using a private blockchain
title applications. (These views are strictly my own, and do not repeats the problem of centralization.
necessarily reflect those of the International Blockchain Real
Estate Association.) 3. Know your jurisdiction’s title system
How blockchain is implemented depends on the land title
1. Know the problems you’re trying to solve system in each legal jurisdiction. There are two systems:
Without prior experience in real estate, many blockchain Deed Registration is the system in the United States. It is easier

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