Data on Real Estate
Recording property rights is a time-consuming and inefficient process, as anyone who has visited their local Recorder’s Office can attest. To have a deed recorded in a county’s public database and index, it must be physically handed to a government official at the local recording office. Claims to the property must be settled in accordance with the public index if there is a dispute about ownership.
Tracking property ownership in this way is inefficient because of the time and money it takes, as well as the possibility of human error. Blockchain technology may one day make it unnecessary to scan papers and search for paper records at a county or city courthouse. If property titles are recorded and validated on a distributed ledger, owners will know that their deed is legitimate and secure.
Proving property ownership might be challenging if there is no Recorder’s Office if there is little to no government or banking infrastructure in the area. With the help of blockchain technology, residents of such a community might maintain traceable property ownership records that are open to public inspection at any time.
Intelligent Contracts
To facilitate the execution of a legally binding contract, “smart contracts” can be included in the blockchain. Users agree to a set of parameters before a smart contract may go into effect. When specified thresholds are crossed, the agreement’s provisions will be implemented mechanically.
Assume, for the sake of argument, that a prospective renter is interested in leasing an apartment via a smart contract. As soon as the security deposit is received, the landlord will provide the tenant with the apartment’s access code. After the rent is paid, the smart contract will immediately provide the tenant with the entry code. The code could be changed automatically if certain events occurred, such as rent being late.
Chains of Supply
Blockchain technology can be used by suppliers to keep track of where they source their raw ingredients, similar to IBM’s Food Trust. This would allow businesses to check the legitimacy of common labels like “Organic,” “Local,” and “Fair Trade.”
Forbes reports that the food industry is rapidly using blockchain technology to monitor the flow and integrity of food from farm to fork.5
Voting
Blockchain technology has the potential to underpin a brand-new voting system, as was just said. The blockchain voting system was put to the test in West Virginia during the midterm elections in November of 2018, with promising results.6
Using blockchain in this way would make fraudulent vote counting extremely difficult. The blockchain system would keep elections open and honest while cutting down on election day staff and giving officials near real-time tally results. This would remove the possibility of electoral fraud and the requirement for recounts.
Blockchain’s Pros and Cons
Blockchain, despite all its complexity, has almost limitless potential as a decentralized method of record-keeping. In addition to the aforementioned use cases, blockchain technology may find value in improving user privacy, increasing security, reducing processing costs, and eliminating errors. However, it’s not all upside.
Transactions are safe, private, and efficient; the technology is transparent; it offers a banking option and a way to secure personal information for citizens of countries with unstable or underdeveloped governments; and the decentralization of the system makes it harder to tamper with.
Cons
Some blockchains have high associated technological costs.
Historically used in illegal activities, such as on the dark web; Transaction throughput is low; Regulation varies by jurisdiction; Legal status is unclear. Restricted space for storing data
Pros of Using Blockchains
How Reliable is the Chain?
Thousands of computers and devices are involved in validating blockchain transactions. This eliminates most of the potential for human error and creates a more reliable record of events. A computational error on a single computer in the network would only affect that one copy of the blockchain and would not be acknowledged by the rest of the network.
Cutbacks in Expenses
Customers typically pay a bank or a notary public to verify a financial transaction or to witness a document signing. The use of a third party for verification is unnecessary and expensive in the blockchain era. When a business owner accepts credit card payments, for instance, a tiny fee is charged since the transactions need to be processed by banks and payment processing organizations. In contrast, Bitcoin has no governing body and low transaction fees.
Decentralization
Information in a blockchain system is not stored in a single location. Instead, many copies of the blockchain are dispersed throughout a distributed system of computers. Each node in the network will update its copy of the blockchain whenever a new block is added.
Instead of keeping all of the data in one place, blockchain disperses it among multiple nodes, making it harder to alter.
Transactions that Run Smoothly
It may take several days for a centralized authority to settle a transaction. It’s possible that if you try to deposit a check on a Friday night, the money won’t show up in your account until Monday morning. While banks are only open during business hours, typically Monday through Friday, a blockchain is operational around the clock, every day of the year.
On some blockchains, a transaction can be finalized in a matter of minutes and verified as secure shortly thereafter. Because of time zone differences and the need for all parties to confirm payment processing, international transactions typically take substantially longer, thus this is very helpful.
Sales Made With Confidence
Many blockchain networks function as open databases, making its transaction history accessible to anybody with access to the internet. Users can view transaction details, but they have no way of knowing who is conducting the transactions. It’s a popular misunderstanding that blockchain networks like Bitcoin guarantee complete anonymity; in reality, they’re only pseudonymous because each user has a unique, publicly available address that may be linked to their identity.
Safer Financial Dealings
After a transaction is recorded in a blockchain, the network must confirm its legitimacy. Once the transaction has been verified, it is added to the next block in the blockchain. The blockchain records a unique hash for each block, as well as the hash of the prior block. Once the network verifies the blocks, they can’t be changed.
Transparency
Most blockchains are completely free and open-source. This makes its source code publicly available. This paves the way for auditors to check the safety of cryptocurrencies like Bitcoin. But this also means that no central body can be said to have the final say over Bitcoin’s source code or how it is updated. As a result, anyone can offer suggestions for improving the system. Bitcoin can be updated if a sufficient number of users on the network believe the upgraded code is stable and beneficial.
Finance for the Unbanked
Perhaps the most significant feature of blockchain and cryptocurrencies is their accessibility to people of all backgrounds, regardless of their gender, race, nationality, or place of origin. An estimated 1.3 billion adults do not have access to bank accounts or other safe ways to keep their money, as reported by The World Bank.7 Almost all of these people also reside in emerging nations, where the cash-only economy is just getting started.
These workers are frequently compensated with hard currency. This means they have to find safe places to keep the actual money, which can be inviting to criminals. Cryptography makes theft more difficult, but not impossible.
Future blockchains are exploring ways to serve as a unit of account for storing not only money but also medical information, property rights, and other legal contracts.