Bitcoin mining firm BitFury, the Republic of Georgia’s National Agency of Public Registry and prominent economist Hernando de Soto are slated to announce Friday a collaboration to develop and pilot a blockchain land titling project, according to a report by Forbes.
The partners will sign an MOU at the Georgian Technology Park, a two-million-square-foot privatized land plot in Georgia that the San Francisco-based BitFury took over to design a special technology zone in which one of its mega data centers is located.
The magazine noted that in many areas of the world, people do not have legal title to their assets such as homes and vehicles, representing an estimated $20 trillion in “dead capital,” according to de Soto, president of the Institute for Liberty and Democracy in Lima, Peru.
“We are launching the property rights registration project for Georgian citizens so that they can register property on the blockchain,” said BitFury CEO Valery Vavilov to Forbes.
The blockchain, he said, would add security to the property data to make it incorruptible and allow the public auditor to conduct real-time audits. It would also mitigate friction in registration and reduce costs of property rights registration, something people could do through their smartphones. “Blockchain will be used as a notary service,” he said.
Using blockchain, “the Republic of Georgia can show the world that we are a modern, transparent and corruption-free country that can lead the world in changing the way land titling is done and pave the way to additional prosperity for all,” said the Georgian public registry agency’s president, Papuna Urgekhelidze, in a statement quoted by Forbes.
Just more than a quarter of the world’s population have a legal title that is effective and public with respect to their control over an asset, said De Soto to the magazine. When owned property is “not adequately paperized or recorded, they cannot fill the functions of creating capital and credit,” he said, adding that it also creates problems for business.
Currently, buying or selling land in the Republic of Georgia is a one-day endeavor in which the buyer or seller needs to go to a public registry house and pay between $50 and $200, depending on how fast they wish to notarize the transaction. Forbes said the pilot project will bring elements of this process to the blockchain and cost between $.05 and $.10 to buyers and sellers.
“The outcome would be citizens of a specific region have a smartphone application and they’ll be able to move their assets,” said BitFury’s vice-chairman George Kikvadze, “and that movement will be corresponded to tokens moving on the blockchain and doing it with even less friction than what the country has now.”
Forbes reported that the MOU signals BitFury’s first initiative outside of hardware and mining. In addition to the mining or transaction processing infrastructure the firm offers, said Vavilov, it will provide a software platform composed of various frameworks for applications in voting; data analytics; blockchain as a service for digitizing assets; and an API with which developers can produce new applications for the bitcoin blockchain.
BitFury plans to develop a private blockchain designed for property rights registration that is connected to the public bitcoin blockchain. Land titles would be managed on a closed system so no single transaction would be identifiable and public, but the public would be confident that the record was not tampered with as the data on it would collectively be stamped onto the public bitcoin blockchain, making any fraudulent alterations to the private blockchain visible to the whole world.
Vavilov told Forbes that Georgia’s well-organized data and relatively corruption-free land titling operation will make it easier to organize and secure the data and administer the pilot project without concerns about political considerations hampering the process. World Bank figures show that Georgia ranks third worldwide for ease of registering a property for a small or medium-sized business.
The pilot has already sparked interest among other governments, the magazine said. Representatives of two Peruvian presidential candidates will be at the MOU signing Friday to learn more about BitFury’s solution.
The firm anticipates launching the project by the end of 2016. Should it prove successful, BitFury aims to build it out and eventually apply it in nationals with even less functional land titling systems.
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