Digitalization and the development of new information technology (IT) is one of the strongest forces of change in society. The technology called ”blockchains” is one of the most talked about technologies in recent years, both within the IT community, but also within the financial services industry. The technology involves creating digital vouchers or verification records for digital files, e.g. documents or transactions. These verification records can be considered as fingerprints for the digital files. These fingerprints are saved together in groups into a ”block”.
Land Registry under Blockchain technology
Blockchain technology makes it possible to release verification records for documents, registries, and more outside of firewalls without jeopardizing the security of the original documents. In practice, confidence in the original transactions and documents improves when several actors have access to the blockchain’s verification records. When the verification records are open and demonstrably difficult to manipulate, there is no reason for questioning them, and trust and confidence in them grow significantly, making the epithet “the trust machine” a valid one.
Challenges faced in land registry
Land records are stored in a centralized database with no additional benefits other than being a paper registry. It is virtually impossible to collateralize property rights because the paper registry system is unenforceable in court. Because of unenforceability, banks will not accept land as collateral. This situation leaves millions without the possibility of leveraging their property to get loans and rely on the rule of law for protection – continuing the ongoing cycle of poverty for much of the population.
A top-of-stack land registry and verification platform for financial institutions is the solution. A platform captures transactions and verifies the data. Blockchain technology providers works with financial institutions to update current registries, enable smart transactions and distribute private keys for clients – to allow an automated and trusted property transactions between all parties.
The potential that blockchain offers
- Reduced implementation cost: we only need a thin layer on top of Bitcoin, there is no need to implement a cryptocurrency from scratch.
- Security: By piggybacking on top of Bitcoin, we inherit its security properties. It is crucial for such a system to be tamperproof, and Bitcoin is currently the cryptocurrency which is secured by the largest hashrate.
- Persistence: Significant total value of all bitcoins in existence create a huge financial incentive to keep the system alive and healthy.
- Integration with Bitcoin as a payment system: An ability to swap bitcoins and colored coins in one atomic transaction makes it possible to do trustless trades. E.g. if a car and a payment for a car are sent through one transaction, any problem with a transaction (e.g. a dounlespend) will invalidate the trade. Thus it is impossible that a buyer will end up with a car when he haven’t has not paid, just as it is impossible that seller will receive a money without transferring ownership of the car. Bitcoin is currently the largest cryptocurrency, which make integration with it interesting and useful.
The Anglo African team can assist you in unlocking the full potential of FinTech for the prosper of your business. If you have any queries, or if you would like further information, please contact us on 2331636 or by e-mail at email@example.com.