Will The Blockchain Render This Multibillion-Dollar Industry Obsolete?
Content adapted from this Zerohedge.com article : Source
Blockchain technology is on the cusp of disrupting another billion-dollar industry that most Americans (particularly members of the millennial generation) rarely think about: Boring old title insurance.
Since the blockchain technology craze swept the US in 2015, technologists working to pinpoint new use-cases for the technology have been squawking about its potential to revolutionize how governments store and track ownership of land. The system used by most modern governments was developed centuries ago: In the US, property titles are public documents recorded with roughly 3,600 counties, towns and other jurisdictions. In some cases, the record is available only in writing and can be viewed only by visiting a town clerk's office. Since the system in its present form leaves plenty of room for error, many homeowners purchase title insurance to protect against the possibility that their claim to the property is challenged – either because the records were lost of destroyed, or for any other reason.
Several countries, including Ukraine, the Republic of Georgia, Honduras and Sweden have already partnered with Bitfury and other blockchain startups to develop a blockchain-based title-registry system. As WSJ reports, some of these systems are nearly ready to be implemented.
For anybody familiar with how blockchain technology works, the utility here is obvious: Since the blockchain provides an immutable record of transactions, storing property titles on a blockchain-based system would substantially decrease the risk that a landowners' claim is challenged. WSJ posits that title insurance could be among the industries that's most ripe for blockchain disruption. It's just one example of a multibillion-dollar industry that could be rendered obsolete overnight.
To help get ahead of the problem, WSJ says many title insurers are investing resources into studying and developing blockchain technology, which could allow these companies to pivot by developing and managing the systems that otherwise would've put them out of business.
As a precaution, many title-insurance companies are studying the use of blockchain to ensure they are "in the drivers' seat versus being in the passenger's seat" if these changes take place, said Steven Gottheim, senior counsel of the American Land Title Association, a trade group. "The lesson you can see in the industries that have been disrupted" is that the greatest danger is to companies that "don't realize new technology is coming," he said.
Mr. Gottheim said initial tests of the use of blockchain technology for title recording by IBM and startups like R3 CEV look promising. But he pointed out that enormous hurdles face the use of blockchain technology and businesses are in the "really early stages of trying to figure out if this is hype or reality."
Several US states are also studying the technology, hoping to develop land-title registries of their own. Unsurprisingly, sparsely populated states with vast tracts of uninhabited land are leading the charge. According to WSJ, the state that's furthest along is Vermont. The state has already passed legislation legalizing the use of blockchain technology to store land titles for when the technology is finally ready.
Several state governments in the U.S. also are paving the way for the use of the new technology. Earlier this year, Arizona Gov. Doug Ducey signed legislation that enables local municipalities to substitute blockchain technology for the conventional method of recording property ownership and sales. "It establishes blockchain as a usable format for smart contracts," said Patrick Ptak, a spokesman for the governor.
Last year, Vermont enacted a law that said that transactions recorded with blockchain technology "have the presumption of admissibility from an evidentiary perspective," said Mr. Pieciak. It would allow people to "authenticate a blockchain real-estate transaction whether it's over a title dispute or divorce proceeding," he said.
Mr. Pieciak said the legislation is part of an effort by Vermont to encourage financial technology companies to base themselves in the state or to boost their businesses through the use of blockchain technology in a wide range of industries. "We're looking at ways Vermont could do anything to make our regulatory environment more hospitable," he said.
Mr. Pierciak said a number of questions remain, such as how mortgages would be incorporated and how title insurance world work. But technically local municipalities in Vermont now have the legal framework to switch to recording deeds using blockchain technology, although none has made that move so far.
As we've previously pointed out, realtors in some parts of the US are warming to the idea of settling home sales in bitcoin. Several of these transactions have already conducted, including one homeowner in Texas who purchased their home with bitcoin. These transactions are also happening outside the US: A San Francisco-based startup named Propy in September said ethereum had been used to buy an apartment in Ukraine.
Someday, real-estate transactions might be conducted in bitcoin, and stored in a blockchain-based ledger.
"I think it's going to happen much faster than everyone anticipated," said Alex Voloshyn, Propy's chief technology officer.
Bitcoin is processing many transactions per second that could also take other technologies on top that support high-volume payments. so it means Bitcoin could both process many transactions per second as well as be a store of value like gold.@zer0hedge
MERCCII
Just the way internet has changed the world, Blockchain technology is revolutionizing a lot of things and the sooner we all understand and accept this, the better.
Digital money is only the beginning.
The world will change whether by Blockchain or maybe hashgraph, either way I agree it's changed forever
This post has received gratitude of 13.93 % from @appreciator thanks to: @zer0hedge.
It will demolish many a careers... but also generate many more.
Good post,
@Missbitcoin
The future has already come. Blokchain technology brings a revolution in the speed of information transfer, storage of information and security. This will allow a much faster growth of the economy, also blockchain technology will be used in other industries, medicine, hospitals, files and population censuses. Selling Bitcoin houses in the UK is just one small sign of the future. I expect that blockchain technology will be applied in all aspects of business, stock exchanges, etc.
Now the time has come for the changes, I just hope that it will not rich oligarchs to abuse as they always do. Let's just remember electricity and Nikola Tesla, we could have free electricity, but his works were abused to make a profit. Also, electric cars have existed for 100 years, and we are still driving on oil. Thank you for useful information @zer0hedge
To spin this idea a bit why do not government use blockchain to do government documentation from citizenship, social security, and taxes?
Government revenue on the Blockchain is the best idea. Government probably not that keen ; )
Great article @zer0hedge.
Absolutely, the title industry is going to get blasted out of the water. All third party verification industries are obsolete. The blockchain is more reliable and less expensive. Too many entities have leveraged the trust factor for their own gain while not totally being trustworthy themselves. This is about to change.
It is a technological world and most disruptions will be from technology. VR is going to totally alter the real estate market...3D printing the construction....and blockchain title insurance.
Your all post is helpful really I appreciate your all post @zer0hedge