Tech benefits: land registry and governance

9 August  2019

The traditional image of a surveyor’s activities seems far removed from cryptocurrency, coding, algorithms and network nodes. All the same, blockchain technology offers enormous benefits for land professionals, writes John Dean Markunas

Satoshi Nakamoto’s 2008 research paper ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ described the creation and potential uses of a new and revolutionary type of money, the 1st of many cryptocurrencies. Cryptocurrency, a form of internet-based money that has not been created by any corporate entity or government, enables online transfers from 1 person to another without the use of a 3rd-party intermediary, such as a bank.

The technology by which cryptocurrencies can be transferred or used to make payments is called blockchain, sophisticated and powerful software that has created the world’s 1st decentralised, peer-to-peer monetary system. A blockchain is a distributed and public digital ledger that documents transactions across many computers, so that the record cannot be altered retrospectively without altering all subsequent blocks, nor without the consensus of the network. Besides this, blockchain allows a variety of types of digital information or data – digital assets – to be shared or distributed.

The key characteristics of blockchain are:

• immutability: data records are permanent and cannot be changed or deleted;
• time-stamp: every entry in the blockchain is securely tracked with a time-stamp, while permanency makes backlogging impossible;
• accessibility: all participants may have access to see or add to the data on the chain, depending on permissions; and
• smart contracts: in an electronic agreement, program coding defines the conditions to which all parties have agreed; when these are met, certain actions are executed, such as payments being made from an escrow account, or made to vendors for work completed.

Put simply, blockchain comprises 3 core parts, which are:

1. information is posted to the chain, each transaction called a block and time-stamped;
2. a cryptographic hash value references or links corresponding transaction data, that is blocks of information placed on the chain; and
3. a peer-to-peer network collectively adheres to a protocol for inter-node communication and validating new blocks of information.

A blockchain maintains a growing list of transactions or uploaded digital data that are time-stamped, with the hash of the previous block connecting to the next to preserve the chain’s integrity.

Surveying and the blockchain

As surveying becomes increasingly global and surveyors work across borders in a fragmented way with 3rd parties, blockchain’s primary benefit is connecting technology and its data with the people who work in a profession where trust and accountability is essential.

Network participants that connect and share through the use of smart property records on the blockchain include those such as:

• buyers;
• banks;
• land registries;
• estate agents;
• sellers;
• conveyancers;
• surveyors;
• appraisers;
• notaries; and
• tax officials.

This enables the following.

• Final field notes and data can be uploaded to the chain sequentially for authentication, safe keeping and reference.
• Legally accepted descriptions and definitions of property can be recorded on the chain and made accessible to others by giving them permissions.
• Existing hard-copy documents can be digitised and uploaded.
• Previous surveys can be posted, and subsequent access given to others.
• Current satellite images and GIS data, including lot dimensions, parcel tax identification number, building and utility information, can be stored without danger of tampering.
• Digital building information models can be safely stored, exchanged or networked to support decision-making.

Table 1 shows the 3 main types of platform that emerged after Nakamoto introduced bitcoin and blockchain. There is no universal blockchain format, however, and hybrid blockchains, which are partially centralised and partially decentralised, have been developed from the 3 core types. A hybrid seeks to find the balance needed between auditability, security, scaleability and data storage for applications built on top of them. The ability to control access for viewing and regulate who is allowed to upload data without sacrificing autonomy and running the risk of exposing sensitive data to the public is a perfect example. Surveyors, civil engineers, architects, cartographers, construction managers and urban planners who adapt blockchain technology into their work processes will benefit most from a hybrid type.

Table 1: The 3 types of blockchain platform  and the way they operate 

Blockchain, land registry and cadastre

Land registration, cadastre and land governance play an important role in a society as long as they function legally and transparently and meet the goals set by society. Registries keep a record of documents that express legal rights from a property transaction, while cadastre is the process of mapping those rights and subsequent storage of related data. The cadastral agency will validate the correspondence between physical and legal boundaries. These 2 systems, critical to modern land governance, are not connected in many countries, but blockchain technology can link them.

Land governance or administration involves procedures, policies, processes and institutions by which land, property and other natural resources are managed. This includes decisions on access to land, as well as land rights, use and development. Modern land governance requires effective policies, processes and institutions that can determine, record and disseminate information about the tenure, value and use of land, and is guided by policy and enforcement. Sound policy is built on interpreting high-quality information, providing transparency, strengthening accountability and creating a clearer means of enforcing regulations.

The production, availability and accessibility of reliable data and statistics are fundamental to the evidence-based decision-making that is necessary for good land governance. The challenge is that, in many areas of the world, the development of sound policy is hampered by the lack of aggregation and access to high-quality data. Current legacy methods are by contrast fragmented, and don’t enable the easy creation or mining of data.

Blockchain is a starting point for the proactive integration of data into land policy and governance. Policy-makers and stakeholders using this technology will therefore be able to leverage data by aggregating and analysing it to improve land governance policy and enforcement.

There are challenges to overcome before the wholesale adoption of blockchain in real estate, such as the following.

• Transaction speeds: with growing use of blockchain and escalation of data uploads, transaction speeds must increase without compromising data security.
• Identity: the development of legal, widely accepted digital identities is a necessary first step if individuals are to participate in blockchain-based transactions.
• Interoperability: blockchains, software and related technologies do not connect or communicate. Interoperability needs to be built in to systems to avoid operational silos and increase system efficiencies.
• Education: the lack of global education and outreach to government institutions impedes understanding of blockchain and its potential adoption.
• Establishment of official registries and cadastre: in developing countries especially, an acceptable, official cadastre and land registry needs to be established, whether it’s paper, digital or blockchain.

In conclusion, blockchain technology and land surveying may seem unlikely partners. However, the technology creates a cooperative environment in which all information, data and images from a surveying project can be gathered in a reliable, confident and immutable way.

With surveying tools and instruments becoming increasingly hi-tech and widespread, openness to collaboration and new ideas will increase. This momentum could be leveraged to bring blockchain technology to the forefront.

The adoption of this technology represents a giant leap for surveying practices, professionals and other participants in the discipline. But first, they will all need to be trained in the concepts, capabilities and vocabulary. Assuming the sector can adapt, blockchain will provide significant value for the surveyors of the future, transforming and legitimising cadastres, land governance and land registries around the world.

John Dean Markunas is a real-estate blockchain adviser and business development consultant

Further information

• Related competencies include: Big data, Cadastre and land management, Legal/regulatory compliance
• This feature is taken from the RICS Land Journal (July/August 2019)
• Related categories: Introduction to proptech