Everyone always brings up land registry use cases when asked about potential real-world use cases of blockchain or NFTs. Someday, all land registries that track titles for houses will be stored on some hypothetical public distributed digital ledger. This almost kind of makes sense until you think about it for more than 30 seconds and realize it’s complete bullshit.
The premise is simple, buying a house today involves a great deal of paperwork whose sole purpose is to transfer some entry in a government database from one individual or entity to another. This data is all a matter of public record, and changes or transfers of the deed for the house are routine matters of simply a shared “ledger” of data. This is a system we’ve built and used for millennia now, and the premise is that we could take our already digital land registries and then somehow put them “on the blockchain,” and this would be an improvement somehow through hand-waving means.
The most significant problem with this is the custodial problem. If we accept the premise that a digital land deed “on the blockchain” would be self-custodied by the user by a digital wallet or cryptographic key, then what guarantees the connection between the legal owner of the house and the key? Do I suddenly own your house if I have the cryptographic keys to your home? Common sense and common law would say no. If someone else custodies the keys for your house on your behalf, then we have a trusted third party and a public government ledger, which we already have today, so there’s no benefit of adding a level of technical convolution on top.
On top of this, the existential question remains about what to do in the presence of conflicts. Property disputes happen all the time, whether in the process of bankruptcy proceedings, inheritance, foreclosure, or any manner of externalities that require the courts to make decisions about property ownership and transfers. These events require a central party (acting on behalf of the state and the rule of law) to update the register without the owners’ consent forcefully. Now, if a public “blockchain” based system allowed such updates by a privileged central party, that system is functionally identical to a centrally managed system. The blockchain system then serves no purpose except technical convolution for no reason.