Decentralized autonomous registry of rights on lands and real estate on Ethereum

How to use Ethereum blockchain for land and estate accounting and transacting without engaging third parties

Decentralized revolution on its way to the real world

In October 2008, Satoshi Nakamoto’s white paper “Bitcoin: A Peer-to-Peer Electronic Cash System” was published. It enabled people to have their payment system that doesn’t have a single point of failure.

Bitcoin became the world’s first decentralized system managed according to the economic benefits of its participants. Anyone can start mining, enable the network operation and get a reward. Bitcoin is a genius invention and reliable system — technologically, economically and socially at the same time. However, it successfully addressed only the “double spending” problem since, i.e., the impossibility to spend one Bitcoin more than once.

Later, Ethereum was introduced as the first decentralized virtual machine to emerge. While Bitcoin allowed for only managing the number of coins with one’s private key, Ethereum enabled writing any data and making computations with them though with some volume limitations.

Currently, in development, or in mainnet, there is a lot of new-generation blockchain systems, like Cosmos, Polkadot, Tezos, Solana, Dfinity, Aeternity, Algorand, and many others. They solve the problems of scalability and interoperability of different blockchains. They’re platforms for dApps — decentralized applications. Unfortunately, the number of users of such systems is still quite low, but it’s rising gradually.

Eventually, the moment will come when everyone will be able to get their payments in ETH or DAI, buy groceries and clothing, and pay for services with them and without any intermediaries. Blockchain is perfect for accounting and transferring both money and other valuables. In society’s view, the next valuable things to money are land and real estate property. So, why not use blockchain for land and real estate accounting and transacting without engaging third parties? Just the way DAI, ETH, or Bitcoin can be used for payments.

Who safeguards your rights?

What is the right of property? In a nutshell, it’s a social contract agreed upon by the individuals living in the same territory. This contract specifies who owns a property. It also represents the capability of these individuals to form a budget to protect the owned property and enforce a judicial system to adjudicate disputes.

Modern governments collect taxes, which helps to register and account property rights, protect property (with the police or the military) and litigate controversies. But is a government a safeguard of property rights? Yes and no at the same time. Any government is primarily a mechanism of collecting and managing money. If at some point of time people can’t pay taxes and fill the treasury, the state won’t be able to secure the rights of its citizens effectively.

It means but one thing. Only you and your neighbors, living in the same house, on the same street, or in the same city as you, can warrant your and their rights on an apartment, land, or house. If you can form a strong union with them, then you can protect your rights too. So, is the state really needed here in the age of digital technologies, when people can communicate via messengers, fundraise, and manage cryptocurrencies with no third parties?

Drawbacks of modern proprietorship registries

Each state has its own registries of lands and real estate. They have a varying degree of itemization and specific procedures of registering and re-registering property rights. To an extent, all of them have the following disadvantages:

• not all land plots and buildings are precisely defined by their geographical coordinates. Most building rooms are identified with their numbers, which aren’t mathematically unique;
• the information about the objects is stored on centralized servers, which are usually owned by the governmental institutions. Unfortunately, there are no guarantees this data can’t be lost or changed for someone’s personal gain;
• any actions, associated with registering, imply the use of papers that can be lost or tampered. Due to a social instability or calamity, databases, document archives, or property certificates may become gone forever and with them your property rights;
• every once in a while, paper documents get tampered, or registration and judicial bodies are exposed in corruption;
• property disputes are solved by governmental courts, which takes much time and financial resources;
• in most countries, property acquisition is a long, arduous, and costly process requiring piles of documents and lots of intermediary agents. It may take weeks and months for a person to collect all the documents needed to settle a deal.

Decentralized registry of property rights managed by owners

The solution to the mentioned problem is to create a decentralized global registry that can be controlled only by property owners with the mechanisms provided by blockchain smart contracts. All data associated with land plots and real estate items along with the information related to operations with them will be stored on millions of computers and won’t be lost or tampered. Each object in the registry is a cryptographic token of the ERC721 standard on the Ethereum blockchain, which has its unique and consistent geographic coordinates.

How it works? Imagine land plots, buildings, and apartments in different countries: Switzerland, Italy, Brazil, Indonesia, etc. Legally, they’re owned by companies — custodians — registered in authorized jurisdictions. For these companies, a token represents property rights and liabilities towards the holder. With smart contracts, token holders can perform any operations with their real estate without intermediaries and manage custodians. In case there is a dispute, the parties can solve it using a smart contract. And if there’s a need in legal or physical protection, they can gather funds in Ethereum or DAI among the owners in no time.

In such a system, the fraudster, corrupt official or judge will have to do not with a single person (who in most countries can’t get legal protection) but with a strong community of property owners and international organization that represent these owners.

The decentralized registry can serve a wide range of tasks:

• immediate property deals and transactions with the help of smart contracts and without paperwork or borders;
• mortgage loans in Stable Coins like DAI, which can be granted globally without being bound to a particular jurisdiction;
• communities of household owners managed with smart contracts;
• short or long term residential lease with smart contracts;
• collective investments in real estate, etc.

We’ve already done a tremendous amount of work while developing Ethereum blockchain smart contracts (1 year, 211 contracts, 23 091 lines of code). These smart contracts are already in our testnet. Now, we’ve got even more work with attracting key market players in the project and with creating the community of property owner — the basis of the project. We’d be happy if you could share the information about the independent property registry on Ethereum blockchain.

We’ll provide even more details on how it works in future articles. Stay tuned. Blockchain will change the world!

About us

Galt Project was founded in 2018 as an organization, which invests crypto assets and develops technological projects to change the way people live, manage their property, and cooperate with each other for bettering the world.

More details can be found on our website galtproject.io, Telegram group galtproject (You can also meet our team there!), the galtproject_newschannel, twitter and articles to follow.

Control your money, control your property, control government institutions, control your data!