Does Naïveté Drive Belief in Universal Property Ownership?

Imagine a world in which all citizens of a given country are owners, at least in part, of the properties they occupy. There are all kinds of laws and regulations in most countries that make the transactional paperwork process alone of such a prospect seemingly impractical. Further, how would the system handle overwhelming contract disputes or develop capabilities to enforce legal actions? Even today, where globally property ownership remains mostly exclusive to the hands of the upper-middle to wealthier classes of society, it is quite costly to administer and regulate various systems that touch property markets.

Many companies in the decentralized finance/blockchain space are working towards solutions to make this utopian ownership model a reality. However, many legal professionals, and in most instances rightfully so, write these initiatives off as infeasible at best, and fraudulent or outright illegal at worst. However, when we look at wealth inequalities and the root causes, one source often cited is the disparity in access to property and equity ownership.

The blockchain industry is still young, and many important developments have led to the democratization of value issuance and transfer, especially in developing countries. Further, regulatory clarity specifically geared towards the industry has driven further development towards new kinds of markets. However, we’re still quite a ways away from reducing the complexity and cost of fractionalized ownership and the development of regulated marketplaces.

There are a few areas that need to mature. Firstly, privacy within these markets. Private equity transactions should remain just that: private. This has the most mature blockchain platforms, such as Ethereum’s mainnet, falling short. Meanwhile, forks of the Ethereum platform by major institutions, like Quorum and Klatyn, are emerging to address these issues. From there, we have KYC and anti-money laundering regulations that require that these markets begin and remain compliant to safeguard investors and the public good. For this, there is a need for unhackable identity layers that can be built on top of private networks that also can be verifiable publicly at the same time. Quorum, Klatyn and a few other projects have been working towards these ends as well; however, we’re not, as you might say, very close to the consumerization of these platforms and protocols. For consumerization, we need better interfacing techniques for users, that do not alienate the majority of people who prefer not to be solely liable parties in protecting and maintaining the keys to their funds, as most blockchain platforms require today. Solutions such as social multi-sig wallets are working to address the need for enhancement of these processes while maintaining user sovereignty over access to their assets, but most are cumbersome to use at the moment. We have not yet seen much adoption by any traditional metric in full custodianship but great accessibility.

I’m optimistic. While we face many challenges in this space to move towards mechanisms that can enable universal property ownership — if that were ever to become a thing — the underlying technologies and development teams around the world have tremendous potential to aggregate open-source solutions and transform transactional inefficiencies across the board. It will take time; however, the net benefit will be more people obtaining stakes in the success of their surroundings. This is a very good thing. It might actually solve many of the other problems society as whole faces today, from the micro- to macro-levels.