There is a lot of talk about the potential of blockchain technology. But what exactly is it and how is it predicted to change the home buying process?
What is blockchain?
Put simply, blockchain is a digital ledger in which transactions made in cryptocurrency are recorded in real-time and are accessible to anyone on the internet. So, if you make a purchase using Bitcoin, that transaction is verified and added to the ledger. The same happens when you sell or buy goods using Bitcoin.
Furthermore, these records are there forever; duplicated thousands of times across a network of computers. There is no deletion or crossing out of a line. It is, therefore, an accurate collection of every financial trade that has ever been made using the cryptocurrency.
But, while it was initially devised to help run the various transactions required in buying, selling, and trading for Bitcoin, the world is now finding other potential uses for blockchain technology. What’s more, because it is useful in transactions where there are a number of different parties involved – providing everyone with access to the information they need – the implications for conveyancing are huge.
How can blockchain be used in conveyancing?
Blockchain technology can be used to monitor more than just financial transactions. In fact, it can be used to authenticate all kinds of digital information, with ownership traced back to initial creation. So, when it comes to conveyancing, blockchain can be used to validate the registration of land titles and mortgages; something that is already being done by the government in the Republic of Georgia. HM Land Registry is also exploring using the technology.
Crucially, as blockchain is a shared and continually reconciled database which isn’t stored in any single location, it is impossible to corrupt. Any attempt to hack the blockchain will fail because the other computers will automatically update it. With property scams on the rise, blockchain could, therefore, be crucial in preventing fraud and embezzlement.
While it might sound like science fiction, blockchain it’s already here. Indeed, back in October last year, Clicktopurchase.com completed the first online property transaction by blockchain. Helping to speed up the home buying process, the online property platform reportedly saw a home go from initial marketing to a verified online exchange in just one week. With more than one in three property sales falling through, and nearly 30% of those fall throughs attributed to slow sales progression and conveyancing issues, it’s not hard to see how blockchain technology could revolutionise the property industry.
Do you think blockchain is the future of conveyancing? Let us know.
