Colored Coins: Bitcoin, Blockchain, and Land Administration
Written By: Aanchal Anand, Matthew McKibbin, and Frank Pichel
Paper prepared for presentation at the “2017 WORLD BANK CONFERENCE ON LAND AND POVERTY” The World Bank – Washington DC, March 20-24, 2017
In May of 2015, news broke that the Government of Honduras was working with Factom and Epigraph to build a land registry system using the blockchain technology that powers the controversial cryptocurrency Bitcoin according to press releases This sparked considerable interest regarding how blockchain technology might be applied to land administration, with claims that it might revolutionize land information management. Over the course of 2015 however, little additional, detail regarding the venture in Honduras was progressing, culminating in a press release in December 2015 stating that the project was not as far along, nor at the scale, that was originally stated. Regardless, the question of applicability of blockchain for land had entered the public domain, and numerous organizations have begun to look seriously at how they might apply the technology This paper delves into: (a) the blockchain technology; (b) its advantages, disadvantages, and upcoming trends; (c) its relevance to land administration, and (d) a proposed roadmap to test this technology in the context of donor-funded land administration projects.
Blockchain technology is a distributed database maintaining an immutable public ledger of all transactions. This technology is disruptive because it allows for the time stamped accounting of transactions between any party that chooses to use this as a method of recording information. Governments, businesses, and individuals can know for certain the information recorded has not been altered without a record of the change occurring. Decentralized storage of information is done by every node on the network, each maintaining and continuously verifying a complete copy of all transactions. To create a record on the blockchain users submit unique mathematical signatures with privately held computer keys which further helps to minimizes fraud by ensuring authentication of the user. Multi-signature governance accounts allow for increased security by distributing transaction approval over key decision makers involved with the records.
In the context of land administration, blockchain technology has the following applications: (a) title deed registration; (b) time-stamped transactions; c) multi-party transparent governance tools; (d) tamper proof recording system; (e) disaster recovery system; and (f) restitution and compensation in post-conflict zones.