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First US Real Estate Transaction in Blockchain: What's Next?

Vermont is headed towards blockchain recording of real estate transactions. Other states will follow.

Stories have been circulating about Vermont testing blockchain for recording real estate transactions.

A contact at Propy informs me that the city of South Burlington, Vermont, just became a global blockchain leader by locking in the first US real estate deed completely on blockchain.

Natalia Karayaneva, CEO of Propy said, "This is only the beginning. With this transaction, we've broken first ground in putting the $217 trillion real estate market on the blockchain. We're starting with Ukraine, but over the coming year we plan to facilitate real estate transactions with the use of PRO tokens in California, Vermont, and Dubai."

Business Insider posted this disclaimer "Propy is the source of this content."

I make the same disclaimer.

My contact says "This first deal makes it much easier for the rest of the 49 states to iterate the process. In fact, Arizona and Colorado are next."

I have some questions and will post an addendum when I have answers.

Implications

First, this is not unexpected. I have many times commented that blockchain is perfect for real estate transactions. Real estate is low-volume, high-value. Buying candy bars on blockchain is not practical. Blockchain does not scale.

Second. This does not change my attitude towards cryptos. At some point everything will be crypto, but it will be government-sponsored and it will not be Bitcoin nor Ethereum.

Finally, and most importantly, entire chains of business will vanish.

Think of the business of title insurance. Poof!

Mike "Mish" Shedlock

I am one of the few people who actually collected on title insurance. I bought a partial lot, and the developer forgot to re-plat, and a couple years later, I came home to find someone had marked off an area where he planned to dig his foundation ... in my side yard...and had a title allowing him to do so. I had to buy the land a second time (the original developer had gone bankrupt). How does blockchain protect against this? I suspect title insurance still has a role.

I'm surprised this has only just happened in the US. I was aware of this happening in the UK last year.
https://www.homesgofast.com/housing-market/uk/news/bitcoin-houses-for-sale

I agree mish the Government backed blockchains will outperform decentralised blockchains over the medium term. However we both know that over the next coming decade people's faith in governments will be severely diminished. The question I ask myself is which governments?

Going forwards far into the future I expect more and more fragmenting of nation states. Blockchain is another technology that will aid the divorce of Texas and California from the States, Scotland from the UK, Catalonia from Spain, and God only knows how this will undermine nations with weaker governments.

I came by these views by reading "The End of Power" by Moises Naím.

@Carl_R "How does blockchain protect against this?" You can anonymously pay your neighbourhood city gangster over the internet to have the developers swiftly killed in a drive by shooting.

...not sure if that fixes the situation in this case per se but it sets a precedent that changes something or other doesn't it?

well said, block chain is perfect for deeds. recording deeds using block chain in no way validates crypto-currencies.

Title insurance should be one of the first victims of blockchain technology. I would say good riddance! Here in Texas I refer to it as promulgated price gouging. It's one of the biggest scams going, and one of the most expensive costs for home sellers after agent commissions. Texas has one of the highest costs for title insurance in the country, and not surprisingly homeowners get virtually nothing of value for the cost. Just ask yourself when was the last time you filed a claim on your title insurance? This is one of the reasons why title companies market their services to Realtors rather than end user homeowners. A huge portion of the premiums paid for title insurance here in Texas (rate for premiums set by the state) goes to administrative overhead, not claims. The cost of the premiums in many cases has NOTHING to due with the risk of the policy, and you get screwed even more when you refinance because you get to pay even more premiums/cost for essentially no added risk. It's enough to make your head spin, but the insurance industry and lobbyists have kept it alive because it's profitable. Iowa figured out the scam and went to a much cheaper system years ago. http://www.iowafinanceauthority.gov/TitleGuaranty/Residential

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