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.


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

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.

I would have thought New Hampshire would be ahead of Vermont in the move to leverage the efficiencies of cryptos. Although, the move by socialist safe-state's like IL toward bitcoin for tax payments shows financial desperation is also a driver for crypto adoption.

The leading states in the race to become "crypto valley" are WY and AZ, but the obvious benefits of security and efficiencies will force not only states, but businesses into the crypto world. Below are just a few more examples of how the blockchain will be utilized:

Mish, it's encouraging to see you've softened your position on cryptos. In the past you would have argued that these states, and companies like Porsche, GE, FedEx, and many others are wasting their time and money on blockchain-based technologies. However, your belief that they must be "govt sponsored" demonstrates you still don't understand the decentralization driver behind cryptos. Although, I'm not sure what is implied by "govt sponsored". If it's a rubber stamp registration fee to make sure govt gets its cut without adding value, then I can see the crypto world tossing them some lobbying bread crumbs to maintain their facade of importance. However, if you think cryptos need govt to move forward, then you don't understand the declining trend of govt trust and confidence, which is a giant snowball that has not yet reached the cliff. Govt, by its very nature, is always light years behind the learning curve, and when confidence hits the rocks below, they will come begging to be included, or risk a revolution.

Your CYA disclaimer about "it" (crypto) not being Bitcoin or Ethereum is meaningless. No one has been saying that Bitcoin or Ethereum would be the only cryptos. Your statement is like saying credit cards will not advance because the Diners Club Card won't be "the card". Bitcoin and Ethereum - along with Litecoin, Monero, and the other initial coins are driving the competition for improved solutions.

Haha. Actually, in my case, the title insurance worked. I was able to buy the land a second time, and all my costs were covered, so I was made whole. On the other hand, I don't know of anyone else who ever collected anything off of a title insurance policy, so the cost of them is remarkably high. Rather than saying Title Insurance will vanish as a result of this, I would rather guess it will remain, but the price will drop substantially.

As the ramshackle US economy careens headlong into the abyss, crypto currencies are starting to look promising. We’re already pretending to work, Bitcoin will help TPTB to pretend to pay us.

One topic I've never seen discussed is how a blockchain ages, in particular with smart contracts. Real Estate lasts forever. As the smart contracts evolve, for instance when specific plat information is added to avoid duplicate titles, how does the encrypted, unmutable transaction the person in the story entered into get modified with the new information? How do you fix a mistake in a smart contract? The docs for our current house had the correct property location but gave a mailing address that transposed the house number. That got propagated to the property tax department who mailed reminders to that location until we became responsible for paying the taxes and I got the mailing address corrected. For a time there will continue to be a paper trail of RE docs and the processes for recording documents on paper will continue, like other IT projects(think accounts receivable, accounts payable,) eventually that will be abandoned or at least forgotten by those involved in RE transaction (eventually maybe nobody but the two parties.) I hope the system is well engineered with geographic dispersion. Even if the primary system is destroyed in a hurricane or nuclear exchange, property ownership records need to be maintained for hundreds if not thousands of years.


Are there any public companies that capitalize on providing the technology or capitalize on using blockchain

Zerohedge keeps talking up Bitcoin like a car salesman. It’s like talking up the Edsel because gasoline is useful.

I disagree, the thing about any communication technology is the adage, "garbage in, garbage out". Since none of properties being transferred were ever certified by blockchain, that process will take time and effort. I had some issues I had to resolve with the assessor, and the map agent told me half the titles in my country are wrong. They go on INTENT. And there are fundamental issues between planning departments and home owners which are ignored for the sake of expediency. The blockchain system is going to reject most RE transactions unless of course the sloppy nature of title transfer is programmed into the blockchain, and that ain't going to happen.