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

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.

There are moments in history when technology changes the face of land ownership, such as Britain in the middle ages, when the courts started recognizing land documents, and most small land owners had inherited the land or it was passed them word of mouth or a handshake. The Church understood writing, and documents and quietly went about taking land from the illiterate and poor. The courts were complicit of course just as they were after 2008, when title could not be proven, foreclosures were still done. The only advantage to the home owner in rare instances, is that they were absolved of their obligation, or to wit, stripped of ownership.

the title/mortgage/lien, is still in dollars, I assume. Since all contracts, bonds etc are in dollars, that is what props up our currency. The real news, is when contracts are negotiated in gold or cryptos/alternative currency...that is when the SHTF

How does using a non-distributed block chain in any way improve upon using a standard relational database to record property sales? In Florida, each county has a clerk of the courts who is responsible for safely maintaining property ownership records and the corresponding sale and contract information. How does using a block chain database improve on that process?