Finding Real Value: Blockchain as the Engine of Transaction Governance

It would be valuable to consider how this may work in a real-life use-case.

Well known for its production of high detail mapping of Great Britain, Ordnance Survey and their partner Trimble are packaging their great spatial capability as managed services offered on a global basis, including services in the land administration space, where blockchain technologies are of interest.

Within this domain of land administration, the issue of trust in the land authority has proven to be a significant problem. There are many jurisdictions where a history of corruption has led to citizens being unwilling to trust their government to properly record land ownership.

Can blockchain technologies be of value here? It appears so. There are opportunities for improving the visibility of a transaction and the trust that can be placed in it for all participants—the buyer and seller, their lenders and other interested parties (such as tax authorities).

There is much discussion that is outside the scope of this article about public vs private blockchains—and that discussion could be seen to be comparable to the “open source” vs “closed source” discussion of some years ago. So saying, early enterprise grade government implementations seem likely to adopt private blockchain technologies to create the “land authority” blockchain over public blockchains such as Ethereum.

Such a blockchain requires a network of hosts to operate the copies of the blockchain, and this network would likely include entities such as government departments, banks, and perhaps large real-estate agents. It is further possible that third parties such as the World Bank may be a host of a copy of the blockchain.

To enable a land transaction to take place, a Smart Contract would be used to define the rules of the transaction between the buyer and seller and other interested parties such as their lenders and the tax authority; and this Smart Contract would be executed on a blockchain.

It is here that the key value of blockchain technologies is realised. Rather than the transaction taking place behind the closed doors of the Land Authority, the Smart Contract executes visibly and transparently on the multiple copies of the blockchain, with all hosts of the blockchain reaching consensus on the result: the buyer receives title to the land, the seller receives their payment, the seller’s lender is paid off and so on.

The outcome of the transaction will be recorded on the blockchain, and again the visibility and immutability of these transactions would enable the state of the register of land ownership to be validated from the transaction history held on the blockchain.

This brief outline shows blockchain providing real value–and there is utilisation potential across a number of other domains outside the land administration example above.

Despite the hype, there is value to be found.