Poland to Explore Blockchain Tech in Government Digitization Effort
#Poland‘s Ministry of Digital Affairs is taking steps that may find it promoting digital currencies and #blockchain #technology.
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Financial technology matures as government steps in
You would be hard pressed to read the news and not know that #fintech is seemingly at a crossroads. Indeed, some are already declaring #financial #technology dead as a space for the near-term. Not so fast. Read More -
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How The UK Government Applies Blockchain in 2016
#Blockchain had been widely associated with #banks but less frequently associated with governments. This article would open your horizons on the importance of blockchain to the UK #Government based on their recently published whitepaper.
We will extract key points from this 88-page long whitepaper for your easy, bite-sized consumption on the go. First of all, it should be noted that the UK government is serious about blockchain. They even went as far as to equate the weight of blockchain with the Magna Carta, which established the rule of law and forms part of the British Constitution.
The UK Chief Scientific Adviser proposed that the UK government appoint a minister to guide the implementation of the blockchain throughout the administration. It is also revealed the UK forms part of the Digital 5 group of countries with Estonia, South Korea, Israel and New Zealand to work and learn from each other. There are some useful initiatives, but I would point out three noteworthy applications of the blockchain.
Smart Contracts For UK
Before I proceed further, it is useful that blockchain is an electronically distributed ledger system that is designed to be immutable. Once the record has been entered, it cannot be changed at least for the open source unpermissioned network. The UK government is championing the permissioned blockchain network where it can be controlled by trusted actors such as governments and banks.
Unlike traditional paper-based ledger, whenever a trusted actor made changes, the process would generate a digital signature that can be seen by other users in the system. The reconciliation process easy because when one party’s record is corrupted, other parties can authenticate the document.
Taking it a step further, the UK government wants to apply blockchain to smart contracts for industries as wide as food, financial services, health, and utilities. These contracts will restrict access to sensitive information using computer code instead of access being granted by an administrator.
Governance Using Both Legal & Technical Codes
Legal codes are the laws of the land while technical codes are the programming structure that allows systems to run. Legal codes are described as ‘extrinsic’ where the rules can be broken and punishment would follow later. Technical codes are ‘instrinsic’ where the rules cannot be broken as the system will simply stop if illegal activities are detected. This assumes no hacking or security breaches.
The UK government wants the rule of law to govern the operations of technical codes. The private sector such as Visa had already demonstrated that they can use technical codes to enforce their set of rules. For the UK government, they want the best of both worlds.
They want blockchain technical codes to be regulated by laws and they also want technical codes to help them enforce the laws. It was recommended that the government understand how existing technical codes regulate industries such as finance and incorporate them into laws. Web developers can use blockchain to create a more robust internal governance process at lower compliance cost for the general public.
Prevention Forgery & Money Laundering
The immutable and distributed nature of blockchain would make it harder for documents to be forged. Forged documents are instrumental to the smuggling of diamonds which allows them to be converted to cash. Diamonds are small and easy to carry which is the preferred hard currencies for criminal and terrorist financing.
The diamond industry combats this issue by introducing blockchain #technology system Everledger which provides a digital passport for each diamond. Every time the diamond is bought or sold, the passport will record this transaction and the system would prevent forgery and the money laundering that goes along with it.
The UK government also warned against the unpermissioned blockchain that allowed criminal activities to occur such as the ‘Silk Road’ marketplace. They preferred the permissioned blockchain structure which allowed the authorities to control financial flows with ‘off-ramps’.
Conclusion
The UK Government is serious about blockchain, and it wants to compete effectively with other technologically advanced countries such as the Unites States and Singapore. Blockchain is no longer the novel technology, and the establishment has accepted it. The only question is how can governments apply blockchain effectively to the governance process and also to improve the productivity of their industries.
The post How The UK Government Applies Blockchain in 2016 appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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US Government Awards $600k in Grants for Blockchain Projects
The US Department of Homeland Security (DHS) has awarded as much as $ 600,000 in #grants to companies working on #blockchain applications.
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Japan’s Trade Ministry: Government Should Promote Blockchain Use Cases
Japan’s #Ministry of Economy, #Trade and Industry (METI) has released the results of a survey on #blockchain #technology.
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Blockchain – to Replace Government in Real Estate
When it comes to #blockchain, the immutable ledger #technology that underpins #bitcoin, much of the limelight thus far has been on its potential to disrupt the finance industry. However, the transformation that #real #estate may experience from applying blockchain could arguably be just as profound. Unlike financial services, where technological innovation has largely been embraced in the pursuit of profit, much of real estate’s business conduct remains firmly stuck in the past. Many operating methods within the industry have remained unchanged for 50 years, if not longer.
What is a land-registry in a blockchain?
Land registry systems contain records of a country’s land transactions, and operate on centralized ledger systems at present, with the centralized entity normally being a #government agency. At their best, the systems guarantee title of all land assets; however, in reality they provide incomplete security of tenure, are marred by corruption and frequently result in ownership disputes. In contrast, a blockchain land registry system would be decentralized.
This would mark a distinct improvement on the incumbent system, in that every authorized network member would have an authenticated copy of the registry, rather than just one centralized party. Given that everyone can see the records, therefore, the process would be more transparent, which again minimizes the potential for foul play. Removal of the centralized entity is also likely to be cheaper and more efficient – the operating cost of the land registry in England and Wales in 2013/14, for example, was nearly £240 million.
Ragnar Lifthrasir, who is President of the International Bitcoin Real Estate Association (IBREA), is among the pioneers in developing a real estate model which can operate on the blockchain. He identifies three specific uses of the technology in the industry – purchasing, escrowing and the recording of title ownership and associated transfers. Escrowing is perhaps the least developed idea currently, although ostensibly it would be similar to a common bank transfer, only in this case the transferable amount is first converted to bitcoins which are then put into escrow. Nevertheless, as long as both parties agree to use the blockchain over a government solution, Lifthrasir argues, then nothing can stop them.
What are the benefits?
A blockchain would allow someone to upload land title documentation to the network, which other users can record and verify if needed. This would provide proof that this person is the first owner of the documents, and decentralised network verification would prevent forgery. When it’s time to transfer title, the document simply requires ‘rehashing’ (encrypting) by the owner to prove he/she is in possession of the document.
During the actual transfer process, a ‘coloured coin’ system – which US stock exchange Nasdaq currently uses to settle securities – would be employed. A concept first outlined by Swiss computer scientist and Bitcoin core developer Mike Hearn, coloured coins are non-fungible tokens which provide the owner with private keys, thus allowing only the owner to transfer ownership while preventing fraudsters from corrupting the process.
The elimination of costs associated with title insurance and fraud, according to Lifthrasir, is the biggest advantage of using blockchain. This has been a persistent problem with the current system of centralised government records. Criminals are able to fake title ownership, often simply by using editing software to stipulate transfer of property ownership in their favour, and at negligible expense. Indeed, title insurance itself is a $ 20 billion industry, and Lifthrasir estimates that at present it is costing around $ 1 billion to combat title fraud.
Some argue for a replacement of the entire common law system, which currently requires a laborious examination process of public land records before a plot of land is transferred from one party to the other. Joe Dewey and Shawn Amuial, attorneys at US law firm Holland & Knight who specialise in real estate and finance, for instance, are in favour of replacing the government recording of deeds, mortgages and other instruments in land records with the blockchain, as government records are prone to human error and corruption.
Reducing Bribery and Corruption
Indeed, corruption within land registry has plagued much of the developing world, with insufficiently secure governmental systems being regularly prone to manipulation. Honduras is among the worst. USAid Land Tenure estimates that 80% of privately held Honduran land is untitled or improperly titled, while only 14% of citizens legally occupy properties, with less than a third of those citizens being officially registered. Land title disputes in Honduras have led to violent conflict and widespread fraud, with cases of the registry system databases being hacked into and bureaucrats being able to secure the most luxurious properties.
As a solution, US technology start-up Factom announced in May 2015 that it had agreed to build a secure land title record system for the Honduran government using blockchain technology, in conjunction with title software company Epigraph. Transferring land records onto the blockchain, therefore, could be a reality in the not too distant future.
In doing so, Factom CEO Peter Kirby believes that Honduras’ land registry system would leapfrog many systems in the developed world. Although recent reports suggest that the partnership has stalled, Factom is adamant that progress is still being made, so it may take longer for the project to come to fruition than initially thought.
Ghanaian NGO Bitland also claims to be developing a blockchain-based system for entering land title records, in a bid to correct for the numerous failed attempts by the government to develop a fair and efficient land administration system. At present, courts in Ghana are reportedly being inundated with land dispute cases.
Bitland hopes to reduce this burden, and will use the Factom/Epigraph technology, as well as satellites and GPS to verify the accuracy of plots of land. Buyers will also be able to discover the last owner of property rights and land ownership disputes, while the disputes themselves can be made visible to the network, thus ensuring greater security. However, as with Honduras, much work is yet to be done.
Registry system problems, moreover, are not solely confined to the developing world. The US State of Massachusetts has a specific court which has jurisdiction over the registration of title to real property, while in Canada, 95% of land in Newfoundland and Labrador is considered Crown Land, which results in land disputes regularly ending up in court. Kirby believes that the most important issue is for courts to have a true history of what has happened during such land dispute cases. Immutable records based on “evidence and precedent” will be instrumental in adjudicating land disputes, and can also then become part of the permanent record of the land, which the blockchain technology can ensure.
In terms of taking land title records away from government and onto the blockchain, it may prove to be more difficult in some countries than others. In the US, for instance, title companies exist and have large databases of land ownership records, in addition to the government’s own records.
The sheer number of landowners (and thus the number of records), coupled with the overall size of the US, makes the task of shifting from government records to blockchain a lot tougher. However, Dewey and Amiual point to the fact that title companies are likely to act as allies in the technology’s development, rather than enemies, especially if title insurance can still play a role in addressing those risks which are not eliminated by the blockchain.
Lifthrasir believes blockchain will offer significant improvements over the current government-administered system. It would allow the industry to avoid the inefficiencies that arise from the presiding record keeping practices used by government. While Kirby is willing to work alongside the government in the Honduran case, Lifthrasir does not think it is a worthwhile investment of people’s time to teach governments about blockchain. The opportunity to transact directly under blockchain means that the role of government becomes redundant.
Conclusion
Instead, IBREA’s intention is to gather together the real estate industry professionals who favour moving elements of the business onto the blockchain, especially operations pertaining to purchasing, escrowing, and recording of transfer of properties. As Lifthrasir puts it, “So, as long as people in the real estate industry start deciding to use the Bitcoin blockchain to record the transfer of properties, why bother with the delay, cost, and inefficiency of the government?” He is convinced that 2016 will be the year that title management moves onto the blockchain, and in turn, that the technology is developed enough to be used in the real estate industry.
The post Blockchain &8211; to Replace Government in Real Estate appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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Dubai Government to Sponsor Upcoming Digital Currency Conference
#Dubai is set to play host to a #conference on #digital currencies months after a #blockchain effort in the country was first unveiled.
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