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Blockchain in land administration: Toward a transparent land management

Land administration can be a complex task requiring much documentation, but blockchain might soon end that.

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Quantumrun Foresight
February 5, 2024

Insight summary

Legal systems often face many disputes related to land ownership, which agencies handle by ensuring clear liabilities and issuing title certificates. Unfortunately, a corrupt system can also lead to forgeries and duplicate documents for the same property. However, blockchain technology can mitigate these problems and reduce the need for trusted third parties, such as notaries, banks, and government agencies.

Blockchain in land administration context

Land registry management is a crucial aspect of land governance, comprising the preparation of the record of right (ROR) through surveys, land plot mapping, registering deeds during transfers, and maintaining various land-related records. A significant problem with the current system is the fragmentation of information across multiple government departments without synchronization, allowing fraudulent individuals to alter legal documents. Distributed ledger technology (DLT), such as blockchain, addresses this issue by making it exceedingly difficult for any node or group of nodes to falsify information.

Several government agencies have implemented their blockchain-based land management systems. For example, Lantmäteriet, Sweden's land registry, began employing blockchain technology for land and property registration in 2017. Since 2016, the Swedish land registry has proactively invested in blockchain technology and developed a blockchain-based proof-of-concept platform.

Meanwhile, the Dubai Land Department (DLD) also launched the 'Dubai Blockchain Strategy' in 2017. The blockchain system uses a smart, secure database to store all property contracts, including lease registrations, while connecting them to the Dubai Electricity & Water Authority (DEWA), the telecommunications system, and other property-related bills. This electronic platform integrates personal tenant information, such as Emirates Identity Cards and residency visa validity. It also lets tenants make electronic payments without requiring cheques or printed documents. The entire procedure can be completed within minutes from anywhere globally, eliminating the need to visit a government office.

Disruptive impact

Important insights were revealed by a 2022 Jazan University (Saudi Arabia) study on the present condition and needs of land registries regarding blockchain. To access blockchain databases, the property owner usually holds a private key in a secure online wallet. However, problems can arise if the user's private key or wallet is lost, stolen, misplaced, or tampered with by a third party. A potential solution is using multi-signature wallets that require verification from a minimum number of keys before a transaction is completed. Another solution is a private blockchain system that allows a registrar or notary to sign off on the transaction.

The decentralized nature of public blockchains means that storage capacity is limited only by the combined network computers. Registries need to store deeds, names, maps, plans, and other documents, but public blockchains cannot hold excessive volumes of data. One solution is to keep records on a dedicated server and upload relevant hashes to the blockchain. If a blockchain-based data record is needed instead of associated hashes, registries could utilize a private blockchain to meet the more demanding data storage requirements.

However, a potential challenge in blockchain implementation is that the technology is intricate, and the hardware requirements are substantial. It may be difficult for most public institutions to accommodate these additional responsibilities. Although servers could be employed and software provided on a contractual basis, registry authorities would still need to shoulder the ongoing costs of using network specialists. The network maintenance and troubleshooting expenses would be transferred to blockchain service providers.

Implications of blockchain in land administration

Wider implications of blockchain in land administration may include:

A more transparent system, allowing for public access to land records and transactions, and reducing fraudulent practices in land management.

Streamlined land registration and transfer processes by reducing manual work, lowering transaction times, and minimizing errors.

The technology's decentralized and secure nature reducing disputes and protecting land records from hacking, manipulation, and tampering.

With a transparent, secure, and efficient land management system, foreign investors may feel more confident investing in a country, leading to increased capital inflows and economic growth.

Land tokenization allowing for fractional ownership and more accessible investment opportunities. This feature can democratize land ownership and lead to a more equitable distribution of wealth.

Smart contracts enforcing sustainable land use policies, ensuring landowners adhere to environmental regulations and contributing to better resource management and long-term ecological preservation.

The shift to blockchain-based land management systems requiring workforce re-skilling, creating demand for professionals with blockchain and smart contract expertise.