What do land and vehicle registries have in common with central bank digital currency (CBDCs)? All of them require official recognition in law by a government to be valid. You can sell a car or house, but it’s only legally yours when the paperwork (and the cooling-off period) is done. A CBDC must “mirror the state of what is there” to become the money of the land—i.e., you can call anything money, but it’s only legally money if your government makes it so.
We’re living in a society
A “blockchain land title” means nothing if it’s not recognized by the government (the same goes for all those blockchain marriages, real estate deals, contracts, trades, and anything else people inscribed on-chain just because they could). With the record immutably written on the blockchain forever, you could still change your mind and contradict it without any legal repercussions.
But, as Dr. Wright says during Day 2 of the Bitcoin Masterclasses #7 if we want to make all this work in the “real world,” then we could. Shortly into the session, he breaks the audience into groups to make lists of 10 things people must provide to the government to officially sanction a change in ownership state. What do you need to prove? What sort of transactions need to occur? Think about insurance, proofs, and the like. And secondly, think of ways to make these work better using the Bitcoin blockchain.
“It’s a very inefficient process at the moment,” one audience member says. Dr. Wright agrees. He mentions stamp duties and the requirement that solicitors and conveyancers must witness and attest transactions.
“These are middlemen, right? That’s the sort of thing Bitcoin can make more efficient,” he states.
Even with blockchain and digital signatures, you’re not going to be able to transfer a land/house title in 10 minutes “no matter what the anarchists say.” But it can definitely speed things up and make them easier to arrange. You could also automate payments like stamp duty percentages, insurance, and council rates from a sale transaction, sending each portion of the money to the appropriate people.
Additionally, you could nLock these transactions, so they’re not valid until a certain time. Even if there are 10 or 20 separate payments from a single input address, they would all be included in the timelocked amount. We can start sending transactions to the blockchain before they’re finalized, meaning they can be automatically finalized once a certain condition has been met—a party signing or a period of time has passed.
For vehicles and used cars specifically, the blockchain can have recorded details like modifications, service/repair history, parts numbers, and vehicle class. All these details (since they’re already on-chain) are verified and don’t need to be re-checked. Permanent, immutable digital records also mean these records remain available forever. You won’t need to keep them in a filing cabinet or remember which file you put them in 20 years later.
We need to think about all these things in ways that capture existing processes, but simplify them. We can’t expect everyone to be technologically literate enough to handle complex transactions, Dr. Wright says. We can’t even expect everyone in the same city/country to speak the same language. We’ll need to engage with these people at some point, including many in developing countries with very different expectations.
I want you to start thinking about how we integrate all this, he says, and how we handle problems if something goes wrong at some stage in the process. He reiterates the point from a previous session: the people designing and coding these systems must have a deep knowledge and understanding of government processes first before they can start building better versions of them.
The seventh session from Day 2 of the Bitcoin Masterclasses starts here. We recommend watching the entire two-day event and all previous seasons of the Bitcoin Masterclasses. All are available for viewing on the CoinGeek YouTube channel.
Watch: What we need to do is incrementally improve business processes
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