Georgia's land registry problem solved using Bitcoin

Georgia is now the fourth easiest country to register property

Sun Sep 5, 2021

Georgia used Bitcoin to solve an age-old problem.

After the collapse of the Soviet Union in 1991 mass privatization of the property took place in Georgia, making it most important for the government to create a systematic approach towards registration and privatization of the immovable assets including land and houses. At that time there wasn’t a specific entity in the government that would be responsible for the provision and coordination of such services. 

In 1997 State Department of Land administration was created and thus, a new wave of changes in the existing land registration system also started. By then Georgia was still a highly corrupted country with no clear definition of the government structure and with no clear division of roles or clear allocation of the responsibilities among the state agencies either. As also described by Castellanos & Benbunan-Fich (2018) “In Georgia, buying or selling land was a long process. To notarize the transaction, buyers or sellers had to go to a public registry and pay a flat or expedited fee to notarize the transaction. The process was slow and prone to bribery."

To solve this, Bitfury group introduced Georgia’s land title project which uses one of the world’s largest Bitcoin blockchain infrastructures in the world

So how does the proof of concept work? At a high level, it will capture and permanently record each transaction throughout the sale of a property. This means you achieve near real-time traceability and transparency into the state of the property.

For example, envision two citizens in the state of Georgia — a buyer and seller — who have negotiated the sale of a house and wish to now register their sale deed with the local authorities. They would proceed to the government services offices as they normally would register the sale deed, which they have in their possession.

The government office will then enter the sale deed into their system, one that is now powered by blockchain technology. This blockchain-enhanced system then takes over and registers the sale deed in the presence of the buyer and seller. It will also process the sign-offs by both the buyer and seller and push the transaction to the approval stage. After the transaction is approved, an automatic transfer of ownership is completed. And importantly, the system will also be able to handle land titles with multiple owners.
From the administrator’s perspective, there are significant transparency, accuracy, and efficiency gains to be had. They will now be able to view and monitor the state of the property and sale deed in near real-time, as well as have instant access to a complete and permanent transactional history for each property and sale deed.

The beauty of this system is that citizens engaged in buying and selling the property will neither require any blockchain accounts or wallets nor will they experience a change in the way they currently interact with the land registry. The blockchain engine simply works quietly but powerfully in the background. The solution will also increase citizens’ confidence in the government and make the overall customer experience less cumbersome. Most importantly it will enhance data security and ensure the authenticity of land records.

Key indicators, such as the Corruption Perception Index have repeatedly shown Georgia´s improvement in the fight against corruption, economic growth has been steady and unemployment remains low (The World Bank, 2018) and the World Bank ranks Georgia as the fourth easiest country to register property. As described by Transparency International in February 2019 these reports highlight the positive, improved governance and democratic oversight within the Georgian democratic apparatus.

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