Land registry? Blockchain? NFT? Colour me Sold.
Every new invention comes with the desire to apply it to everything - even where this is not necessary. The blockchain isn't very different. I've seen many proposed applications; some of them great, and some of them evidence that some things should be left centralised. This is my treatise on a land registry built on the blockchain. I don't think technology is great because it is shiny or novel. Instead, we should measure greatness by how much it makes our lives easier. Naturally, I would like to show you that a land registry on a blockchain is not just applying new technology for the sake of it. It is using what we now have to solve the problems that have long plagued us.
Land transactions can be difficult for several reasons. Expensive lawyers, lack of title, and time are only some of the problems. Your greatest problem with land transactions will largely depend on your location and the land allocation system in that location. I grew up in Lagos, have been here all my life, and think the greatest problem with land transactions is a valid title. My father was a lawyer, who would sometimes tell me about some of his land cases. I now study law, have offered land law as a course, and have read many cases that should otherwise have been straightforward. When your father tells you about a ten-year long court case to simply show you own a land that should clearly belong to you, it is difficult to push the problem out of your mind.
A judge had this to say, as early as 1956:
The case is indeed in this respect like many which come before this Court: one in which the Oloto family either by inadvertance or design sell or purport to sell the same piece of land at different times to different persons. It passes my comprehension how in these days, when such disputes have come before this Court over and over again, any person will purchase land from this family without the most careful investigation, for more often than not they purchase a law suit, and very often that is all they get.
Over half a century later, and it is still the same. Blockchain solves this. The ERC-721 Ethereum Standard is the non-fungible token standard. A token being non-fungible simply means that it is not replaceable with another. Two one hundred Naira notes are fungible, because they represent the same value to every person. However, my personal computer is not fungible with yours, because they cannot replace each other. Cryotocurrencies are ordinarily fungible. One ether is the same as any other ether. While there are some factors that can affect fungibility, such as damage or a blacklist, this is the general idea. The advent of non-fungible tokens means people can now have a deed on the blockchain to represent ownership of something in the digital or physical realm. Usually, a copy of any other document is a perfect copy of it, and so can conveniently replace it. However, a copy of an NFT remains just that - a copy. So far, the most popular application of NFTs is to digital art and the creator economy at large. It goes beyond this.
There are a couple of things we need to do to solve the problem of property rights.
We need to find a way to know exactly who has the property right.
We need to make sure only one person can own the right at a time.
We need to recognise the expiration of the right if certain conditions are fulfilled, to account for situations of government requisitioning, forfeiture for violating the law, and adverse possessors.
There are other things that are doable and would definitely increase a land registry on the blockchain. As an example, the registry may recognise that title is a bundle of rights and make the assignment and leasing of different parts of the right possible. But for the sake of time and space, I will constrain my thoughts to the basic idea.
So that I am not a hypocrite, and I am not like those that wish for technology's application for the sake of it, I now have to explain why a centralised system is not appropriate for this. The greatest evidence of this failure is what Lagos State currently has, although papers are used instead of a centralised computer. But there are other reasons to favour decentralisation. Security, speed through the removal of bureaucracy, non-discrimination since such a system will not care about who attempts to obtain the property, and accessibility. This is not to say there will be absolutely no regulation. However, the rules of the regulation have to be defined into whatever smart contract powers the system and cannot be discretionarily waived. There was an earthquake in Haiti in 2010 that destroyed municipal buildings containing records, with one result being disputes over ownership of thousands of plots of land. Also, central database systems are vulnerable to tampering. These should be enough to make a centralised database for land registries the stuff of nightmares.
Through a blockchain, secure transfer of titles can be guaranteed. Only one person can own the NFT representing ownership of a property in the physical world at a time. Even more, that deed would clearly show all the world that this is the case. It will be trustless - parties do not need to trust an independent third party. Neither would such a system rely on a server.
There are edge cases that a land registry on a blockchain would need to account for. I already mentioned some earlier - adverse possessory rights, government requisitioning of land, and forfeiture of land rights upon breach of law.
The concept of adverse possession has existed for centuries. In essence, if someone has abandoned a piece of land and someone moves into it and stays there for a long time, the former person loses the land to the latter. It serves practical and commercial sense. Abandoned land should not be left alone when there is scarcity. The easiest implementation of this would be a renewal system. Every few years, land owners can simply renew their ownership. It does not need to be a complex procedure; it could even be the click of a button that becomes active around that period. There should be a reasonable period for this, possibly a year or more, so that there is ample time to renew ownership.
Wallets belonging to government authorities can be granted special authority. Preferably, this should include multiple institutions from the different arms of government, to serve as a check. Only when there is unanimous agreement amongst these wallets can a person forfeit their rights. Different conditions may be in place for different circumstances. This is another reason it should not be centralised. A centralised system could easily be bypassed once the system administrator wishes so.
There are still many problems to be solved before we can seriously consider this possibility. Nigeria is not the most technologically advised society. Also, the current owners of pieces of land strewn across the country would need to be confirmed - although such a blockchain registry would ensure that a dispute of title resolved now will have been resolved forever. There is the matter of the bribes the current Nigerian land registry system facilitates, and so it should be understandable that there will be substantial opposition. Of all the potential challenges I see, perhaps the greatest is the need for government support. Land rights cannot be enforced socially the same way the rights for digital art are - a community recognising your ownership isn't enough. You need to be able to actually possess your land. You also need the government's backing to do this. So understandably, I don't expect this to happen soon. I just hope that someday, before all the strands of my hair become grey and my skin becomes wrinkly, we will consider it. If you're curious about some countries exploring this, you could check out the Republic of Georgia, Ukraine, Brazil, the Republic of Honduras, and the United Arab Emirates.