Bitcoin, one of the most polarising trends of recent years. How does it relate to property you ask?

Well, it is the technology that supports it, known as blockchain, that is getting people all over the world excited. This innovative form of data storage is revolutionising businesses and industries, from the top end of Wall Street finance right through to community-based medical practices.

Put simply, Blockchain is like your grandfather’s financial ledger. Just as he would record each entry down to the most minuscule record, so too does blockchain record and store entries.

However, the difference here lies in where it is stored. Unlike the enormous scrappy book in the shed, holding years of precious information, Blockchain stores pieces of data across every computer that is operating from the ledger.

This, in essence, means that every computer must qualify and quantify a transaction or entry, and any false, or wrong entries are immediately made aware. 

The benefit of such a system is in its decentralised approach. We can understand this terminology by looking closer at our example. Say your grandpa’s ledger was sitting next to a pile of books scheduled for the bin and was accidentally thrown out with them, or he experienced a house fire, this ledger would be destroyed instantaneously.

This is exactly the same with computer systems nowadays.

We generally host large amounts of information on servers and trust the server operator treats it with care and security. However, they too are prone to accidents and mistakes, and we could wake up one day with something similar happening.

This is what is known as Centralised information storing. Enter blockchain and with it an entire network of nodes (computers/hosts) that store part of our ledger. If one was to break down or have an accident, it would not cause any loss of information because of its decentralisation.

Now, back to my first point, how does all of this relate to the property sector? Well, we are now seeing new and innovative ways of this technology reaching the shores of our industry and with it a revolution in how business will be played out in the not too near future.

Australia has one of the best land titles systems in the world, however, we can always improve and secure to a greater extent.  

Take for example conveyancing. I am not alone when I say that this area of our industry is in dire need of innovation and a technological push up the bum! The mere fact that the paper-based side of this has been only gradually phased out in recent years and we still face technological glitches in what should be a very straightforward system, should be an area of concern but also an opportunity for those looking.

Luckily, the NSW Land Registry Services has thought exactly along these lines. Partnering with a Stockholm based Blockchain specialist firm, they are trialling an internal ledger that aims to underpin the registry’s database.

This will secure the registry beyond its current state while making it accessible and searchable at a far quicker scale than is currently available. Right now, developers around Victoria and soon Australia is just starting to dip their toes into PEXA (Property Exchange of Australia), and its online e-platform.

However, although this system has begun to cut down on paperwork, save costs, and operate far faster, problems still persist and there is room for improvement. At the fundamental level, it is still an intermediary between parties and the record of the transfer in the Torrens system (our current land title system).

The Australian Stock Exchange, a private organisation, has recently created a system known as Sympli.

This will be a blockchain derived property settlement service for lawyers, conveyancers and financial institutions that will directly compete with PEXA. The worry here is that the government has heavily invested in a system that is out of date the moment it's released.

The advantage of blockchain in this sphere is eliminating risks in fraud and theft. We have seen how such issues with PEXA a scary outcome can have, with money going missing and hackers accessing the system all in the last twelve months.

Imagine for a second that you are settling over 100 apartments in a single day, and instead of having all your conveyancers dealing with this in person or through emails and attachments, your conveyancing partners link with the Land Registry and process these immutable transactions within mere seconds.

On top of this, a stakeholder has to make a change, however, they make a typo after a hard day’s work. Usually, this typo would flow on, however, on the blockchain network, we would see an instantaneous error message, because of it not matching prior records.

I know this would save a lot of stress, headaches, and general annoyance during the settlement period for a lot of developers out there!

This exciting new technology is only beginning to scratch the surface, and I for one am excited to see the direction it will take and where it can help our industry innovate and prosper!

Hopefully, we can see more governments follow NSW’s lead and get excited about the future of our industry!

David Tricarico is a director of Adepto Co and the author of davidtricarico.com.au

This is a sponsored blog post.

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