According to a report in the Baltimore Sun, foreclosing on a vacant home in Baltimore can take two to three years. It is a legally difficult process in Maryland.
Foreclosure requires city officials to wait for title searches to verify the home’s full ownership history.
As a result of the extensive title searching required for each step in the process of acquiring, fixing up and selling a home, you would be lucky to get everything done in four or five months. Meanwhile, the vacant house can attract bugs, crime, and dangerous conditions.
Baltimore orders blockchain for residential real estate
But the city hopes to solve this with a $225,000 blockchain project. The expenditure council approved the contract for this in December. The Baltimore Sun reports:
“During the three-year pilot, Medici Land Governance will enter records for the city’s approximately 13,600 vacant properties into a blockchain, building a database that is more secure than the system currently used by the city and also more efficient.”
Blockchain techniques can reliably verify ownership of metaverse real estate in Decentraland (MANA). It turns out the technology can also keep records for real estate in North America.
Baltimore attorney Ebony Thompson says the city will now maintain an unchanging chain of custody so there is no need for multiple searches. The city can now certify homes more quickly as they change hands to new developers and residents.
On-Chain Real Estate’s $9.3 Trillion Opportunity
Former US President Bill Clinton once praised Peruvian economist Hernando de Soto as the greatest living economist. De Soto wrote in his bestseller “The Mystery of Capital” that the cost and time required for governments to maintain accurate real estate records are one of the biggest obstacles to economic development, especially in the developing world.
De Soto argued in his book that well-developed systems for maintaining property rights were the key to the prosperity explosion in the first world. Thompson Reuters Foundation reported in 2016:
“For the 5.3 billion people who do not have such rights, the implications are stark: people are unable to leverage their resources to create wealth, and their assets become ‘dead capital’ that cannot be used to generate income or growth to generate.”
Baltimore shows how blockchain can tackle this persistent problem. It could help third world citizens capitalize their properties. By locking in ownership and opening up liquidity, smart contracts can help the world’s poor obtain lines of credit for their homes. This is one of the most common ways new businesses get the seed capital they need to scale.
De Soto estimated in 2016 that providing poor people with title deeds for their land, homes and unregistered businesses would free up $9.3 trillion in frozen assets and convert them into capital for the world’s poor.