Brief Summary of Invention: Title Transactions on Blockchain Technology
Author: David Howie
The blockchain is becoming more widely used as a store of information, for example for proof of transactions. Originally, the blockchain was developed to serve such cryptocurrencies as bitcoin. However, the ability to store information that cannot be fraudulently altered is an increasing attractive feature of the blockchain.
One area in which information must be strongly proved to be valid is for real estate titles. Real estate title determines not only who owns a property, but also the boundaries of that property, known as a parcel. Lengthy court battles may be fought over proof of ownership of a property, proof of transfer – but also proof of the boundaries of the property.
Various decentralized blockchain based property registry and/or Geo located Blockchain systems have been proposed, including PROPY (July 2017), FOAM (May 2018) and XY Oracle Network (January 2018). PROPY in particular seeks to leverage smart contracts to reduce issues of trust, and need for verification of property ownership and transactions. FOAM seeks to provide proof of location for IoT devices and real property. XY Oracle Network aims to provide geo located oracle services for smart contract platforms.
However, none of the above mentioned provide a solution for title management and transfer through the automatic calculation of property boundaries outside of a simple two dimensional parcel calculation nor provide a solution for determination of the boundaries of a parcel through a calculable solution, when multiple units within a parcel are owned by different entities.
Brief Summary of Invention
The system and method of the present invention, in at least some embodiments, provides such a solution for determination of the boundaries of a parcel through a calculable solution, which is also operable when multiple units within a parcel are owned by different entities. The solution features calculation of a centroid that also features altitude. Optionally, the centroid is calculated as a single three dimensional (3D) centroid. Alternatively, it is calculated as a two dimensional centroid and then the third dimension is calculated separately.
Without wishing to be limited by a closed list, this solution permits title analysis, management and transfer according to an automatic calculation of parcel boundaries for situations which cannot be determined through a two dimensional calculation alone. Non-limiting examples of such situations include transfer of a single unit, such as an office or apartment, within a building featuring multiple such units having different owners, or intended to have different owners (such as for example when sold by a builder or developer); or transfer of separate air rights from a building owner.
According to at least some embodiments, the method may feature analysis of parcel boundary information on the distributed ledger associated with the blockchain as a store of information. The parcel boundary information may also optionally be stored elsewhere. When stored on the distributed ledger, optionally also title management is performed through the distributed ledger, for example to determine whether a purported owner of a parcel is the actual owner. Also optionally, title transfer may occur through the distributed ledger.
Optionally biometric controls are imposed to prevent fraudulent transfer. For example, such biometric controls may optionally include facial geometry (for example through a live selfie), retinal scan, fingerprint, palm print or other hand scan, and the like. Optionally, such additional proof of identity is tied to IP addresses to develop a digital signature that could access a wallet of different blockchain addresses to transact on this blockchain. In a permissioned based implementation, depending on the permissions granted and the role to be performed, the user could have different addresses for different roles, i.e., a regulator (or county official, or broker) may want to maintain a node and transact on this blockchain in a specific role identified as a "regulator" by their public key, but then when transacting as a private citizen to purchase, record, or sell, they may use a different address/public/private key for those purposes. Optionally, biometric proof could authentic them to access their wallet of different addresses.
The wallet secured by biometrics may include addresses to transact on other types of distributed ledger and/or blockchain systems as well so that there is interoperability for various types of cryptocurrencies or other such systems for value transfers to complete a real estate sales transaction on this blockchain. Optionally the biometric data is used to generate the private key, which would prevent loss of the key but would not solve the situation in which the owner was unable to participate, for
example due to being deceased, or unwilling to participate, in a transfer.
With regard to a trustee or regulator (in a permissioned based implementation), such as a title company or state department/bureau of real estate, optionally such an entity could maintain a node of the network that would have special permissions and capabilities to manage real estate transactions. For example, optionally a trusted node would have the ability to override control of the current owner of the parcel. Optionally such a node could induce transfer of the parcel even
without participation of the current owner. Such a situation may arise if the current owner is unwilling or unable to participate in the transfer. Optionally, the signature of, or instructions from, a plurality of such trusted nodes would be required to induce a transfer in such cases.
A regulator could perhaps see all public addresses associated with any state real estate license, and have special privileges that could revoke transaction privileges for those public addresses associated with a license if a licensed expired or was not renewed before expiration or was revoked for negligence for transactions with geocodes within that jurisdiction. In a permissionless open sourced implementation, interactions (native token transfers with geo coded meta data) between parties would be unregulated and strictly governed by game theory and incentives. Bad actors and spammers could attempt to cloud titles with irrelevant data.
In this scenario, during data analysis, filters could be put in place to only view transactions by white listed parties willing to defend their publicly recorded claims on the blockchain such as honest good actors and regulated parties willing to participate in an open source peer to peer environment. With the inherit characteristic of each transaction being geocoded in the metadata, this protocol allows it to be universal, in some embodiments, in that each unit of cryptocurrency on
this distributed ledger could be pegged to the native fiat currency for each transaction. This allows simplification of adoption by jurisdictions not needing to introduce legislation for value transfers not denominated in the local currency. It also allows for a simple time series data structure for real estate market analysis that is already denominated in the properties local
currency without the need for cryptocurrency-forex calculations.
Any suitable blockchain which involves a distributed ledger, which preferably requires some type of cryptography, more preferably a public/private key encryption system, or hash or digital signatures, may optionally be used. Once a change – such as acceptance of a contract for a sale of property – is made and is written to the distributed ledger, this change is automatically securely, non-falsifiably, that is completely accurately, replicated to all network participants. The nature of the distributed ledger is such that all parties to a transaction can see the details of the transaction and optionally further requirements for the transaction to be complete.
Such a distributed ledger would also have the advantage of fraud prevention with immutable, append-only Distributed Ledger Technology. For example, users attempting to fraudulently sell a property that they do not possess would be blocked from future rights to the system in a permissioned based environment or simply ignored with filters in an open source
permissionless environment. Centroids may be used to search a public decentralized database, which may for example
be based on a distributed ledger, with geo-fences for all transaction related to a parcel and creating a data structure suitable for a decentralized land registry.
Implementation of the method and system of the present invention involves performing or completing certain selected tasks or steps manually, automatically, or a combination thereof. Moreover, according to actual instrumentation and equipment of preferred embodiments of the method and system of the present invention, several selected steps could be implemented by
hardware or by software on any operating system of any firmware or a combination thereof. For example, as hardware, selected steps of the invention could be implemented as a chip or a circuit.
As software, selected steps of the invention could be implemented as a plurality of software instructions being executed by a computer using any suitable operating system. In any case, selected steps of the method and system of the invention could be described as being performed by a data processor, such as a computing platform for executing a plurality of instructions. Although the present invention is described with regard to a “computing device”, a "computer", or “mobile device”, it should be noted that optionally any device featuring a data processor and the ability to execute one or more instructions may be described as a computer, including but not limited to any type of personal computer (PC), a server, a distributed server, a virtual server, a cloud computing platform, a cellular telephone, an IP telephone, a smartphone,
or a PDA (personal digital assistant). Any two or more of such devices in communication with each other may optionally comprise a "network" or a "computer network".
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David Howie is the CEO and Founder of the Tellus Title Company, a blockchain real estate start-up. David began his career in real estate over 15 years ago and currently is on the Board of Directors of two other real estate firms in California.
At Tellus Title Company we have the right team, the right idea, at the right time. Innovation in the Real Estate Industry needs to start at the most basic level and from there it can ripple into the rest of the ecosystem.
This is why a tech company became a title company and developed the Tellus Blockchain Protocol.
With the evolution of Blockchain technology, we are bringing the latest advancements in technology to the real estate industry.