A problem that several underdeveloped countries face is a broken land titles system.
Flawed paperwork, forged signatures, and unclear documents make it difficult to trace the ownership of land.
In addition, it’s difficult for these governments to build infrastructure for each of their citizens.
The pitfalls which keep a central organization from solving this problem are mistrust between citizens and these central parties.
Corrupt officials are susceptible to bribes and have tampered records countless times.
Also, the government does not have the resources to oversee so large a project when it does not bring in a substantial amount of revenue.
In addition, most citizens do not trust non-governmental organizations either, making all centralized options infeasible.
So how do we solve this problem? Well, let’s try a decentralized approach.
What do we include in our decentralized approach? Well, what we’re doing here is tracking ownership of documents, similar to Proof-of-Existence.
We can create an association between users and document hashes.
By associating addresses to document hashes, users can provide digital signatures to prove ownership.
This provides transparency and immutability, since information about all document ownership is public on the blockchain, and also limits centralization because no single entity decides which person owns which titles.
Just like transferring bitcoin between users through UTXOs, we’re simply transferring the land title through smart contracts as well.
However, there’s a big caveat that affects this blockchain use case, along with several others that link real world information to digital information.
In the computer science world, most are familiar with the acronym “GIGO,” which means “Garbage In, Garbage Out.” A blockchain is good at handling internal data through its public auditability, but it can’t reach into the real world and validate inputs.
If the inputs from the real world are incorrect, then the output is also going to be incorrect.
This implies some system for validating inputs into the blockchain — we refer to such entities sending information from the real world into the blockchain as “oracles.” However, this drives us back towards centralization, since we need some trusted third party to serve as an oracle to provide information into the blockchain whenever someone creates a land title.
This problem has yet to be solved.
Georgia, Ukraine, and Sweden are a few of the major countries tackling decentralized land titles, and several companies are seeking to make decentralized oracle systems as well.