Blockchain Applications Part 4

Blockchain Applications Blockchain Pilot Project at Cook County Recorder of Deeds. How Blockchain Can Help the Government

Once a document arrives at the Recorder’s office, the employees of the office check it for compliance. If the document is compliant with the legal requirements, it goes to the next stage of the process, which is indexing. Currently, indexing is a manual extraction of important data points by the employees of the Recorder’s office. With blockchain, this step could be replaced with smart contracts and made much more efficient because if a network had information about all parcels of land in a certain area and also contained the history of transfers, then there would be no need for manual reentry of data points once a contract is active.

Currently, in the Cook County is it possible to search the database of the properties and obtain chains-of-title, image files of the documents and various indices such as tract index. Obviously, because the entry of the documents is being done by hand, mistakes can occur and make it impossible to find certain documents. This is also something that blockchain technology can help with and improve significantly.

Blockchain would be a great fit for databases with real estate records because in real estate is it critically important to bind each record and each transaction with the previous record or transaction. Currently, CCRD displays documents on its websites in reverse chronological order, meaning that users see the latest records first. This is exactly how blockchain networks store information: current blocks of a blockchain contain information about the latest transactions and blocks that have been created in the past contain information about the transactions that have been occurring during certain time periods in the past. On financial blockchain networks such as Bitcoin, the addition of coins into circulation occurs with the creation of every block and all users know and can monitor the creation of new coins. Because real estate is not something that there can be made more of, a blockchain network with records about real estate could only be additional information about transactions about existing real estate, yet it could be doing it in a similar manner to how the Bitcoin and other cryptocurrency networks add information about financial transactions to their blockchains.


Blockchain can improve the work of the government in four main ways:

  1. More efficient use of resources

The government resources are scarce because in large part they depend on the taxes the government collects from the citizens. In the United States in the recent years, the problem of government resources has been increasing because of mounting pension obligations of local, state and federal agencies. Blockchain can allow the government improve the delivery of services to citizens, which would mean that the government would need fewer employees. Blockchain technology can also allow local government agencies with limited resources implement electronic systems as lower costs because of the laws of economies of scale. Finally, a system that is network-based and that stores data in a secure way will require fewer peripherals such as scanners because all the information will be on the network. This also means saving in both technology costs and employee costs.


  1. Improved accuracy

Currently, many of the recorder’s offices around the country have employees who manually inspect documents submitted in paper and electronic formats and then manually transfer some of the information from the documents to the database indexes. With a manual process by a human, there are always risks of mistakes. With real estate, mistakes include typing errors and errors made by the parties preparing the documents, which means that the current system of storage of documents is only near-accurate, and not completely accurate. Blockchain networks could link real estate transaction data with public records about land, meaning that blockchain databases would be exact and accurate records of what actually happened and of the details about properties. As such, blockchain networks could be both de facto and de jure accurate.


  1. Improved security

While the government does have data storage and security policies, attacks keep developing new methods of network infiltration and at the moment blockchain as a storage solution is much more secure compared to traditional methods. When records are stored in the way they are stored, attackers could potentially infiltrate a network and not steal anything right away, but slowly start altering existing records, beginning with the oldest records. This way, by the time it becomes clear that the network is under attack, it may be impossible to bring the network to its original condition. With blockchain, such a scenario is not possible because as long as there is one copy of the blockchain, it is possible to restore the network if it is under attack. Attacking a blockchain network is also much harder compared to a regular network because blockchain networks are decentralized and do not have a single point that attackers could focus on.


  1. Improved processes

When it comes to storage and processing of information about real estate, the furthest many offices around the world have got to is the acceptance of scanned versions of paper documents, including acceptance of the documents that have both typed information and handwriting.

The first government offices in the United States have started to accept digital files over two decades ago, yet to this day many of the counties have not yet completed the process of conversion from paper to digital file. Many governments do not have sufficient resources to complete the process. They also don’t have the budget to create redundant, safe digital backups. Because of this, records can get lost in fires and technological failures. The blockchain is an opportunity for the governments to participate in the adoption of next-generation technology and to protect records against manipulation and loss.