In a vote of confidence for a fledgling technology, the Republic of Georgia committed in a signing ceremony in Tbilisi on Tuesday to use the bitcoin network to validate property-related government transactions.

In April last year, the government and bitcoin hardware and software firm Bitfury Group launched a project to register land titles via a private blockchain, which is a tamper-proof ledger, and then to make those transactions verifiable using bitcoin’s blockchain, which is public.

It is the first time a national government has used the bitcoin blockchain to secure and validate official actions, signifying a vote of confidence for a technology still somewhat tainted by an early association with illicit activity.

Having so far built the software and tested it with a couple dozen land title registrations, Bitfury and the Georgian National Agency of Public Registry have now signed a new memorandum of understanding to expand the service to purchases and sales of land titles, registration of new land titles, demolition of property, mortgages and rentals, as well as notary services.

The Bitfury and Republic of Georgia initiative is just one of several collaborations aimed at creating blockchain-based land-titling services. (Such software is also being created in Sweden, Honduras and Cook County in Chicago with startups ChromaWay, Factom and Velox, respectively.) Peruvian economist Hernando DeSoto, who has also been involved in the project, has estimated that worldwide, the value of “dead capital” — in which people do not have legal title to their houses, cars and other assets — at $20 trillion.

Tea Tsulukiani, Georgia’s Minister of Justice, said in a statement, “We will be able to work with Blockchain technology from this summer [to] place real estate extracts in a totally safe and innovative system.”

NAPR chairman Papuna Ugrekhelidze said in a statement that his department is “very pleased with the technical progress and looks forward to continuing [their] fruitful collaboration.”

Noting that the Georgian government “like[s] how the work was done and how easy blockchain is implementable in the existing system,” Bitfury chief executive officer Valery Vavilov said in an interview that the changes were all made on the back end, and the only difference for Georgian citizens is that they can now check if a land title is legitimate (if it’s been entered into the system).

Calling the work so far a “phase one, beta stage” and declaring that the software will be “fully operational” this year, he said, “The big goal is to move [the process] to smartphones, so people can use it 24/7 and all transactions are secured, transferrable and accountable.”

Bitfury has raised $90 million in funding, including a recent $30 million investment by Credit China Fintech Holdings.

Applied to property, blockchain technology holds promise in several ways. In a blockchain-based ledger, records are time-stamped, as are subsequent changes to those records. This would allow enable people interested in a specific property to see and verify the date of past transactions.

Additionally, data on blockchains can be made private or public. In this case, the details of the real estate transactions are placed on a private blockchain network run by known computers, and then, in order for citizens to verify the authenticity of certificates, that data can be turned into a cryptographic “hash” that’s made public on the bitcoin blockchain which is run by thousands of computers worldwide. The hash is a type of digital fingerprint that enables anyone to verify that the data matches what’s on the blockchain without seeing the data itself.

Finally, blockchain technology brings security to real estate transactions because there’s no central point of failure. The ledger is distributed among many computers, so a would-be hacker would need to simultaneously attack at least 51% of the network in order to fraudulently alter records.

While many financial institutions and governments have expressed interest in blockchain technology, the vast majority of them have been pursuing private blockchains, some for reasons of privacy and some perhaps because of bitcoin’s early reputation as being the currency of choice for online drug dealers.

However, Bitfury is working with the bitcoin blockchain both because it is public, for purposes of transparency, and because it is the blockchain that would be most difficult to fraudulently alter. Last summer, the company partnered with New America and the National Democratic Institute to create the Blockchain Trust Accelerator to work on pilot blockchain projects that have a positive social impact; the Georgia pilot is the accelerator’s first.

Trust Accelerator cofounder and New America director of the Bretton Woods II program Tomicah Tillemann said of Georgia’s decision to use the public bitcoin blockchain, “Especially at a moment when there’s a global crisis of confidence in institutions, this is a powerful indication of their commitment to transparency and accountability.”

The MOU comes at a time when the future of the bitcoin blockchain is up in the air due to a longstanding rift in the community over how to expand the network to accommodate more transactions. The inability to come to an agreement raises questions about how long the network can be sustained if no process emerges for resolving stalemates. But Bitfury executive vice chairman George Kikvadze said the fact that there was no one at the helm of bitcoin was a strength. “Once you start centralizing it and making decisions fast, the whole point of security and the whole power of the trust protocol goes out the window. ”

Eventually, Bitfury plans to also help put notary services and smart contracts (programmable contracts that self-execute when certain conditions are met) for services such as escrow in Georgia onto blockchains. While many of the technology’s enthusiasts tout the potential for blockchain to improve notary services, processes for verifying the accuracy of information that gets placed on the ledger have yet to be established. However, Tillemann noted that Georgia’s property registration systems were ranked third best in the world by the World Bank, which bodes well for any future notary products there. “We have great confidence that the information coming into the system is valid. They have good controls in place to ensure it’s accurate, that they aren’t going to be registering erroneous data on the blockchain,” he said.

One of the advantages in the pilot, said Bitfury chief communications officer and accelerator cofounder Jamie Smith, was the strength of Georgia’s already existing software. “You want to be in a situation, especially in these pilots, to put the best systems on [blockchain technology],” she said.

Kikvadze said the choice of partner enabled the pilot projects to move forward more quickly and efficiently. “We found the right partner in the Georgian government,” he said, relating a story about how Tsulukiani has become so fascinated by blockchain that her assistants say that any time she has a free moment, she watches Youtube videos or takes online courses on blockchain technology.

“If you think about this happening at a time when a lot of people are struggling to separate what’s real from what’s fake, this is a powerful tool to prove what’s real, said Tillemann. “Especially when you’re dealing with something as fundamental as your home or property, it’s important to have that added layer of security that’s provided by blockchain validation.”

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