Blockchain could be the solution that gives New Zealand a more efficient, streamlined system of retail transactions, one academic suggests.
Blockchain is emerging technology that acts as an indelible ledger of transactions – at the moment, primarily those conducted by Bitcoin.
Danika Wright, lecturer in finance at the University of Sydney, said it could record the movement of any kind of asset when it was sold from one person to another. At the moment, property ownership records are administered by Land Information NZ.
In real estate terms, it could help buyers avoid hidden costs in a transaction, such as the lawyers’ bill, and title registration.
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It would also make the process faster, she said.
“Property is such an important thing to get right and there are a lot of different people involved. You have to make sure there is no accidental or intentional misinformation put into the system. You have lawyers acting for both sides, it becomes more and more complex. It is inefficient because it relies on linear processing.”
Using Blockchain, every property would need to be coded with a unique identifier and the Blockchain ecosystem would have to have defined who the people behind the transaction were.
The transactions would then be conducted via smart contracts.
Sweden has already conducted a trial of the idea.
Wright said it would be especially useful in countries still relying on paper-based records, which were vulnerable to loss in the event of natural disaster, or to being manipulated.
But she said it would reduce the risk of records being accessed fraudulently and altered or deleted in electronic systems too, because it created a permanent record.
Blockchain would also provide a full history of who had ever had ownership rights to any asset on the system.
But that could be a problem if fraudulent entries were added, she said. “One of the big limitations is that it still relies on human programmers. You can say the technology and code are perfect but the human use of it – we are the ones who do have flaws.”
Wright said the incentives were less in New Zealand than some other countries, but it was likely Blockchain would eventually be adopted here.
“It’s just a matter of time before it becomes something people look at.”