Malta property blockchain website to host promise-of-sale and public contracts

A property transfer management system promising to facilitate notarial work through the use of blockchain technology has been lacunhed.

The system – the first locally built blockchain application – was created by Ledger Projects and is intended to assist and “empower” notaries handling property transfers, explained David Schranz, a technologist, and one of the company’s two founding directors.

“If someone wants to buy a property and goes to a notary to sign a promise of sale, once that is published it is put on the blockchain,” said Schranz.

The system he said would allow notaries to upload contracts, from a promise of sale onwards, to the blockchain and, in the case of public contracts, will allow them to be viewed by other notaries.

“If you go to another notary two seconds after they will know that property has been sold,” he added.

Schranz explained that this would ensure that any developments in relation to a property are instantly logged on the blockchain in a manner that does not allow it to be manipulated.

In addition to this, he said the platform would also be offering a “business inheritance tool” for authorities, who will have access to real-time information on sales of properties in Malta, including the localities experiencing high rates of property transfers as well as the prices at which properties are being sold.

The platform has gone through almost two years of development, and was designed with the help of a number of notaries in order for it to be perfectly suited to the profession’s needs.

On how the platform’s success would be gauged, Schranz said that while the obvious aim is for the system to be used by as many notaries as possible, the goal is for the system to be accepted by authorities and “adopted as a standard”.

Ultimately, he said that the system would offer peace of mind to both buyers and sellers, since it reduces the potential for human error, while allowing developments to be logged instantaneously.

“Once its online, its done. It’s like transferring money online, where once you see it’s gone through you’re certain there are no problems,” he added. 

Not about replacing notaries

Blockchain technology, like many other new technologies, promises to cut out intermediaries in many sectors however Schranz insisted that in this scenario, this was not the case.

“The system still depends on what the notary is inputting,” he said, insisting that the system would only be using the “smart contracts” side of blockchain technology to make notarial services more professional.

“We just want to introduce smart contract so that the authorities are immediately going to be made aware but the paperwork will remain the same so if a contract must be submitted within two weeks this will not change,” said Schranz.

In theory, explained the technologist, the technology could one day be used for carrying out notarial searches, for example, however this would require the involvement of agencies like the Planning Authority, as well as banks and a vast array of other stakeholders.

“We’re nowhere close to this sort of innovation and we’re not trying to move into that area,” he insisted, adding that unlike bitcoin – which is often associated, or at times mistaken for blockchain technology – the application was not trying to bypass all intermediaries, but rather would seek to compliment and facilitate their work.

What is blockchain?

Blockchain is a shared ledger for recording the history of transactions - that cannot be altered. Transactions take place every second — orders, payments, account tracking. Often, each participant has his own ledger — and, thus, his own version of the truth.

Having multiple ledgers is a recipe for error, fraud and inefficiencies. The goal is to see a transaction end-to-end and reduce those vulnerabilities.

At its most basic, a blockchain is a decentralised and continuously growing list of records that can be added to, but not altered. 

While this might not seem as revolutionary as the attention being received by blockchain might suggest, the innovation lies in the fact that each new record, or “block” in the chain, is secured using cryptography, and has a timestamp and other transaction data. Moreover, the fact that it can be accessed, ensures that each entry is unique and easily traceable, and many working in the field have argued that the value of blockchain lies in the fact that it creates the basis upon which parties involved in any form of transaction can trust each other.

In any transaction involving value, be it money, property or work, a relationship of trust must be established between the parties on either end of the relationship.