Securing proof of land ownership is an enabling factor for increasing equality. Blockchain technology has the potential to make land registration transparent and tamper-proof. Securing land titles is an important step in empowering people to make investments and improve their financial situation.
One of the largest sources of wealth inequality in developing countries is land ownership. Unequal access to and control over land are both a cause and a consequence of inequality in many regions. In fact, only 30% of the world’s population has a legally registered title to their land, and even existing registries are vulnerable to interference, meaning people’s rights are not secure. The lack of transparency in land transactions make it difficult to know who the real landowners are, but new technologies offer solutions bringing increased transparency.
Blockchain can help cut transaction and record keeping costs, increase accuracy, and reduce fraud risk. Blockchain is a distributed, decentralised ledger, protected from revision by advanced cryptography that guarantees consensus by distributing full copies of the ledger across many blockchain nodes. By registering land rights on the blockchain, landowners can avoid costly transactions with centralised institutions, which can be prone to bribery and fraud.
Formalising land ownership facilitates additional services in the financial sector. It makes it easier for landowners to secure loans and invest in their land and future. Studies in Peru indicate that the lack of land titles is a prohibiting factor in the employment of 28% of women, who remain at home to prevent their land from being seized. In the Brazilian state of Amazonas, land titling has reduced forest clearing by three-quarters. Many offices handling land rights still rely on paper documents, but new approaches can cut costs and reduce fraud.
Products and Services
Digital registration of ownership includes platforms to facilitate interaction with both government institutions and private actors such as mortgage brokers. Services that enable users to share land registration with banks offer new opportunities for financial products. Other products in this opportunity space include technology making it possible to measure and register land ownership, such as drones, and mapping tools as well as apps that simplify the process.
Market Size and Demand Drivers
The blockchain market is growing fast, with a compound annual growth rate (CAGR) of 61.5% to 2021, when the market is expected to be worth $2.3 billion. The increasing demands for improved transparency, efficiency, and reduced exposure to fraud are key market drivers in this opportunity space. Blockchain enables disintermediation – the removal of intermediaries – which delivers a faster and safer transaction system.
While blockchain can deliver many benefits for formalizing land ownership, it must be accompanied by a wider program of land reforms, to protect the poor and marginalized from being further excluded. Ensuring women have equal rights to land is a prerequisite for a blockchain enabled land reform. Authorities must also recognize the validity of blockchain, and the technology must develop to reduce the current electricity consumption.
This market was part of the 2018 Global Opportunity Report.