Today’s technology is changing the way we live and work. We used to set “work hard” as part of our ultimate business goals, but right now, we have evolved into human beings that focus on “work smart” instead.
For some relatable references, smart homes, smart cities, smart utilities and smart transportations are what we are familiar with. But in this post, we’ll explore how smart property can work through blockchain technology.
What is a Smart Property?
As explained by Yu Zhang and Jiangtao Wen, “the essential of the smart property is using the smart contract to control the ownership of assets on the base of Blockchain”; for example, you can use Bitcoin to represent or to own something other than simply one-unit currency in the Bitcoin system.
What is a Smart Contract?
Smart contracts mentioned above are just like contracts in the real world, with the only difference being that they are completely digital.
In fact, a smart contract is actually a tiny computer program that is stored inside a blockchain. What the computer program will do is that it automatically executes all the contents of the buyer-seller contract agreement in a coded form.
Imagine if you program the smart contract to hold all the received funds until a certain amount, then once it is fully funded, the contract will transfer the digital money directly to you. And of course, it could be more than that!
How do both of them work together?
Smart property works in the way that it can be classified as the extension of the smart contract to the property, whereby it can be created by embedding smart contracts in almost any physical object.
The simplest way to say it will be, a traditional contract is for the property, while a smart contract will be for the smart property.
Further explanation will be that you can secure your property with Bitcoin through the blockchain network. It is proposed that it turns your contract provisions into code and embed them in software or hardware to make them self-executing.
In a practical sense, if you were to buy a car through Blockchain technology, you will be getting possession of the cryptographic keys for operating the vehicle, based on your contract’s provisions. You can even apply the same concept to a house or non-physical property too, such as shares of a company.
Rights of Smart Property
Rights and obligations are embedded as part of the legal property. When it comes to property, it has always been the right of ownership which includes the right to possess, use and dispose of the property.
Possessing the property is that you are in control of the property. Using it is that you can utilise and make it serve as what it is supposed to do. Disposing of it is that you can change the ownership of your property by transferring the property. Since it is transferable, you can make it one of the assets that you can sell.
As for the smart property, it can refer to any property that is controlled by digital means. So, the same goes for the ownership, usage, and disposal of the property, they all are all controlled and carried out by digital means too.
Why Smart Property?
The ultimate goals will be to reduce contracting costs between parties and eliminate unintentional exceptions or harmful acts committed during the fulfilment of a contract. In other words, fraud, mistakes and intermediary costs can be minimised, since the need for a trusted third party has been excluded. Talk about efficiency!
In conclusion, there are many things you can do in the digital space, with the existing blockchain technology. While there are still some existing legal issues with this exercise, it is important for property owners to understand how the ownership of the properties from one person to another using the blockchain works.