Blockchain and Bitcoin
A continuously growing list of records called blocks which are linked and secured using cryptography.
A worldwide cryptocurrency and digital payment system called the first decentralised digital currency.
A property lawyer is responsible for millions of pounds of client money each year ensuring funds are protected and then transacted to complete a property transaction. The current payment process is through our banking system in the UK mainly using the CHAPS method of payment.
Will what we do and how we transact be revolutionised by blockchain technology?
The simplest way to explain the technology is thinking back to when HTML became the visible layer of the internet allowing it to be navigable and appealing to non-engineers. Blockchain technology is similar to HTML and will become the invisible piece of software behind highly trusted transactions like the ones we transact every day in conveyancing.
In October 2017 a dentist based in Swansea was the first property buyer in the UK to exchange contracts digitally in a process which its promoters claim has the potential to remove the need for solicitors in transactions. The buyer acquired a £700,000 commercial property in Trowbridge in an online deal secured by blockchain digital encryption technology.
Blockchain is also being investigated by law firms and insurers as a way of creating ‘smart’ contracts, the terms of which are activated automatically on receipt of trigger information. Blockchain could transform the process by securing all details of the transaction in a tamper-proof form.
So blockchain is potentially a game changer and we are closely monitoring its development and its implementation worldwide. Anything that will make the conveyancing process more efficient is a win-win for the client and the solicitor.
A legal title will still need to be checked and searches will still need to be carried out, but this may eventually be undertaken at the very outset when a property seller is ready to put their house on the market. A digital file would be created and verified without the need for a property lawyer to check it several weeks into a transaction being instructed.
Payment using Bitcoin
In terms of payment, many people worldwide hold Bitcoin as a digital currency and they exchange Bitcoin for other currencies, products and services.
Bitcoin could be used to purchase a property.
In September 2017 a property seller in Dubai listed the first property development ever to be offered for sale using the virtual currency.
The discussion around blockchain and bitcoin will continue and considering the government’s current consultation on improving the home buying and selling process, if greater efficiencies can be created whilst saving time and reducing costs, this can only be a good thing.
At Gaddes Noble Property Lawyers, we will embrace all positive changes and technological enhancements ensuring that cost savings are passed directly to our clients.