The notary is a teeny-tiny portion of the expense in the homebuying process. And you'd still need a lawyer involved if your transaction involves mortgages (and likely you'd still want one anyway to construct the transaction). Putting deeds on the blockchain changes the homebuying process almost not at all.

As for state IDs... why not just a centralized database with a public API? What does decentralization achieve for a system that is fundamentally centralized. Nobody can issue an ID except the government in this case.

The promise of blockchain is to eventually remove lawyers and all middleman. It can be done already with existing tech. I can easily imagine a smart contract managing property rights, another one managing mortgages, etc. And of course all that has a back door so a court order can rollback a transaction.

if we are trusting courts to have backdoors, does it not completely negate the purpose of blockchains, i.e. trustlessness

if you trust the court, why not just have them store everything on some mysql database and execute all the ""smart"" contracts as regular java code? blockchains are necessarily orders of magnitude worse in terms of performance. why do you want to use an extremely slow linked list based DB?

No, because courts can be elected by voting on the blockchain which gives society a way to control them. And voting on the chain (if implemented right) cannot be controlled that easily by a government.

I’m all for the central database. To enter data into it the government will appoint an agency which in turn will appoint individuals after they pass exams or get their license. The said individuals will have to fill in regular reports that had to be somehow processed and analyzed. Also each such individual required to keep records in a safe manner, sometimes this means hiring a security and a compliance officer. At this point it is not clear if the cost of maintaining the agency and all that people is less than automating the agency of the blockchain.

i dont know how to explain this to you but the only thing that blockchains replace are databases like mysql. if, for whatever reason you needed a security and a compliance officer, then you would still need them even if you switch to blockchains. if you needed to file reports using a centralized db, then you would still need them with blockchains.

the only difference between centralized databases and blockchains is the property of trustlessness. everything else can be done much more efficiently by normal databases. if you dont need trustlessness then you dont need blockchains

> i dont know how to explain this to you but the only thing that blockchains replace are databases like mysql.

This is just one half. The other half is blockchain and smart contracts also replace all the people involved in controlling access to a central database. I can imagine a smart contract that would allow me to transfer ownership of my car to you and get paid in return. I cannot imagine an API to a central database that can do the same. One thing you can do to defeat my point is to show how such an API can be built.

> And of course all that has a back door so a court order can rollback a transaction.

…so you still need a lawyer and nothing has actually changed?

You got me, lawyers can stay :) But a bunch of clerks and middleman are out.

Today the job of a middleman/clerk is to modify a centralized database in a regulated way. They got their licenses, exams, special education and so on. There is a government machinery behind every such database - agencies, controllers, educators, bookkeepers, etc. While you may be paying $4 for a notary signature you might be paying way more from your tax money to keep governing bodies running across the country.

My point is statement that a centralized database is cheap because it is easy to modify simply ignores governance cost which might be huge.

The reason why lawyers and middlemen are required is not because authority is too centralized into the relevant governing bodies. They're there for lots and lots of other reasons that blockchain can't help with.

Exactly. It is always the same naive and not well thought out argument for this stuff.

As if laws and regulations just came about by a random process for no reason.

The only reason why we have trusted middleman is because before bitcoin there was no scalable solution to Byzantine generals problem. Now we have it. Whenever this solution is better than having a central entity appointing middleman is remains to be seen.

Blockchains can reduce number of middleman we have to deal with. The open question is at what cost.

Mire important than a notary is title insurance. Title insurance is a form of insurance that protects lenders and homebuyers from financial loss from an improper title to a property, for instance someone selling you a property they don’t own.

This is the kind of thing at first glance people say is made for the blockchain, but in reality the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible.

> the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible.

This is especially true when you learn about the nasty edge cases title insurance helps with. A lot of people trying to drum up buyers for their hashes talk like the value comes from recording the chain of transfers when you're really paying for things like handling cases where, say, a surveyor made a mistake in 1952 and now two landowners have legal ownership of overlapping properties or some mistake in probate three owners ago meant that someone has a claim on 10% of it.

Title Insurance is indeed a racket at this point. Their payouts are a tiny percentage of their overall premiums. As you mention, this seems like a good option but in fact isn't a good one.

In order to replace title insurance and make it so anybody can verify the state of a property you need to first make all liens ever live on the blockchain. That's the hard part here. If it is possible to have a lien on a home without that appearing on a blockchain then there is still a need for somebody to review the title.

Further, there is no need for decentralization! The state can simply operate a centralized append-only database where transactions are recorded and liens are created and publish that to everybody.

The average price of a house in Ontario, Canada is $922K:

* https://wowa.ca/ontario-housing-market

When purchase through a lawyer, title insurance in Ontario is around $250:

* https://www.getwhatyouwant.ca/what-the-heck-is-title-insuran...

250 / 922000 = 0.000271 or 0.03%. I've had bar tabs larger that $250.

It is true that the price of title insurance is very small compared to the price of the house. But their expected payouts are still a smaller percentage of their premiums than other insurance.

Torrens title is the boring have a database solution. It solves messy issues like courts having to determine if a lien is valid and recording it if so by changing the DB.

FWIW, I think a notary signature in the US costs like $4. If verification is the only problem that blockchain solves, it's not a very cost-effective solution.

I recently paid ~$150 for an hour's worth of notary services in Canada while preparing a property sale.

I guess I should have driven to Maine.

For me, a US notary signature currently involved a 2 month wait time at the US embassy. At the notary I used back in San Francisco, it cost $30, not including the cost of going there.

You can go into any bank and get a document notarized for free or a few dollars.

Thank! You seem really knowledgeable about the services provided by Japanese banks.

> The Estonian (or is it the Finnish?) Government already uses a blockchain for their digital id system.

if the estonian government is operating and enforcing it, why do you even need the blockchain bit? just put the database onto mysql and and make a website for people to transfer ownership online

If home ownership was on a distributed blockchain, local regulators would rapidly discover a need for something like a notary to verify that the transaction has been done correctly on the correct blockchain by the people who actually own it, so as to ensure the consumer isn't sitting on the other side of the table with someone not bamboozling them about their ownership of the house, or bamboozling them about their transfer of ownership, or so and so forth. The notary would also validate that the transfer has successfully been completed on the blockchain respected by the local governing authorities, and has been filled out completely correctly.

You might think this is silly, but fake selling of homes is actually thing that happens! I don't just mean that regulators would do it for gatekeeping purposes, I mean there would be a real need for this. In the bizarre circumstance that this move to the blockchain actually happened for home ownership, the HN gestalt would rapidly be screaming for legislation and regulation around blockchain changes.

Which means, once again, that blockchain is solving a problem that doesn't exist here. The problem with home ownership and the problem notaries are solving was never that the authority was too centralized into the relevant governing bodies.

That's the reason why after 11 years blockchain has exactly one use case, and even that one is dubiously solved IMHO. It brilliantly solves problems we don't actually have.

I believe you're downplaying the potential here (and I'm overplaying it). A particular blockchain you could immediately verify home ownership online via some sort of signature with the public key from a seller seems like providing the same type of guarantees. Is it 100% safe? Certainly not. But considering your notary might be a fraud, a scammer or just not very good at what he does...

Compare the example with withdrawing money: you can go to an ATM and withdraw money for no fee, depending of the country. Do it in the bank, there I an associated fee.

The legal system would still have to adopt it though. And it's an industry less prone to digital innovation. And there is no financial incentive, as there is no narrow profit margin you need to optimize. So yes, it may never happen.