With physical documentation, there is always a significant risk, whether it be physical damage, getting lost, or being tampered with. However, in an increasingly online world, a secure blockchain may speed up processes and more securely hold records. As part of the Legal League 100 webinar series, Michelle Garcia Gilbert, President, and CEO, of the Gilbert Garcia Group and Katie Jo Keeling, Managing Partner at McCarthy & Holthus addressed how this technology may be adapted to serve the real estate industry.
Giving the definition of the blockchain, Garcia said that The blockchain was a “peer to peer ledger,” a continuously growing list of records that were secured cryptographically across a network. She explained to the audience that data from a blockchain was impossible to alter, leaving records from the past accurate. This data is available to all on the network, with information being encrypted with the public key of the intended party, available to all on the network, and then decrypted with a private key available only to the intended party.
Going on to explain how blockchain could be implemented in real estate, the webinar touched upon topics such as the current paper title system, which has plenty of room for errors and how blockchain was different and more secure. The webinar explained that blockchain for real estate transactions meant records were indestructible and couldn’t be tampered with. Giving a glimpse of the future with blockchain technology, the panelists said that in-person closings would become a thing of the past, as everything would be available across the network.
The webinar also gave insights into how blockchain could help financial services firms and the drawbacks of this technology today. A blockchain network requires a large amount of energy consumption, especially as the blockchain expands. Additionally, all relevant parties must be subscribed and collaborate to access records, the Garcia explained during the session. Another issue is the fact that blockchains are currently unregulated, which means the verdict is still out on how privacy laws, intellectual property and other legal factors would apply.
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