A BLOCKCHAIN-
BASED LAND
TITLING PROJECT IN
THE REPUBLIC OF
GEORGIA
REBUILDING PUBLIC TRUST AND LESSONS FOR
FUTURE PILOT PROJECTS
QIUYUN SHANG AND ALLISON PRICE
Land and property rights are at the center of development challenges.
According to the World Bank, plus que 70 percent of the world’s population
lacks a “legally registered” title to their land.1. Only one-third of countries
worldwide track property ownership digitally, which is critical for effective land
management.2. Without formal access to a land registry, people struggle to
justify ownership of their own property and thus live in fear of losing their land
and the source of their economic livelihood in times of crisis. Poor land
management also adversely impacts society’s long-term prosperity; insecure
land rights have long been considered a major driver of global poverty,
inequality, and political instability. Past disputes over land ownership have in
fact led to social unrest and violence. According to Global Witness, un
nongovernmental advocacy organization, “in 2015, more than three people
were killed each week, on average, defending their land from extractive and
other industries.”3.
The challenge for countries without
adequate land management is not simply
to build a land registry system but to
create a system that is trustworthy,
efficient, et
corruption.
According to Transparency International,
free of
atterrir
20 percent of
service users
worldwide admitted that they have paid a
bribe in order to register their property or
verify land ownership information.4. Ce
reduces the efficiency of service delivery
and undermines public trust in the
72
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government. De plus, corrupt officials
in the opaque government system can
à
facilement
manipulate land title data without risk of
detection.
their positions
leverage
de
peut
et
histoire
immutable
Governments
harness
Blockchain technology to address these
challenges. Le
et
transparent nature of Blockchain could
curb forgery of land titles, create an
atterrir
unmodifiable
transactions,
en temps réel
verification of land ownership. A few
countries—the Republic of Georgia,
the Republic of
Ukraine, Brazil,
Honduras, et
the United Arab
Emirates, among others—have pioneered
the adoption of Blockchain technology to
improve their land registry and transfer
processes.5. While there is not a single
allow
preferred framework, solutions often
involve a hybrid Blockchain solution,
where land information is first recorded
in a private Blockchain that creates
hashes, a fixed-length bit string generated
from variable length input, then posted
on a public Blockchain. This solution is
believed to guarantee the privacy of user
data and
le
immutable nature of public Blockchains.6.
As Michael Graglia and Christopher
Mellon wrote in their report, “Blockchain
and Property in 2018,” while
atterrir
documents have to be stored somewhere,
current public Blockchains are not able to
handle large amounts of land data, tel
as deeds, titles, and maps.
effectively
leverage
To highlight a use case of a hybrid
Blockchain for land registry, this paper
un
discusses
the development of
ABOUT THE AUTHORS
QQiiuuyyuunn SShhaanngg is a Research Associate at the Blockchain Trust Accelerator at New America,
where she supports pilot projects and research on global Blockchain applications. She has pub-
lished pieces on China’s Blockchain development and the adoption of Blockchain technology in
healthcare and pharmaceutical supply chains. Shang holds a master of arts degree from the
School of Advanced International Studies at Johns Hopkins University, where she focused on inter-
national economics and China studies.
AAlllliissoonn PPrriiccee is the Executive Director of the Blockchain Trust Accelerator at New America. Before
diving into the global Blockchain community, Price served in senior public affairs positions with
the U.S. Department of Justice and the Peace Corps. She also has worked for Obama for
America, the Center for American Progress, Gillibrand for Congress, and Stonebridge
International. She earned degrees from the University of Pennsylvania and the London School of
Economics.
The Blockchain Trust Accelerator (BTA) provided Bitfury with strategic support for the development
of this project, including stakeholder coordination and communication outreach. The BTA is a
leading global platform designed for harnessing Blockchain for social impact and governance.
Established in 2016, the BTA brings together governments, technologists, civil society
organizations, and philanthropists to build Blockchain pilots that benefit society. The BTA is a
project of New America, a non-for-profit organization, and it is managed in collaboration with
Bitfury and the National Democratic Institute, with support from the Rockefeller Foundation.
© 2018 Qiuyun Shang and Allison Price
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Qiuyun Shang and Allison Price
Blockchain-based land titling system in
the Republic of Georgia, a pilot project
developed in collaboration with the
Bitfury Group, the National Agency of the
Public Registry
le
Blockchain Trust Accelerator. By using
Blockchain technology, the Georgian
government aims to be a leader in
governance and security and to restore
public
et
trust
organismes gouvernementaux.
(NAPR), et
institutions
dans
CHALLENGES
The land registry system in the Republic
of Georgia was previously managed by
the Bureau of Technical Inventory and
the State Department of Land
Management. These two agencies had
significant functional overlap, as each
ran its own system of land registry that
was generally opaque.7. This enabled
government officials to illegally change
land records in the system for their own
benefit, as such misconduct was diffi-
cult to detect or identify.
It was not until the mid-2000s that
the Republic of Georgia began to combat
corruption, when President Mikheil
Saakashvili’s administration launched a
series of reforms to reduce bureaucratic
red tape and increase the transparency of
government work.8. Dans 2004, the NAPR
was created to replace the Bureau of
Technical Inventory and
the State
Department of Land Management. Le
new agency
à
simplify the land registry process, allowed
more stakeholders to participate in land-
related services, and facilitated legislative
reforms to the processes of drafting and
certifying property
Dans
addition, the NAPR created NAPReg, un
digitized database that included land
registry information such as property
titles and satellite photos.9. Thanks to this
land property
database, details of
introduced policies
transactions.
information such as name, adresse, et
cadastral code can easily be found. Le
reforms also dramatically cut the time
and cost of land registration.
Cependant, building a digital NAPR
database for land titles did not fully solve
the public trust crisis in government
agencies, as officials could still alter land
records. As Georgia’s justice minister
Thea Tsulukiani stated, despite the
benefits of the NAPR database, “there was
a general distrust towards politicians in
Georgia and people felt that politicians
could influence transactions. When you
have shadows of distrust wandering the
streets, the whole system is in question.”10.
En plus, the centralized database was
vulnerable
hackers. While
improvements were made over the
previous system, Georgia still had the
challenge of ensuring data integrity and
protecting the system from internal
manipulation and external cyberattacks.
à
BLOCKCHAIN SOLUTION
Blockchain is a distributed ledger tech-
nology that empowers anyone with an
Internet connection to transfer any-
thing of value (currency, data, survey
answers) with unmatched security and
integrity. Trust is embedded in the
Blockchain architecture—a decentral-
ized, cryptographically secured data-
base that can be seen and downloaded
by everyone on the network. Because
every
un
Blockchain maintains a full record of
the transactions run through the net-
travail, there is no central point of attack
ou
failure. A paradigm-shifting
approach to security, Blockchain pre-
vents fraud by requiring verification
from every source computer before a
transaction is approved.
(computer) de
“node”
The Georgian government has shown
strong interest in adopting Blockchain
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A Blockchain-Based Land Titling Project in the Republic of Georgia
Chiffre 1. Blockchain-Based Land Titling Project Workflow Chart
registry and
technology as part of its effort to restore
public trust in government agencies.
Papuna Ugrekhelidze, former chairman
of the NAPR, said in a 2016 statement
que, “by building a Blockchain-based
property
full
advantage of the security provided by the
Blockchain technology, the Republic of
Georgia can show the world that we are a
modern, transparent and corruption-free
country that can lead the world in
changing the way land titling is done and
pave the way to additional prosperity for
all.”11.
taking
PROJECT DEVELOPMENT
technology between
Following a series of discussions about
Blockchain
le
technical provider, Bitfury, et le
Republic of Georgia, the two parties
formed a partnership in April 2016 à
create a one-year pilot project to move the
country’s land registry system to a
Blockchain platform. Headquartered in
Amsterdam, Bitfury
full-scale
Blockchain technology company that
started out as one of the earliest Bitcoin
mining companies. It has transitioned
into a Blockchain software and hardware
service provider. Hernando de Soto, un
renowned Peruvian economist, serves as
is a
an advisor and supporter of the Georgia
pilot project.
There are several key reasons why
Bitfury and Georgia entered into this
partnership. D'abord, Bitfury had already
established strong ties with the Republic
of Georgia; by the time the cooperation
memo was signed, Bitfury had opened
three data centers in the country. Mais,
more importantly, Georgia has been able
to maintain an accurate account of land
titles in its current NAPR database, lequel
is crucial for the success of a Blockchain
project. The quality of data determines
the success of the project. En fait, le
World Bank has recognized the Republic
of Georgia for the quality of its land
registry service. According to the World
Bank’s report, “Doing Business 2016,” the
Republic of Georgia was ranked third
among 189 countries in ease of property
registration.12. The report showed that it
took only one day to register property in
Georgia and the registry cost accounted
for merely 0.1 percent of the total
property value.13. The Republic of
Georgia’s land registry efficiency far
exceeds that of developed countries such
as the United States and Germany, où
it took on average 15.2 et 39 jours,
respectivement, to register properties.14.
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Qiuyun Shang and Allison Price
Chiffre 2. Blockchain-Based Land Titling System in the Republic of Georgia
Source: Bitfury Group
Since it was announced in 2016, le
Georgia land titling pilot project has had
two phases.
PHASE ONE
The first phase of the project started in
Avril 2016 and lasted for one year. Le
goal of the first phase was to apply
Blockchain technology to Georgia’s
land registry system. It should be noted
that this project did not set out to build
a brand new Blockchain-based land title
registry system for the Republic of
Georgia. What Bitfury created was a
Blockchain-based timestamping layer
on top of the NAPR’s existing digital
land registry system.
According to the Harvard Business
Review, a team of seven people from
Bitfury and the NAPR worked on the
project, with the NAPR in charge of
deciding the system content. Chiffre 1
shows how the Blockchain-based land
registry system worked in the Republic of
Georgia. The user interface was not
modified after the Blockchain technology
was implemented; users log into the same
NAPR system to register their land
certificates with the government. Changes
were made primarily to the backend of
le
système, where certificates are
timestamped and hashed in the Bitcoin
Blockchain, one of the largest and most
secure public Blockchains.
According to Bitfury, one of the most
significant benefits of timestamping is to
“add immutability and allow the owner of
the document to prove to anyone that the
receipt existed no later than the time of
timestamping, and that it was authorized
by NAPR.”15. En outre, to minimize the
amount of data written onto
le
Blockchain and further improve privacy,
Bitfury uses a special data structure,
Merkel Tree, to pool and aggregate
hashes. During the process, the NAPR is
responsible for adding the Blockchain
Application Programming Interface call
in its registry software and providing
guidelines for stakeholders who need to
check it.
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A Blockchain-Based Land Titling Project in the Republic of Georgia
In general, citizens, investors, et
government agencies could all benefit
from an efficient and
transparent
Blockchain-based land titling system that
includes the steps the NAPR took with
timestamping. A sample system is shown
in Figure 2.
PHASE TWO
efficiency
Impressed by
et
le
transparency of Phase One, the Georgian
government decided to expand the
project and signed a memorandum in
Février 2017 to initiate Phase Two.
While Bitfury and the Republic of
Georgia’s government are still finalizing
the design of Phase Two, Blockchain
technology is expected to be integrated
further in order to improve the process of
land sales and transfers.
stated
Former NAPR chair Ugrekhelidze
a
que, with Blockchain
technologie, Georgian citizens will be able
to access their property information on
the NAPR website and put it up for sale.
The nodes of the network will verify that
the buyer has sufficient funds and that the
seller owns the property before the
transaction is concluded. With the new
technologie, all land sales and transfer
information will be accessible to the
public and it will not be easily altered by
government agencies. To realize this
vision, Bitfury suggests using Exonum, un
le
private Blockchain
company developed that anchors data to
the Bitcoin Blockchain. Anchoring is the
process of storing a fingerprint (a hash) de
a system to a public source. Bitfury
explains that “anchoring removes the
need to trust the administrator(s) of an
Exonum Blockchain unconditionally; à
the same time, it keeps sensitive data
private.”16. Exonum was still being tested
as of September 2018, while Bitfury has
begun discussions with other agencies
framework
interested in participating in Phase Two
of the Georgia project.17.
CONCLUSION
According to Forbes, the Georgia pilot
project marks the first time a national
government used the Bitcoin Blockchain
to record land titles.18. The project has
significantly improved the government’s
efficiency and helped restore public trust
in national agencies. As of 2018, a total of
1.5 million land titles in the Republic of
Georgia were published on
le
Blockchain, which ensures the security
immutability of the data.19. Dans
et
Novembre 2017, Bitfury presented its
findings from the Georgia Land-Titling
Project to students at Harvard Business
School.20.
The success of the Georgia project
was the result of two crucial elements—
education and data quality. For a
Blockchain-based project to succeed, tous
stakeholders must be educated about
Blockchain technology and the challenges
it can address. Tomicah Tillemann,
founder of
the Blockchain Trust
Accelerator, said of the Georgia project
that “education and public engagement
are as crucial as the technical side of the
travail. Technology is not going to take
care of itself. People and the government
need to know why they are using this
technology and what problem it can
solve.”21. Throughout the project, le
NAPR helped the Georgian people
understand how Blockchain technology
can ensure the immutability of land title
data without sacrificing privacy.
More importantly, the existence of
high-quality data helped guarantee the
validity of the project. Without accurate
data, the power of a Blockchain-based
solution for a land registry would have
been greatly limited, as poor-quality
information posted on the Blockchain
would make third-party verification of
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Qiuyun Shang and Allison Price
8. Weiss and Corsi, Bitfury.
9. Weiss and Corsi, Bitfury.
10. Weiss and Corsi, Bitfury.
11. Shin, Laura. “Republic of Georgia to Pilot
Land Titling on Blockchain with
Economist Hernando De Soto, BitFury.”
Forbes, Avril 21, 2016. Available at
https://www.forbes.com/sites/laurashin/201
6/04/21/republic-of-georgia-to-pilot-land-
titling-on-Blockchain-with-economist-
hernando-de-soto-bitfury/.
12. Doing Business 2016: Measuring Regulatory
Quality and Efficiency. World Bank, 2015,
p. 211. Available at
https://doi.org/10.1596/978-1-4648-0667-4.
13. Doing Business 2016, p. 211.
14. Doing Business 2016, p. 251.
15. “Answer Notes from Bitfury’s Head of
Exonum Gleb Palienko,” December 2018.
16. Exonum website, Décembre 2018.
Available at https://exonum.com/.
17. “Answer Notes.”
18. Shin, Laura. “The First Government to
Secure Land Titles on the Bitcoin
Blockchain Expands Project.” Forbes,
Février 7, 2017. Available at
https://www.forbes.com/sites/laurashin/201
7/02/07/the-first-government-to-secure-
land-titles-on-the-bitcoin-Blockchain-
expands-project/.
19. Weiss and Corsi, Bitfury.
20. “Bitfury Trumpets Blockchain Land
Registry with Republic of Georgia at
Harvard and UN.” International Business
Times UK, Novembre 9, 2017. Available at
https://www.ibtimes.co.uk/bitfury-
trumpets-Blockchain-land-registry-
republic-georgia-harvard-un-1646616.
21. Tillemann, T. Personal Interview, Juillet 7,
2018.
land titles difficult. The high quality of the
NAPR data was a consequence of the
political reforms pursued by the Republic
of Georgia before the project. This speaks
to an important truth of Blockchain-
based solutions for governments: alors que
the technology can ensure the security
and immutability of information, it
cannot be a substitute for the institutional
infrastructure
pour
ensuring the quality of data.
is essential
que
1. “Why Secure Land Rights Matter.” World
Bank text/HTML, Mars 24, 2017.
Available at
http://www.worldbank.org/en/topic/land.
2. Deininger, Klaus. “For Billions without
Formal Land Rights, the Tech Revolution
Offers New Grounds for Hope.” Let’s Talk
Development text, Mars 15, 2018.
Available at
http://blogs.worldbank.org/developmenttal
k/billions-without-formal-land-rights-tech-
revolution-offers-new-grounds-hope.
3. Jochnick, Chris. “Land Rights and Global
Development.” Foreign Affairs, Février 7,
2017. Available at
https://www.foreignaffairs.com/articles/201
7-02-07/land-rights-and-global-
development.
4. Avramov, Yuriy Valentinovich et al.
“Registering Property: Using Information
to Curb Corruption.” World Bank,
Décembre 1, 2017. Available at
http://documents.worldbank.org/curated/e
n/270331513854675950/Registering-
property-using-information-to-curb-
corruption.
5. Graglia, Michael, and Christopher Mellon.
“Blockchain and Property in 2018: At the
End of the Beginning.” Innovations 12, Non.
1-2 (2018): 90-116. Available at
https://doi.org/10.1162/inov_a_00270.
6. Graglia and Mellon, “Blockchain and
Property.”
7. Blanc, Mitchell, and Elena Corsi. Bitfury:
Blockchain for Government. Harvard
Business School Case 818-031, Harvard
Business School, Octobre 16, 2017.
78
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