Vermont Launches Blockchain Project
Early efforts to use blockchain technology for financial transactions are gathering momentum with the launch of a pilot project between a blockchain startup and a Vermont city to use the digital ledger to record real estate deals.
Propy Inc., which last fall used a blockchain framework called Ethereum to purchase an apartment in Kiev, Ukraine, said last week it is collaborating with the South Burlington, Vt., on s prototype. The partners said blockchain technology will be used by the city clerk's office to record real estate conveyance documents.
Blockchain serves as a distributed ledger framework that posts transactions in real-time as cryptographically unique “blocks,” visible to authorized users. These blocks cannot be reversed or changed, with new additions to the ledger posted on top of the register of existing transactions.
The agreement between state and local officials and the startup based in Palo Alto, Calif., is among the first government projects designed to use crypto-currency technology in property transactions. Propy touted the deal this week as "paving the way to further government involvement."
The pilot project will seek to demonstrate blockchain's data integrity as well as efficiencies and savings in recording property transfers. "The City of South Burlington is always interested in taking advantage of technology that enhances its delivery of services to residents," said Donna Kinville, city clerk of South Burlington.
"We are fortunate to have a cutting edge statutory framework that enables the use of blockchain technology," added Michael Schirling, head of Vermont's Agency of Commerce and Community Development.
The South Burlington pilot project also includes a local law firm focused on using blockchain technology to promote commercial real estate development.
Propy used Ethereum blockchain technology last year to purchase a $60,000 apartment in Kiev, Ukraine, for TechCrunch founder Michael Arrington, an early backer of the startup. Propy, which also serves as a decentralized property title registry, said the transaction was settled using "smart contracts" along with Ethereum crypto-currency and the startup's tokens.
It also claimed the apartment purchase was "the first real asset transfer via blockchain…."
The pilot project in Vermont illustrates how blockchain technology is advancing in markets like real estate and finance. Market analysts are bullish about the prospects for blockchain. Gartner Inc. (NYSE: IT) predicted last year that blockchain "business value" would soar to $176 billion by 2025 and exceed $3 trillion by 2030.
Meanwhile, Juniper Research reported last year that 57 percent of large companies it polled said they are deploying or "actively considering" blockchain technology. Of those in the prototype phase, two-thirds said they expect the digital ledger technology to be integrated into their operations by the end of 2018.
While Propy uses the Ethereum framework, a competing open transaction framework spearheaded by the Linux Foundation called Hyperledger is seeking to create a "standard blockchain fabric" that would host member's platforms.