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  • Writer's pictureHaim Sandberg

Why Blockchain Technology Will Never Replace The Land Registry Office

Updated: Jul 29, 2021


Start-up companies, technology aficionado forums, and pilots carried out in various countries have in recent years examined the possibility of applying a new technology, Blockchain, to implement a far-reaching, innovative idea in land law: the creation of a decentralized autonomous land registration system not dependent on any authority or primary entity.[1] Is this kind of technology really the right answer to the deficiencies in the field of land registration? In this short essay I argue that the idea that the real estate market will become an autonomous decentralized marketplace in which anyone intending to join the block network has the exclusive capacity to perform transactions, without any external intervention, appears, prima facie, to run counter to the basic characteristics of every real estate market. Without adopting this idea, the use of Blockchain does not embody any extraordinary innovation. Though it has several other technological advantages pertaining to the information it stores, most of these advantages can also be achieved through alternative channels in the existing registration systems. Whereas the advantages are questionable, the use of Blockchain in this field has marked disadvantages that do not exist in other systems.

In Part I shall first explain the characteristics of the technology, and the currently-proposed manner of applying it to land registration. In Part II I shall present the changes that such an application may bring to real estate market and the uncertainties that arise around their feasibility and viability. In Part III I will analyze the unique risks and disadvantages that the use of Blockchain may bring to land registration systems. Finally, I will conclude my argument that the blockchain is not suitable to replace the existing methods of land registration.

I. Blockchain-The Technological Innovation

The Blockchain system is an open source-based digital technology that enables the transfer of encrypted digital data (blocks) from one computer to another (peer to peer), and allows the receiving computer, in turn, to transfer the data block to other computers (smart contract), thereby creating a chain of block transfers (blockchain). Each block, starting with the first (Genesis) is sealed and encrypted with a unique, immutable code (hash). The data formed in this chain of interlinked transfers is stored on all the computers connected to the network (nodes) and a sophisticated algorithm generates a mechanism for the confirmation and agreement of all the network-linked computers, preventing alteration of the data transferred in the block, and precluding its transfer by anyone other than the owner of the block. In this way, movements made in the block are immune to change or forgery, and the blocks can be transferred only by the entity to whom the block was sent in a legitimate transfer chain. The information in the transfer chain is stored on all the network-linked computers without the intervention of any central authority. The reliability of the data and the speed of the network’s operation depend on the computing power of its computers and increase in accordance with the level of computing power in the network. The operation of this mechanism is assured through a system called mining, whereby entities that add computing power to the network are rewarded through its operational algorithm with more blocks or block-parts. The computer network that documents the block transactions becomes a reliable ledger of the blocks and their movements. The whole network is a reliable, autonomous register of the blocks’ movements, distributed across all the members of the network and revealed to all—a distributed ledger.[2]

Each block transferred on the blockchain network can represent a particular unit – a coin, token or physical asset. The network’s members may agree that the transfer of each block should be deemed the transfer of one such unit, and this will be reflected in the network’s programs and in the consent of its members. In this way, a network based on a chain of blocks programmed to reflect a specific asset can constitute a ledger of movements, transactions and property rights to this asset.[3] The notion of transferring rights to physical assets by way of registration in a ledger is not a new idea,[4] and therefore, the transition to a system in which ownership rights in a physical asset find virtual expression in a digital block is not, in itself, such a novelty.[5] The significant innovation inherent in the use of Blockchain technology for the registration of rights to assets is the autonomous nature of the network. The technological advantages it offers, such as the transparency of the network and the information’s immunity to revision or forgery, are not contingent on the existence of some presiding authority but attained autonomously by the network’s working mechanism which is distributed across many independent computers. All that is required for the establishment of this network is the consent of the participants to join, and a sufficient number of participating computers to ensure the working mechanism. The utopic vision of Blockchain enthusiasts is to create universal and autonomous public ledgers that do not require trust clerks and agents to manage them (a trustless public ledger).[6]

The ideas for application of this technology elicit considerable hype among innovation aficionados.[7] Hundreds of patent requests for these applications are submitted globally.[8] The use of Blockchain for registration of asset transfers is already familiar in areas where the consent of the network participants is sufficient for legal recognition of the validity of the transfers. The Blockchain system is at the basis of digital currency commerce.[9] Blockchain networks are now used for supply chain management, as well as commerce with merchandise and chattels including medicine,[10] diamonds,[11] and artwork.[12] There are also active Blockchain applications for copyright commerce[13] and for the issuance of bills of lading.[14]

That said, the adoption of the Blockchain system for the registration of property rights and transactions in land already documented in a land record or land register does not depend solely on the consent or desire of the asset holders. If, at present, it is legally required that the transfer of property rights in land be registered in a public registry as opposed to the Blockchain network, there will be no legal validity to the consent of asset holders for their property rights in the asset to be transferred via the decentralized Blockchain network rather than the public registry.[15] Thus, the voluntary use of Blockchain for land registration cannot evolve naturally as did commerce in cryptocurrency or in other physical assets for which there are no public registries. It requires a conscious decision of legislators to replace the currently existing land registration system with the decentralized Blockchain system and confer legal validity to registration in the latter.[16]

II. The Legal Innovation-The Doubts

The primary legal innovation that the Blockchain system can bring to the registration of real estate rights is autonomy and decentralization. This innovation holds many potential risks, some of which are familiar from other areas of Blockchain use.[17] The idea that the real estate market will become a decentralized, possibly global, marketplace in which anyone intending to join the block network has the exclusive capacity to perform transactions, without any external intervention, appears, prima facie, to run counter to the basic characteristics of every real estate market. At present, real estate registration constitutes a means for authorities to oversee transactions or restrict them for various public reasons not limited solely to the desire to uphold the reliability of the transactions and registry. For example, some countries seek to supervise transactions with foreigners,[18] or prevent attempts at land grabbing.[19] Planning and construction laws regulate land use and impose coercive restrictions on the creation of land units and the carrying out of transactions therewith. Planning information regarding these restrictions is entered in the registry, influences the design of transactions and registration units, and constitutes an integral part of the content thereof.[20] The register records a series of additional involuntary actions forced upon holders of real rights by state authorities, courts or other judicial entities, including encumbrance imposition, property taxation, asset forfeiture, asset expropriation for public use, and judicial orders to undertake registration activities in accordance with contracts signed or on the grounds of a violation thereof.[21] The decentralization of the Blockchain system, at its technological optimum, renders the block holder the exclusive authority to decide to transfer the block, and the network renders this authority impervious to external intervention. This immunity subverts all the coercive authorities currently involved in the registration. Conversely, were the system to be planned, assuming at this stage that this is feasible, in a manner that eliminates the absolute liberty of the block holder to transfer the block, this retraction of liberty would impinge on the main advantage offered by the immutability of the system from public control.[22]

Without adopting the idea of decentralized autonomy, the use of Blockchain does not embody any extraordinary innovation. Though the Blockchain system has several other technological advantages pertaining to the information it stores, most of these advantages can be achieved through alternative channels in the existing registration systems. First, registration by Blockchain can be public and transparent to all network participants.[23] The existing registration systems have already developed this same feature,[24] although current registers do not reveal to everyone all transactions made in a given country, but only the map of rights in the specific unit in which a person expressed interest. The digital data is controlled by the authorities, and its security is in their hands. In contrast, in the Blockchain system, each block and each transaction can be viewed by anyone, gratuitously, and in an electronic format that enables the collection and processing of digital information. The system exposes all this "big data" for all to see. This may constitute over-transparency, potentially susceptible to abuse. Though there have been proposals for “private” versions of Blockchain, their implementation undermines the notion of autonomous decentralization, which as stated, is the system’s chief innovation.[25]

Second, the information in the Blockchain is well backed-up as it is saved at every node. If one node, or even several, are compromised, this will not harm the data, which will be kept in full in all the remaining nodes. Conversely, the information in the current registries is stored on one server, or at most, on several central servers. Any compromise thereof can severely infringe on the database.[26] The risk of such a compromise is not common, and can probably be solved with simpler, though perhaps not risk-free, backup solutions such as government clouds.[27]

Third, the data in the Blockchain is highly resistant to counterfeit due to its verification system, based on a complex algorithm, to which all the network nodes connect. The weight of one node, and even several nodes, attempting to transmit erroneous data to the network will not suffice, as long as the rest of the nodes do not verify the erroneous information. The information items in a locked block cannot be altered; this includes the time of the transaction and the details of the entity that performed it.[28] In regular electronic systems, what guarantees the reliability of the information is that it is managed by a central authority trusted not to manipulate the data it holds. The risk of registration clerks manipulating information registered in the land register does exist, but it does not seem to be a significant weakness of the existing land registration system.[29] Moreover, Blockchain does not supplant the need to examine the reliability of the information streamed thereto. It examines the reliability only of the changes made to the information registered in it, and consequently does not profess to constitute a replacement for the existing inspection mechanisms that examine the identity, legitimacy, and legal validity of transactions generally performed by attorneys, notaries and registration clerks.[30]

Fourth, if thus programmed from the start, the Blockchain system allows blocks to be split into non-specific sub-units and transferred, in a decentralized manner, to multiple transferees. For example, a bitcoin block can be split and divided among multiple customers at varying values. Such a division enables the mass issuance of blocks to the public, already an accepted practice in the issuance of cryptographic currency (ICO – Initial Coin Offering).[31] In the real estate sector as well, the use of Blockchain can allow electronic real estate blocks to be divided into parts and sub-parts, opening the way for crowd investment in land purchases, and in funding activity on land. There already exist Blockchain platforms that enable the crowd funding of projects in the real estate sector, but they do not enable the division of rights registered in the land registries, such as title or mortgage rights to land, but only contractual rights vis-à-vis other entities registered as owners.[32] The goals of such a division are already achievable through familiar mediums such as the establishment of a company or trust, registering mortgages of varying degrees, and the splitting of a registered property title into parts between co-owners. It is difficult to see added value in the proposition of splitting registered property rights into a multitude of sub-parts through Blockchain. Moreover, such a division would cause more harm than good as it would lead to problems of coordination and collective action and would render the land more difficult to use.[33]

III. Unique Disadvantages

Whereas the advantages of Blockchain, as compared to the existing registration methods, are questionable, the Blockchain has marked disadvantages that do not exist in other systems. First, the real estate units, the blocks, can be designed only in advance, when the first block is delineated. Once a block, or a transaction made therewith, has been sealed, no changes can be made to it post factum. This characteristic stands at odds with the lifespan of real rights and creates difficulties which the Blockchain may be incapable of handling. For example, various types of rights, such as rentals, mortgages and easements, form over the lifespan of a real estate unit, and not necessarily on its inception. Creating in advance an immutable block for all the rights that may ever form in connection with the asset as well as the full gamut of transactions that may be performed with these rights appears, prima facie, complex, and its efficacy seems questionable.[34] Moreover, the uses of the assets and the structure of the registration units evolve over time, and land registration should reflect these changes. The planning authorities occasionally seek to revise the boundaries of land units, consolidate them or divide them. Such revisions may stem from the desire of the parties to divide or alter the asset, but it may also be the upshot of forced planning or expropriation. Such proceedings are subject as well to the surveying of the borders. The reality is that a legitimate need will often arise to rescind a transaction performed in the block due to an error, revisions of a contract, or a breach of contract. It is unclear how the Blockchain system will enable such changes pursuant to the sealing of the blocks. The immutability of the block is one of the system’s advantages designed to prevent undesired, fraudulent changes, yet it may undermine the crucial need to make desired changes.[35]

The technological solutions to this problem focus on preprogramming options for change that will enable specific entities to alter blocks.[36] Even if we were to assume that such a solution is technologically feasible, which is by no means certain, it is questionable whether every possible change to block content which may be required at some future time can be foreseen in advance. Furthermore, reprogramming the blocks to enable such patterns of change may compromise the reliability of the system, as it will necessarily infringe on the block-holder’s monopoly, and on the immutability of the block and the transactions in which it participates. This may open the way for undesired changes, thereby undermining one of the key advantages of the Blockchain’s work method.

Second, the Blockchain system is afflicted with general problems that plague electronic information systems. For example, the problem with self-identification upon entry to the system may lead to deception. Though this is a problem that afflicts digital registration systems as well, these systems screen the users and allow entry only to attorneys or other authorized entities.[37] Such a solution undermines the decentralized, autonomous nature of the Blockchain network. Moreover, the block-holder’s monopoly on the possibility of taking action within a block (a monopoly based on entry passwords) may also cause difficulties when the block-holder is unable to personally take action, such as on his demise, when his rights are bequeathed to his heirs, or if he becomes legally incompetent and requires the appointment of a guardian. The undesirable result in instances when the system cannot be penetrated is that these blocks remain frozen and end up being removed from the land market cycle. An unused Google account is not a real estate block. It is unclear whether there is a technological solution to this problem, but should there be such, it would likely render the block accessible to entities other than its owner, or to a central authority. This may prove a breach that infringes on the fundamental innovation of the Blockchain.[38]

Third, the Blockchain system holds potential new technological risks unknown in the existing systems. This network may become the victim of unique malicious attacks capable of disrupting its working mechanism, such as a disruption of the distributed confirmation algorithm through seizure of control of more than 51% of the network’s computing power (51% attack).[39] This is a technological system that is naturally exposed to all and not under governmental control; it is therefore more susceptible to malicious attacks of the sort which have already occurred in the history of the bitcoin system.[40] Moreover, the Blockchain’s distributed confirmation mechanism is based on the principle that participants that add computing power to the network receive some form of remuneration. In the bitcoin system, this remuneration is called “mining”. Yet in the existing registration systems, incentives of this sort are unknown, nor is it clear how “miners” can possibly be remunerated with real estate rights out of nowhere. The Blockchain system requires heightened computing power and electricity consumption, and consequently, a distributed computer mechanism is generally slower than a centralized mechanism.[41] If this is not supplied by computers distributed over multiple stations, it is reasonable to assume that it will be supplied by a governmental authority, thereby once again infringing on the fundamental innovation of this method – the autonomy of the system.[42]

Forth, the Blockchain system’s method of operation does not seem aligned with legal regulations that do not necessarily need to be changed, and which may not even be adaptable to the Blockchain’s operation. For instance, when someone performs conflicting transactions in a block, the Blockchain will give priority to one of them based on random, computational calculations, whereas the existing legal systems weigh up considerations like the timing between the transactions, good faith, value, and other considerations of justice.[43] The Blockchain does not require any initial registration in the system, whereas initial registration in a regular registry entails inquiries to ensure that the initial registration is correct.[44] Blockchain does not examine a transaction’s legal legitimacy, nor does it include a mechanism of liability for errors or problems.[45]

Finally, the methods of electronic registration that currently exist already boast high levels of reliability, without the Blockchain system’s pitfalls. Even if Blockchain has some relative advantage, the shift from one system to another involves technological transition costs that may offset the potential advantage of the shift.[46] The fact that good alternatives to Blockchain exist challenges the logic of adopting a riskier technology with many drawbacks and unknowns. Most of the attempts made thus far to examine the Blockchain system have been in countries where the existing land registration system was problematic (such as Ghana, Honduras, Brazil, Georgia, and Ukraine).[47] The system was also tested in the US (for instance, in Cook County and in Vermont)[48] but so far, every country to have tested it, including Sweden, has left it in pilot-mode, and has not yet adopted it as a comprehensive, broad-scope substitute for its existing real estate registration system.[49] Pursuant to the experienced gained, what is being voiced today are considerably more modest propositions to incorporate the Blockchain system into the existing registration systems for control purposes, not to replace them.[50]


The Blockchain system seems to constitute a mere technological modification of an existing legal tool - the registration of property rights to land. It promises a technological enhancements of transaction reliability but as a matter of fact it is no more than an implementation with different tools, though not necessarily better ones, of the principles that guided Torrens as far back as a hundred and sixty years ago. Indeed, the innovation of an autonomous decentralized registry – which goes so far as to abolish public control – stands out in its novelty. To the extent that technology enables the implementation of this idea, it may drastically change the real estate market and land laws. Such change would be intensely innovative, and it is therefore no surprise that innovation enthusiasts bask in its virtues.[51] Yet, many of the studies that have examined in depth the adoption of Blockchain for land registration share a cautious skepticism regarding the technology’s adaptation to this field.[52] The root of the preoccupation with this technology lies not in the desire to solve a real-world problem or difficulty, but in the very existence of the technology. It seems that in this case the good public relations that technological innovation enjoys promote the incorporation of blockchain into a field that does not really fit the virtues of blockchain.The mere existence of technology, innovative as it may be, does not in itself justify undermining any public intervention in the real estate market.

[1] Rosa M. Garcia-Teruel, Legal Challenges and Opportunities of Blockchain Technology in the Real Estate Sector, 12 Journal of Property, Planning and Environmental Law 129, 130 (2020). [2] Avi Spielman, Blockchain: Digitally rebuilding the real estate industry 31-34, 37-40 (MSRED Diss. MIT 2016); Jacques Vos, Blockchain-based Land Registry: Panacea, Illusion or Something in Between? Legal Interference of Registrars in the E-conveyancing Process, European Land Registry Association (ELRA) 7th Annual Publication, 4-7 (2017),; Joshua A.T. Fairfield, Bitproperty, 88 S.C. L. Rev. 805, 821-823 (2015); Marco Iansiti, Karim R. Lakhani, The Truth about Blockchain, 95 Harv. Bus. Rev. 118, 125 (2017). [3] Spielman, supra note 2, at 43-44; Fairfield, supra note 2, at 825-828. [4] Frederick B. McCall, The Torrens System – After Thirty-Five Years 10 N.C. L. Rev. 330, 330 (1932); Robert T. J. Stein & Margaret A. Stone, Torrens Title 17-21 (Australia, 1991). [5] Fairfield, supra note 2, at 840-842. [6] Spielman, supra note 2, at 33, 43-44; Fairfield supra note 2, at 813-816. [7] Angela Walch, The Path of the Blockchain Lexicon, 36 Rev. Banking & Fin. L.713, 732-734, 753-754 (2017). [8] Gönenç Gürkaynak et al., Intellectual Property Law and Practice in the Blockchain Realm, 34 Computer Law & Security Review 847, 851 (2018). [9] Fairfield, supra note 2 at 814; Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System (31.10.2008), [10] Birgit Clark & Ruth Burstall, Blockchain, IP and the Pharma Industry – How Distributed Ledger Technologies can Help Secure the Pharma Supply Chain, 13 Journal of Intellectual Property Law & Practice 531, 532 (2018). [11] Aaron Ricadela, Blockchain Records are Forever in Opaque Diamond Market, Forbes July 12, 2019, [12] Scott Reyburn, Art is Becoming a Financial Product, and Blockchain is Making It Happen, The New York Times, June 8, 2018, [13] Gürkaynak, supra note 8 at 854. [14] Richard Milne, Shipping Groups Plot a Course for Digital Collaboration, Financial Times, November 15, 2018, [15] Gürkaynak, supra note 8 at 861-862. [16] John Mirkovitc, Blockchain pilot program-Final report 21-22 (Cook County Recorder of Deeds, Illinois, 30.5.2017),; Nicolás Nogueroles Peiró, Eduardo J. Martinez García, Blockchain and Land Registration Systems, 6 EPLJ 296, 314 (2017) [17] Fairfield, supra note 2, at 831-838. [18] Joshua Weisman, Restrictions on the Acquisition of Land by Aliens, 28 Am. J. of Comp. Law 39, 65-66 (1980). [19] Amnon Lehavi, Land Law in the Age of Globalization and Land Grabbing, Comparative property law: global perspectives 290, 290-294 (Michele Graziadei & Lionel Smith eds., 2017). [20] Standard City Planning Enabling Act §8, 13, 14, 17, 21 (U.S. Dept. of Commerce, 1928) [21] Robert N. Cook, Land Law Reform: A Modern Computerized System of Land Records, 38 U. Cin. L. Rev. 385, 387-389 (viewing the registry’s digitization as a tool to boost coordination between the various public entities that the land record serves). [22] Oleksii Konashevych, Constraints and Benefits of the Blockchain Use for Real Estate and Property Rights, 12 Journal of Property, Planning and Environmental Law 109, 116 (2020). [23] Spielman, supra note 2, at 35; Mirkovitc, supra note 16, at 22; Garry Gabison, Policy Considerations for the Blockchain Technology Public and Private Applications, 19 SMU Science and Technology Law 327, 345-347 (2016). [24] Several examples: (Massachusetts Land Records); (UK Land Registry’s Guidance on Register Extract Service); (Israel’s Land Registry extracts). [25] Peiró & García, supra note 16, at 311. [26] Spielman, supra note 2, at 42; Gabison, supra note 23 at 345. [27] Scott Paquette et al, Identifying the Security Risks Associated with Governmental use of Cloud Computing, 27 Government Information Quarterly 245, 247 - 251 (2010) (analyzing the government policy for the use of cloud computing and the risks inherent therein). [28] Gabison, supra note 23, at 344. [29] J. David Stanfield et al., Land Registration and Land Fraud in the United States 3-6 (Paper presented to the Seminar on Risk Reduction in Land Fraud, 21 October 2008), (In the list enumerating the types of fraud in land registration, registration clerk fraud does not appear). [30] Peiró & García, supra note 16, at 308; Garcia-Teruel, supra note 1, at 10. [31] Karen Yeung, Regulation by Blockchain: The Emerging Battle for Supremacy between the Code of Law and Code as Law, 82 Modern L. Rev. 207, 226-228 (2019). [32] Rohan Mark Bennett et al., Transformations, Transitions, or Tall Tales? A Global Review of the Uptake And Impact Of Nosql, Blockchain, And Big Data Analytics on the Land Administration Sector, 83 Land Use Policy 435, 441-442 (2019); Raymond L Tran, Portable Reciprocity: A Way Towards a Blockchain Agnostic World to Facilitate Cross-Border Real Estate Transactions, 53 Real Prop. Tr. & Est. L.J. 447, 466 – 471 (2018). [33] Matthias Lehmann, Global Rules for a Global Market Place? – The Regulation and Supervision of FinTech Providers, 38 B. U. Int’l L.J 118, 132 (2020) (Collective action problems as an obstacle to self-regulation of FinTech providers). [34] Garcia-Teruel, supra note 1, at 11-12. [35] Gabison, supra note 23, at 344. [36] Garcia-Teruel, supra note 1, at 12-13. [37] Haim Sandberg, Real Estate E-conveyancing: Vision and Risks, 19 Information & Communications Technology Law 101, 104-106 (2010); Australian Registrars National Electronic Conveyancing Council (ARNECC), Model Participation Rules 13-15, 43-46 (December 2018),; Service Ontario, Guide for the Application for authorization to submit documents for registration in the Electronic Land Registration System (August 2013),; The Authority for Land Registration and Regulation, “Digital Services” (Hebrew) [38] Spielman, supra note 2 at 37, Garcia-Teruel, supra note 1 at 8-10. [39] Victoria L. Lemieux, Evaluating the Use of Blockchain in Land Transactions: An Archival Science Perspective, 6 EPLJ 1, 35-37 (2017). [40] Emily Crane, Regulation Without Deflation: Cryptocurrency and its Insider Trading Conundrum, 51 J. Marshall L. Rev. 797, 804 (2018); Lawrence Trautman, Virtual Currencies Bitcoin & What Now After Liberty Reserve, Silk Road, and Mt. Gox?, 20 Rich. J. L. & Tech. 1, 100-101(2014). [41] Spielman, supra note 2, at 36, 41. [42] Spielman, supra note 2, at 35-36; Garcia-Teruel, supra note 1, at 8; Gabison, supra note 23, at 340, 343. [43] Peiró & García, supra note 16, at 303-305, 310. [44] Id. at 306-307. [45] Id. at 307-309, 313. [46] Spielman, supra note 2, at 48-49. [47] Konashevych, supra note 22, at 123-124; Peiró & García, supra note 16, at 316-318; Lemieux, supra note 39, at 6-19; Ingo Keilitz, Troy Wiipongwii, Blockchain and International Development: Can Blockchain Technology Be the Solution to Effective Land Registration Systems in Developing Nations, 9 Wm. & Mary Pol’y Rev. 52, 54-58 (2017)‏. [48] Mirkovitc, supra note 16, at 47; Vermont State Archives and Records Administration, Blockchains for Public Recordkeeping & for Recording Land Records 34-41(January 15, 2020), [49] See sources, supra note 47-48. [50] Christiaan Lemmen, Jacques Vos and Bert Beentjes, Ongoing Development of Land Administration Standards Blockchain in Transaction Management, 6 ELPJ 478, 495-497 (2017). [51] Walch, supra note 7. [52] Gabison, supra note 23, at 345; Garcia-Teruel, supra note 1, at 13-15; Spielman, supra note 2, at 60; Peiró & García, supra note 16, at 319; Lemieux, supra note 39, at 48-49.

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