Of all the early purposes envisioned for blockchain, one of the most intuitive is land registry and notary work. And of all the countries in the world to try the blockchain platform, few are a better testing-ground than Brazil. Land registration in Brazil happens through a system that is as unusual and complicated as it is inefficient. Here, semi-autarchies, known as cartórios, or public notary offices, exclusively handle a selection of tasks including:
- land registration;
- land purchase, rental and sale;
- validation of business contracts and their future verification;
- authentication of documents attesting to civil status – like marriage, birth, divorce, death;
- legal emancipation of minors;
- validation of power of attorney.
The work of public notaries is bureaucratic and clunky, but the complications arising from the system go further. Because the notaries are often region-dependent (there are about 13,000 throughout Brazil), information doesn’t move seamlessly among them, quite the opposite – rarely will one notary office have all documents pertaining to a specific person, and verification of data requires travelling and manual searches. Information is not integrated, and the task of checking encumbrances is arduous and uncertain. Enter the 2017/2018 ground-breaking study in Brazil’s southernmost state, Rio Grande do Sul, where land registration in the municipality of Pelotas was done on the electronic ledger of blockchain. Under the supervision of Delaware-based company Ubitquity, the University of British Columbia paired with a local real estate notary service for impressive results.
The local notary office signed a contract with Ubitquity, looking to a bigger deal in the future. If the study is considered successful enough, the blockchain software developed by Ubitquity will be sold to other towns and cartórios, helping them replace paper with decentralised blockchain data that is uniquely hard to forge, manipulate or delete, and easily accessed by anyone on the network.
Every election, the topic of public notary offices is put up for debate; most proposals focus on their gradual elimination. Fees charged by cartórios are high, and the work is essentially clerical and mechanical, demanding little deliberation and discretionary decisions from the humans involved. It is estimated that over 50 million Brazilians do not have the necessary papers and registrations to prove ownership of their property and Blockchain can play a pivotal role in addressing this very serious issue. Public notaries are widely disliked. Until recently, they were a type of fiefdom with government concessions granted to a few families that often managed to keep their privileges even after the death of the family member who signed the concession agreement. Today, new heads of public notaries must take part in a national exam and must have a law degree, but their salaries are often exceedingly high and unjustified, and they help raise fees that are already considered high enough. The purchase of an apartment, for example, can end up 10% more costly after adding notary fees.
The Pelotas study went from August 2017 to January 2018, but the conclusions are not conclusive because while the archiving part of the system was easily done on blockchain, the verification of each document requires steps that are not yet in place. But things are moving fast in the validation market in Brazil, and even those missing parts may soon become obsolete or may be offered by local companies. OriginalMy, another pioneering local firm, may contribute to the replacement of cartórios by offering digital verification mechanisms. Launched in 2015, OriginalMy promises to “change the way authenticity is handled in Brazil and the world” through the verification of “the authenticity of digital documents, contracts and identity of people.” It will also allow for website login verification and the signing of documents through its application.
In August 2018, the company hit the headlines for having helped in the registration of a “bitcoin baby”, Maria Julia – a girl whose birth was registered by her father on the blockchain platform Decred. Edson Neto, the girl’s father, managed to register her birth without leaving the house. This landmark was not merely symbolic – Neto got to do it on a Friday after the public notary was already closed, without needing to wait until it opened on Monday. Maria Julia wasn’t the first baby registered on blockchain in Brazil, though. The economist Fernando Ulrich registered his child in 2016, but the birth later had to be validated by a public notary office regardless, so Ulrich still had to walk to a brick-and-mortar place for the task.