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The times they are a-blockchain-ging: Blockchain is a data structure that records activity by time-segments, creating a track record of information that makes it easier to track down fraud. It can also serve as a distributed ledger system, sending information to a network of independent databases, which coordinate to validate transactions.

It is becoming increasingly difficult to ignore blockchain. Blockchain evangelists claim that this emergent technology is set to disrupt a growing list of industries, and real estate is near the top.

On February 21, 2018, the city of South Burlington, Vt., made history when it recorded a deed on a government-supported blockchain. The city's blockchain is considered "private" because the city controls who may access it. The recorded deed is identical to deeds recorded on Vermont's traditional system, but how the deed is stored has changed. Vermont is not alone in its curiosity.

On May 30, 2017, the Office of the Cook County Recorder of Deeds (the CCRD) in Illinois, one of the largest land record offices in the United States, published a final report on a pilot program to "test cross-compatibility between the client-server database model and [blockchain]...." (http://cookrecorder.corn/blockchain/ last accessed on April 23, 2018). The report justified initiating the pilot program by referring to block-chain's inherent "efficiency" and "security." As for adopting a blockchain system permanently, the CCRD stated that it was not ready to "go it alone" and cited a need for, among other things, greater input from the legal community.


Blockchain is an information storage structure or data structure. When a user participates in a transaction on blockchain, the activity is recorded on a digital ledger organized by time-segments or "blocks." Users enter information on a blockchain by "broadcasting." In practice, a user need only type information and press send. For example, Fred is a resident of South Burlington who wants to convey a deed to Mary. Fred and Mary go to the recording office and use a computer to "broadcast" the conveyance. The information is bundled with other information in a "block," and Fred and Mary head back to their cars.

Two things happen next. First, new information stops being recorded in Block 1. Second, Block 2 is created and accepts new information. Block 1 is next to Block 2, and Block 2 is next to Block 3--thus, blockchain.

When Block 1 stops receiving information, blockchain marks the block with a timestamp or hashstamp. A timestamp is a long string of characters that reflects information within the block. Accordingly, at any time, if data is changed within a block, the corresponding timestamp will reflect the alteration. Thus, timestamps act as digital fingerprints.

Blockchain is described as fraud resistant. There are two features that justify such a description, and make blockchain ideal for land recording.

First, the timestamp from Block 1 is always copied and included in Block 2. Alter the information within Block 1 and the timestamp for Block 2--and every subsequent block--changes.

Second, blockchain is a distributed ledger system--a network of independent databases that coordinate to validate transactions. Imagine a state with 50 recording offices that adopts a blockchain system. Each office hosts its own independent ledger, but every broadcast is sent to all 50 ledgers. Each host then chooses to accept and record broadcasts according to common protocols. No one ledger trumps, and no one ledger by itself is the official record. Importantly, each office has the ability to view other offices' records.

Picture a fraudster trying to manipulate a recording office's records. He or she could access a single recording office and change data stored on a previously timestamped block Such action, however, would alter every subsequent block. The other 49 offices would notice the 50th office's records had been altered, and they could coordinate to determine where the record had been changed.

Under the current system, manipulating land records is like robbing a house. Under a block-chain system, successfully altering land records for personal gain is like robbing every house in a city. This inherent fraud resistance is what makes places like the city of South Burlington and the CCRD entertain adopting blockchain for its recording system.


If New Hampshire were to convert its land recording system to blockchain, the state could have a single, coordinated system. South Burlington and Cook County both noted the security afforded by multiple, trusted parties storing decentralized ledgers.

However, blockchain is still an emergent technology and its applicability for real estate recordings is largely untested. Should blockchain prove to be both secure and cost-effective, then a conversion may become a real possibility. The times really are a-blockchain-ging.


Joseph Lavoie is an associate at Sulloway & Hollis, P.L.L. C. and serves clients on a wide range of litigation and corporate matters.
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Title Annotation:A CLOSER LOOK
Author:Lavoie, Joseph
Publication:New Hampshire Business Review
Date:Jul 27, 2018
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