Sweden’s land registration authority, Lantmäteriet, is well into testing a private blockchain system that will improve the function of land property management. This project was launched in July of 2016 when a technical demonstration and proof of concept was established. Phase 2 of the project was completed in March of 2017, notably incorporating operational smart contracts (also referred to as embedded contracts) to facilitate transactions.

Prior to implementation, real estate transactions in Sweden could take anywhere from six to nine months. This system eliminates or improves over 80% of the 33 steps required for a real estate transaction, significantly shortening the process, saving time, and reducing the possibility of human errors in a number of workflows. Bringing value to the work streams of registry management, documentation, reducing fraud, and boosting efficiency, this novel blockchain implementation is expected to save taxpayers $106 million (USD) per year, as estimated by Kairos Future, the consulting firm managing this program.

The system’s core technology is managed by ChromaWay, a pioneer in blockchain technology. Credibility and adoption for this blockchain-based property management system is accelerated by including key stakeholders that will eventually be required to utilize the system. For this reason, Sweden’s SBAB Bank and Landshypotek Bank are playing some role in the project. To manage system access, Telia’s secure ID is used to verify “rights to act in the system.”

Subject to public accountability and oversight, public sector entities, not businesses, should hold the keys to any system in order to establish trust and integrity. As a trusted regulatory agency, Lantmäteriet manages this system’s private blockchain on which the agency “guarantees the interpretation of the codes in the blockchain, such as the respective property, and owner.”

The technology behind this system is impressive. ChromaWay's blockchain offering is composed of two products, Esplix and Postchain. Esplix is a “smart workflow middleware which enables processes and workflows to be described using code and then enforced by the participants in the system.” This essentially represents the embedded contracts that facilitate the real estate transaction. Postchain is described as a “consortium database [that offers] the redundancy of a replicated data store, resistance to ‘natural’ faults, and the ability to tolerate outright malicious actions by consortium members. It puts true Byzantine Fault Tolerant technology into corporate IT systems and allows businesses to cooperate at scale.” Since blockchain inherently requires system-wide consensus to verify blocks, Byzantine failure is a very important issue in this space – and a key security concern. It’s good to know that this project is proactively integrating Byzantine fault tolerance measures, surely raising confidence in the stability of the system.

Lantmäteriet is expected to continue with phase 3 of the project, integrating more public agencies into the system. Because of the large number of entities involved, and Swedish laws requiring hardcopy signatures for real estate transactions, complete implementation is expected between 2019 and 2020. Once the system is fully implemented, the process is expected to be reduced to just a few days – a huge improvement from the 225-day average.

• Kairos Future paper: “Land Registry in the blockchain”
• ChromaWay information on Esplix and Postchain
• Quartz article on the project by Joon Ian Wong
• Coindesk article on the project by Jonathan Keane
• Wikipedia article on Byzantine Fault Tolerance