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This article gives you an introduction to smart properties, how these custom blockchain solutions work, and more.
Smart Property
A smart property is an extension of a smart contract that has a smart interrelation with the objects. In simple words, a smart property is the ownership of a person over a property or an object that a blockchain network manages and controls.
Embedding technology in a physical object is not a new idea. For example, IoT (Internet of Things) refers to objects with sensors and links to other objects that have been collecting information and transmitting data.
A tangible or intangible object like a car, phone, AC, or shares of a company can be turned into blockchain-enabled assets.
By making the property smart, it can reduce fraud, mediation fees, and situations such as bankruptcy. Plus, it would increase trust and efficiency.
One can register the information related to any asset on the blockchain along with the details of people owning an object (physical or non-physical). Smart keys could then be used to facilitate ownership rights. The blockchain network checks authentication by using an ownership key.
Take, for instance, you may be able to access and use a car if you had the right smart key stored on your phone. The same is applicable to a smart house.
People can exchange these keys and blockchain can verify these exchanges. So, blockchain serves as a decentralized ledger for recording and managing property rights.
Explore: Smart Contracts on Blockchain | Real Examples and Platforms
Role of Blockchain in Smart Property Development
Blockchain can help in a way how we think of ownership and transact values or assets. It gives two keys of ownership proof.
Your car will be a smart property under the blockchain network if it has two keys of proof to validate its ownership. One is the manufacturer key and the other is the ownership key.
Blockchain needs authentication using an ownership key. The blockchain network would record all phases of a car from manufacturing to its buyer.
Additionally, the manufacturer will provide a digital certificate for the car along with an identification key. Blockchain will use this certificate for proving the existence, mileage, and age of a car to any third-party organization.
Thus, blockchain can turn your property into a smart one where two persons can reach an agreement remotely over any communication network. And, one can publicly verify this agreement.
Check Out: Intellectual Property Rights Management with Blockchain
Blockchain Processes during Car Selling
The following processes occur under the blockchain when selling a car to any buyer:
- A buyer will generate a random number and requests the seller to send all the details of the car.
- Now, the seller will give the car a random number and will send an identification key with the information about the car.
- The data consists of the random number, the public key of the current owner, car data, and the location of ownership transfer.
- Then, the seller chooses a key (1st key) to receive the payment and quotes the price of the vehicle as P.
- The buyer creates a new ownership key (2nd key). The buyer creates a transaction with 2 inputs and outputs.
- Both buyer and seller will wait for the confirmation.
- The buyer shows the vehicle with a cryptocurrency transaction and links it to the blockchain.
- Lastly, the technology updates the ownership information in its ledger and stores enough data.
This whole activity allows a smartphone to verify a vehicle’s ownership. It can also be utilized to give a digital ignition key which will protect the automobile from theft.
This is how smart property uses blockchain for managing property rights. One can also use smart contracts for a rental agreement for an apartment or home.
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Conclusion
In a nutshell, the use of the smart property and programming it according to one’s custom conditions to access it could give rise to new types of decision-making, group governance, and rule administration.
If you are interested in developing a blockchain-enabled smart property, then speak with our blockchain experts.
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