Smart property is the extension of a smart contract. It is that extension which 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 is managed and controlled via a Blockchain network. Embedding technology in a physical object is not a new idea. For example, the Internet of Things refers to the objects that have sensors and link to other objects and have been collecting information and transmitting data. A tangible or intangible object like a car, phone, AC, shares of a company can be turned into Blockchain-enabled assets. By making the property smart, it can reduce fraud and mediation fees and situations such as bankruptcy. Plus, it would increase the trust and efficiency.
The information related to any asset can be registered on the blockchain along with the details of people owning a physical or non-physical object at present. 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 for a smart-house. Using blockchain, these keys can then be exchanged and the exchanges can be verified. So, Blockchain serves as a decentralised ledger for recording and managing property rights.
Blockchain can help in a way how we think of an ownership and transact values or assets. It gives 2 keys of ownership proof. Your car will be a smart property under the blockchain network if it has 2 keys of proof to validate its ownership. One is manufacturer key and other is ownership key. Now, it becomes clear that how many people own the vehicle. Blockchain needs authentication using an ownership key. The blockchain network would record all phases of a car from manufacturing to its buyer. The car would hold a digital certificate also that will be given by the manufacturer, along with an identification key. The purpose of this is to use it 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, this agreement can be publicly verified.
When a car is sold to any buyer, the process goes like this under the blockchain.
1. The buyer will generate a random number and requests the seller to send all the details of the car.
2. Now, the seller will give the car a random number and will send an identification key with the information of a car.
3. The data consists of the random number, the public key of the current owner, car data, and location of transfer of ownership.
4. After this, the seller chooses a key (Ist key) to receive the payment and names the price of the vehicle as P.
5. The buyer creates a new ownership key (2nd key). The buyer creates a transaction with 2 inputs and outputs.
6. Both buyer and seller will wait for the confirmation.
7. The buyer shows the vehicle with a Bitcoin transaction and links it to the blockchain.
8. Last, 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. Smart contracts are also the application of blockchain which can be used for a rental agreement for an apartment or home.
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.