Smart property is to deeds as Bitcoin is to money. In the same way that Bitcoin revolutionized the concept of currency, smart property revolutionizes the concept of ownership, removing the need for a central authority to say who owns what. Our system of ownership is just one in a growing line of things to be decentralized, but will inevitably be among the most important. The question is, how can we enforce such a system without the firepower backing modern courts?
For those of you still trying to grasp this idea, it’s helpful to remember that bitcoins are not actually things: Bitcoin is a decentralized system for deciding who has how much money, and bitcoins are the unit of measurement it uses–they reside nowhere except the imagination of Bitcoin’s users. Just like traditional ledgers of account, however, the blockchain can be adapted to track who has what assets and property. This is being done by Bitcoin “2.0” platforms like Mastercoin and Counterparty, and some platforms like Ethereum are building new blockchains altogether.
For some types of property, this might seem kind of simple: things like trademarks, copyrights and patents are no more physical by necessity than money is, in contrast to houses and land. The question is, how can we ensure that people will respect the blockchain’s authority? You can show up at my home with a blockchain claiming it belongs to you, but I’m not going to vacate the premises.
In reality, this is a misleading question because it applies equally to the judicial system–the American Supreme Court, for example, maintains no armed forces, and must simply hope that the Executive Branch (which the President leads) will respect its decisions. They usually do, but partially because they appoint the judges, and it’s good PR. When politics goes awry, however, the Constitution is occasionally ignored, which politicians as celebrated as Abraham Lincoln are guilty of doing.
To the same extent that other government branches enforce the rule of courts, however, there’s no reason they couldn’t enforce the rule of the blockchain. A stranger cannot move into your house because a court has verified a document stating that you own the property, which means that if you call the police, they will remove the stranger. The police are equally capable of enforcing a blockchain verified by nodes in a peer-to-peer network.
But what if we wanted to go a step farther and decentralize the enforcement system, as well? It would certainly be nice if we could obsolete the police. While it’s not yet possible for everything, it is increasingly possible for electronic items: a computer could be designed to respond only to its blockchain-designated owner, who could be given remote access. Users could be verified physically or remotely by anything from a simple pass-phrase to advanced biometrics; without a central authority and with full encryption, there’s less cause for concern about your personal data.
As technology advances and electronic integration becomes more widespread, these sorts of methods will become more feasible. Vehicles increase in processing power every year, to the point that autonomous cars for mainstream consumers are a serious topic. A “smart” car would not respond to the commands of a thief as designated by the rightful owner, and instead turn off or drive to the nearest detention center. A home with integrated air conditioning and electronic locks could be designed to behave similarly, and increasingly advanced automated security systems will add weight to the blockchain’s decisions.
In the far-off future, it’s conceivable that technological replacements could obsolete the police, too–maybe not Robocop, but a functional means of controlling lawbreakers. Thereafter, selling a house is as easy as exchanging altcoins: you can send a transaction yielding ownership of the property, and receive a Bitcoin transaction in return. Just like sending an email.