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I believe the promise of having an insurance contract publicly verified by a decentralised system is to reduce the inherent costs of the current regulated syste

by chucke 5y ago

I believe the promise of having an insurance contract publicly verified by a decentralised system is to reduce the inherent costs of the current regulated system. In my country,and I assume in most it's the same, in order for you to sign a buy contract for a house, there has to be a notary involved. The whole process costs a significant percentage of your already heavy purchase. A blockchain won't solve all the problems here, but it may cut a few middlemen. And it doesn't have to be on ethereum or bitcoin. The Estonian (or is it the Finnish?) Government already uses a blockchain for their digital id system.

grailed 5y ago
FWIW, I think a notary signature in the US costs like $4. If verification is the only problem that blockchain solves, it's not a very cost-effective solution.
- NiloCK 5y ago
  I recently paid ~$150 for an hour's worth of notary services in Canada while preparing a property sale. I guess I should have driven to Maine.
- anonymoushn 5y ago
  For me, a US notary signature currently involved a 2 month wait time at the US embassy. At the notary I used back in San Francisco, it cost $30, not including the cost of going there.
  - quickthrowman 5y ago
    You can go into any bank and get a document notarized for free or a few dollars.
    - anonymoushn 5y ago
      Thank! You seem really knowledgeable about the services provided by Japanese banks.
cuteboy19 5y ago
> The Estonian (or is it the Finnish?) Government already uses a blockchain for their digital id system. if the estonian government is operating and enforcing it, why do you even need the blockchain bit? just put the database onto mysql and and make a website for people to transfer ownership online
JackFr 5y ago
Mire important than a notary is title insurance. Title insurance is a form of insurance that protects lenders and homebuyers from financial loss from an improper title to a property, for instance someone selling you a property they don’t own. This is the kind of thing at first glance people say is made for the blockchain, but in reality the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible.
- acdha 5y ago
  > the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible. This is especially true when you learn about the nasty edge cases title insurance helps with. A lot of people trying to drum up buyers for their hashes talk like the value comes from recording the chain of transfers when you're really paying for things like handling cases where, say, a surveyor made a mistake in 1952 and now two landowners have legal ownership of overlapping properties or some mistake in probate three owners ago meant that someone has a claim on 10% of it.
- UncleMeat 5y ago
  Title Insurance is indeed a racket at this point. Their payouts are a tiny percentage of their overall premiums. As you mention, this seems like a good option but in fact isn't a good one. In order to replace title insurance and make it so anybody can verify the state of a property you need to first make all liens ever live on the blockchain. That's the hard part here. If it is possible to have a lien on a home without that appearing on a blockchain then there is still a need for somebody to review the title. Further, there is no need for decentralization! The state can simply operate a centralized append-only database where transactions are recorded and liens are created and publish that to everybody.
  - throw0101a 5y ago
    The average price of a house in Ontario, Canada is $922K: * https://wowa.ca/ontario-housing-market https://wowa.ca/ontario-housing-market When purchase through a lawyer, title insurance in Ontario is around $250: * https://www.getwhatyouwant.ca/what-the-heck-is-title-insurance https://www.getwhatyouwant.ca/what-the-heck-is-title-insuran... 250 / 922000 = 0.000271 or 0.03%. I've had bar tabs larger that $250.
UncleMeat 5y ago
The notary is a teeny-tiny portion of the expense in the homebuying process. And you'd still need a lawyer involved if your transaction involves mortgages (and likely you'd still want one anyway to construct the transaction). Putting deeds on the blockchain changes the homebuying process almost not at all. As for state IDs... why not just a centralized database with a public API? What does decentralization achieve for a system that is fundamentally centralized. Nobody can issue an ID except the government in this case.
- kikimora 5y ago
  The promise of blockchain is to eventually remove lawyers and all middleman. It can be done already with existing tech. I can easily imagine a smart contract managing property rights, another one managing mortgages, etc. And of course all that has a back door so a court order can rollback a transaction.
  - thinkmassive 5y ago
    > And of course all that has a back door so a court order can rollback a transaction. …so you still need a lawyer and nothing has actually changed?
    - kikimora 5y ago
      You got me, lawyers can stay :) But a bunch of clerks and middleman are out. Today the job of a middleman/clerk is to modify a centralized database in a regulated way. They got their licenses, exams, special education and so on. There is a government machinery behind every such database - agencies, controllers, educators, bookkeepers, etc. While you may be paying $4 for a notary signature you might be paying way more from your tax money to keep governing bodies running across the country. My point is statement that a centralized database is cheap because it is easy to modify simply ignores governance cost which might be huge.
  - cuteboy19 5y ago
    if we are trusting courts to have backdoors, does it not completely negate the purpose of blockchains, i.e. trustlessness if you trust the court, why not just have them store everything on some mysql database and execute all the ""smart"" contracts as regular java code? blockchains are necessarily orders of magnitude worse in terms of performance. why do you want to use an extremely slow linked list based DB?
jerf 5y ago
If home ownership was on a distributed blockchain, local regulators would rapidly discover a need for something like a notary to verify that the transaction has been done correctly on the correct blockchain by the people who actually own it, so as to ensure the consumer isn't sitting on the other side of the table with someone not bamboozling them about their ownership of the house, or bamboozling them about their transfer of ownership, or so and so forth. The notary would also validate that the transfer has successfully been completed on the blockchain respected by the local governing authorities, and has been filled out completely correctly. You might think this is silly, but fake selling of homes is actually thing that happens! I don't just mean that regulators would do it for gatekeeping purposes, I mean there would be a real need for this. In the bizarre circumstance that this move to the blockchain actually happened for home ownership, the HN gestalt would rapidly be screaming for legislation and regulation around blockchain changes. Which means, once again, that blockchain is solving a problem that doesn't exist here. The problem with home ownership and the problem notaries are solving was never that the authority was too centralized into the relevant governing bodies. That's the reason why after 11 years blockchain has exactly one use case, and even that one is dubiously solved IMHO. It brilliantly solves problems we don't actually have.
- chucke 5y ago
  I believe you're downplaying the potential here (and I'm overplaying it). A particular blockchain you could immediately verify home ownership online via some sort of signature with the public key from a seller seems like providing the same type of guarantees. Is it 100% safe? Certainly not. But considering your notary might be a fraud, a scammer or just not very good at what he does... Compare the example with withdrawing money: you can go to an ATM and withdraw money for no fee, depending of the country. Do it in the bank, there I an associated fee. The legal system would still have to adopt it though. And it's an industry less prone to digital innovation. And there is no financial incentive, as there is no narrow profit margin you need to optimize. So yes, it may never happen.

by chucke 5y ago

grailed 5y ago

FWIW, I think a notary signature in the US costs like $4. If verification is the only problem that blockchain solves, it's not a very cost-effective solution.

NiloCK 5y ago
I recently paid ~$150 for an hour's worth of notary services in Canada while preparing a property sale. I guess I should have driven to Maine.
anonymoushn 5y ago
For me, a US notary signature currently involved a 2 month wait time at the US embassy. At the notary I used back in San Francisco, it cost $30, not including the cost of going there.
- quickthrowman 5y ago
  You can go into any bank and get a document notarized for free or a few dollars.
  - anonymoushn 5y ago
    Thank! You seem really knowledgeable about the services provided by Japanese banks.

cuteboy19 5y ago

> The Estonian (or is it the Finnish?) Government already uses a blockchain for their digital id system. if the estonian government is operating and enforcing it, why do you even need the blockchain bit? just put the database onto mysql and and make a website for people to transfer ownership online

JackFr 5y ago

Mire important than a notary is title insurance. Title insurance is a form of insurance that protects lenders and homebuyers from financial loss from an improper title to a property, for instance someone selling you a property they don’t own. This is the kind of thing at first glance people say is made for the blockchain, but in reality the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible.

acdha 5y ago
> the incumbent solution is actually pretty reasonable and the actual gains from a new system are negligible. This is especially true when you learn about the nasty edge cases title insurance helps with. A lot of people trying to drum up buyers for their hashes talk like the value comes from recording the chain of transfers when you're really paying for things like handling cases where, say, a surveyor made a mistake in 1952 and now two landowners have legal ownership of overlapping properties or some mistake in probate three owners ago meant that someone has a claim on 10% of it.
UncleMeat 5y ago
Title Insurance is indeed a racket at this point. Their payouts are a tiny percentage of their overall premiums. As you mention, this seems like a good option but in fact isn't a good one. In order to replace title insurance and make it so anybody can verify the state of a property you need to first make all liens ever live on the blockchain. That's the hard part here. If it is possible to have a lien on a home without that appearing on a blockchain then there is still a need for somebody to review the title. Further, there is no need for decentralization! The state can simply operate a centralized append-only database where transactions are recorded and liens are created and publish that to everybody.
- throw0101a 5y ago
  The average price of a house in Ontario, Canada is $922K: * https://wowa.ca/ontario-housing-market https://wowa.ca/ontario-housing-market When purchase through a lawyer, title insurance in Ontario is around $250: * https://www.getwhatyouwant.ca/what-the-heck-is-title-insurance https://www.getwhatyouwant.ca/what-the-heck-is-title-insuran... 250 / 922000 = 0.000271 or 0.03%. I've had bar tabs larger that $250.

UncleMeat 5y ago

The notary is a teeny-tiny portion of the expense in the homebuying process. And you'd still need a lawyer involved if your transaction involves mortgages (and likely you'd still want one anyway to construct the transaction). Putting deeds on the blockchain changes the homebuying process almost not at all. As for state IDs... why not just a centralized database with a public API? What does decentralization achieve for a system that is fundamentally centralized. Nobody can issue an ID except the government in this case.

kikimora 5y ago
The promise of blockchain is to eventually remove lawyers and all middleman. It can be done already with existing tech. I can easily imagine a smart contract managing property rights, another one managing mortgages, etc. And of course all that has a back door so a court order can rollback a transaction.
- thinkmassive 5y ago
  > And of course all that has a back door so a court order can rollback a transaction. …so you still need a lawyer and nothing has actually changed?
  - kikimora 5y ago
    You got me, lawyers can stay :) But a bunch of clerks and middleman are out. Today the job of a middleman/clerk is to modify a centralized database in a regulated way. They got their licenses, exams, special education and so on. There is a government machinery behind every such database - agencies, controllers, educators, bookkeepers, etc. While you may be paying $4 for a notary signature you might be paying way more from your tax money to keep governing bodies running across the country. My point is statement that a centralized database is cheap because it is easy to modify simply ignores governance cost which might be huge.
- cuteboy19 5y ago
  if we are trusting courts to have backdoors, does it not completely negate the purpose of blockchains, i.e. trustlessness if you trust the court, why not just have them store everything on some mysql database and execute all the ""smart"" contracts as regular java code? blockchains are necessarily orders of magnitude worse in terms of performance. why do you want to use an extremely slow linked list based DB?

jerf 5y ago

If home ownership was on a distributed blockchain, local regulators would rapidly discover a need for something like a notary to verify that the transaction has been done correctly on the correct blockchain by the people who actually own it, so as to ensure the consumer isn't sitting on the other side of the table with someone not bamboozling them about their ownership of the house, or bamboozling them about their transfer of ownership, or so and so forth. The notary would also validate that the transfer has successfully been completed on the blockchain respected by the local governing authorities, and has been filled out completely correctly. You might think this is silly, but fake selling of homes is actually thing that happens! I don't just mean that regulators would do it for gatekeeping purposes, I mean there would be a real need for this. In the bizarre circumstance that this move to the blockchain actually happened for home ownership, the HN gestalt would rapidly be screaming for legislation and regulation around blockchain changes. Which means, once again, that blockchain is solving a problem that doesn't exist here. The problem with home ownership and the problem notaries are solving was never that the authority was too centralized into the relevant governing bodies. That's the reason why after 11 years blockchain has exactly one use case, and even that one is dubiously solved IMHO. It brilliantly solves problems we don't actually have.

chucke 5y ago
I believe you're downplaying the potential here (and I'm overplaying it). A particular blockchain you could immediately verify home ownership online via some sort of signature with the public key from a seller seems like providing the same type of guarantees. Is it 100% safe? Certainly not. But considering your notary might be a fraud, a scammer or just not very good at what he does... Compare the example with withdrawing money: you can go to an ATM and withdraw money for no fee, depending of the country. Do it in the bank, there I an associated fee. The legal system would still have to adopt it though. And it's an industry less prone to digital innovation. And there is no financial incentive, as there is no narrow profit margin you need to optimize. So yes, it may never happen.