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>Which means that the property ownership is literally a spreadsheet (often with a date in the file name) Are you implying that the spreadsheet is/was itself a

>Which means that the property ownership is literally a spreadsheet (often with a date in the file name) Are you implying that the spreadsheet is/was itself a legal document signifying ownership? Because that is radically different for my understanding of home ownership. I have never owned property, but to my knowledge ownership is conferred by way of a deed that is registered with the government. Which leads to the main issue with the crypto hype that I see. The majority of the space is taken up by two overlapping camps: get rich quick shills and techno libertarians who believe we’d have utopia if not for the pesky government.

TheOtherHobbes 4y ago
If there's a mortgage the deed is held by the mortgagee. Or at the very least there will be a formal legal claim on the deed (in the UK it's called a lien or a charge - not quite identical but similar) which isn't satisfied until the mortgage is paid off. Worse, there were instances in 2008 of banks stealing homes out from under people - who sometimes didn't even have a mortgage - by getting fake paperwork waved through, because it was impractical for all the competing claims on a loan to be properly validated. https://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/ https://www.salon.com/2013/08/12/your_mortgage_documents_are... Would blockchain fix this? No. The problem wasn't tracking the transactions, it was the fact that banks and the financial industry fraudulently hid the true risk of various loan bundles. Blockchain would only have solved this problem if the loan context - creditworthiness, payment history, and so on - was included with every loan transaction, and could easily be accessed and summarised for all the transactions in all of the loan bundles. Which blockchain doesn't do. Coincidentally, this is exactly the same problem that blockchain hasn't solved for FTX, Binance, Mt Gox, etc. Blockchain does not provide an objective assessment of risk, value, or corporate credibility. It's just a ledger. Even if you can't manipulate the ledger, you can still manipulate the perceived meaning of the numbers in the ledger. Especially if you're a trusted party in the cryptoverse. In fact it doesn't just fail to fix these problems, it creates new opportunities for spectacular frauds.
- digitaltrees 4y ago
  Actually yes the problem was tracking the transactions. There were literally competing spreadsheets that teams of lawyers had to argue about and reconcile by looking at emails between traders and comparing row by row. Have you ever tried to compare two spreadsheets? Lawyers know how to blackline two word docs. They don’t know how to compare two datasets programmatically. It’s part of the reason I started coding. I felt after charging $850hr to manually compare row level data across spreadsheets. In fact counts eventually started getting harder on banks, rejecting the argument that tracking transactions was impractical and ruling in favor of homeowners and making the banks eat the loss for their own shoddy paperwork. But for many it was too late.
digitaltrees 4y ago
There is legal and practical ownership and they differ in practice. So imagine Bank of America issues a mortgage. They don’t want to keep the risk on their balance sheet so they create a mortgage backed security with 1000 other mortgages. Then they sell that to Goldman Sachs who in turn sells it to Lehman, but not the full portfolio only a portio, say tiers 8-10 of 10. In order to “facilitate liquidity” and “market efficiency” they wouldn’t document every transaction on the local county register of deeds. They would “trade” the securities by sending each other spreadsheets and hopefully “record” the transaction with a 3rd party like MERS. But when 2008 hit it often required going to court to fight out who owned what. Worse lots of homeowners ended up being foreclosed on because their payments didn’t go to the right owner on file. So yes, the legal title is recognized by a written record held by the government, the market implementation adds layers on top to facilitate trading the paper.
- comte7092 4y ago
  Sounds like the issue is that they aren’t properly recording their transactions, which is something that could be fairly effectively managed by a centralized database rather than the blockchain. Or at least, I don’t see what benefit the blockchain provides over such a centralized structure.
  - digitaltrees 4y ago
    I agree. But it could also be solved by blockchain. And that was the question.

TheOtherHobbes 4y ago

If there's a mortgage the deed is held by the mortgagee. Or at the very least there will be a formal legal claim on the deed (in the UK it's called a lien or a charge - not quite identical but similar) which isn't satisfied until the mortgage is paid off. Worse, there were instances in 2008 of banks stealing homes out from under people - who sometimes didn't even have a mortgage - by getting fake paperwork waved through, because it was impractical for all the competing claims on a loan to be properly validated. https://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/ https://www.salon.com/2013/08/12/your_mortgage_documents_are... Would blockchain fix this? No. The problem wasn't tracking the transactions, it was the fact that banks and the financial industry fraudulently hid the true risk of various loan bundles. Blockchain would only have solved this problem if the loan context - creditworthiness, payment history, and so on - was included with every loan transaction, and could easily be accessed and summarised for all the transactions in all of the loan bundles. Which blockchain doesn't do. Coincidentally, this is exactly the same problem that blockchain hasn't solved for FTX, Binance, Mt Gox, etc. Blockchain does not provide an objective assessment of risk, value, or corporate credibility. It's just a ledger. Even if you can't manipulate the ledger, you can still manipulate the perceived meaning of the numbers in the ledger. Especially if you're a trusted party in the cryptoverse. In fact it doesn't just fail to fix these problems, it creates new opportunities for spectacular frauds.

digitaltrees 4y ago
Actually yes the problem was tracking the transactions. There were literally competing spreadsheets that teams of lawyers had to argue about and reconcile by looking at emails between traders and comparing row by row. Have you ever tried to compare two spreadsheets? Lawyers know how to blackline two word docs. They don’t know how to compare two datasets programmatically. It’s part of the reason I started coding. I felt after charging $850hr to manually compare row level data across spreadsheets. In fact counts eventually started getting harder on banks, rejecting the argument that tracking transactions was impractical and ruling in favor of homeowners and making the banks eat the loss for their own shoddy paperwork. But for many it was too late.

digitaltrees 4y ago

There is legal and practical ownership and they differ in practice. So imagine Bank of America issues a mortgage. They don’t want to keep the risk on their balance sheet so they create a mortgage backed security with 1000 other mortgages. Then they sell that to Goldman Sachs who in turn sells it to Lehman, but not the full portfolio only a portio, say tiers 8-10 of 10. In order to “facilitate liquidity” and “market efficiency” they wouldn’t document every transaction on the local county register of deeds. They would “trade” the securities by sending each other spreadsheets and hopefully “record” the transaction with a 3rd party like MERS. But when 2008 hit it often required going to court to fight out who owned what. Worse lots of homeowners ended up being foreclosed on because their payments didn’t go to the right owner on file. So yes, the legal title is recognized by a written record held by the government, the market implementation adds layers on top to facilitate trading the paper.

comte7092 4y ago
Sounds like the issue is that they aren’t properly recording their transactions, which is something that could be fairly effectively managed by a centralized database rather than the blockchain. Or at least, I don’t see what benefit the blockchain provides over such a centralized structure.
- digitaltrees 4y ago
  I agree. But it could also be solved by blockchain. And that was the question.