Blockchain Can Register Physical Assets
As the Blockchain technology matured, the development focus started to shift away from handling exclusively cryptocurrencies and started to use the public ledger to register physical assets. This shift started happening around the second half of 2013 and heralded the beginning of what is called “Blockchain 2.0”.
Validating the existence or the possession of signed documents plays an important part in many financial and legal processes. The challenge of traditional document validation models is that they rely on central authorities for storing and validating the documents, which presents various risks in regards to transfers, risk of breach, as well as risk of deterioration.
Blockchain technology provides an alternative model to proof-of-existence and possession of legal documents. By leveraging the blockchain, a user can simply store the signature and timestamp associated with a document in the blockchain and validate it at any point using native blockchain mechanisms. To register ownership of an asset, a transaction is created with a reference to the physical asset. This information is stored on a Blockchain record, holding roughly 40 bytes of data, and can be associated with all manner of goods or services. The owner of the private key to that public record is then registered as the owner of that asset.
Case Study: Factom
A very ambitious Blockchain 2.0 project is in development from the Factom team. They are working on a system that secures and proves the authenticity of records, documents or other important types of data. The Factom system will ultimately consist of a four-tier architecture designed to both produce verified chains of information and secure that data within the Block chain.
They have a variety of use-cases, such as creating trustless audit chains, record keeping for sensitive personal, medical and corporate materials, and identity management as a KYC solution.
Factom has raised $1.7m so far in their series A funding, and is currently valued $11m. Paul Snow, one of the founders of Factom, told in an interview that they plan on building a node network with an infrastructure that can handle high transaction volume and that the
architecture itself will be comprised of both full nodes capable of replicating all the data, and partial nodes replicating only the data needed in specified chains.
Its initial use-case is a land registry initiative being developed in coordination with the government of Honduras. The nation has a history of land rights abuse. where corruption and mismanagement have fueled a conflict over property rights which have lasted decades. Factom hopes that a system making it easy to store proof of ownership will find initial success in countries where government registries are missing or otherwise lacking, but that their solution can spread to the rest of the world if successful.