You must be familiar with the digital currency called Bitcoins. A Bitcoin is a digital currency which can be stored electronically. Bitcoins are not controlled or regulated by any Country, Government or Bank. So what's special about Bitcoins? It's not the Bitcoins you need to be concerned about. It's the technology they run on called Blockchain technology.
This is a shared public ledger. Every single confirmed transaction anywhere in the World is recorded in the Blockchain.Now, Blockchain technology has practical applications. Blockchain technology can be used to reduce benami transactions very common in property dealings and take PM Narendra Modi's fight against black money to the next level.
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The word Benami in Hindi means without a name. For those who don't know, a Benami property is held by one person, but the money is paid by another person.If you buy a property in the name of your spouse, child, father, mother, brother or sister and the money is not paid from your known sources of income, this is a Benami property.
The transaction involved in a Benami property is called a Benami transaction. You can invest black money in buying a Benami property. It is very difficult to trace the real owners of these Benami properties which helps you easily evade taxes.
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1. Blockchain technology can stop fraud in real estate
A Blockchain can be used as a digital ledger to keep a record of accounts. It's simple....The digital ledger gives an account of who owns what and when. With the help of Blockchain, a digital record of transactions like property transactions can be created. This is a system of inerasable records.
If land and property transactions are on the Blockchain (digital ledger), it is very easy for you (buyer) of the property, seller of the property, real estate agents, banks and government employees to trace the ownership of this property. This will prevent fraudulent transactions, where the same property is sold to you and other buyers.
In India, land records are not digitized. It is very difficult to trace records of ownership and verify land titles. This leads to fraud in real estate. Most of the disputes pending in courts are with regard to land titles and property fraud.
Bitcoin technology can put an end to fraud in real estate.
2. Blockchain technology can end Benami Transactions
You must have heard the saying, "Prevention is better than cure." Blockchain can be used to create algorithms which can detect and prevent benami transactions and nip them in the bud. Blockchain can track title holdings (who is the owner of the property based on the title), check if the title is clear and marketable and trace the money trail (who has paid money for the property).
Today, you are penalized with a prison term and a fine if the benami transaction is detected. If all title holdings are stored in the Blockchain, you would have no chance to indulge in Benami transactions and all past Benami transactions would be easily detected.
Blockchain can track the real owner of the property and curb benami transactions through multiple identities.
Banks and Insurers spend a lot of time verifying land records. If Blockchain is used, banks can easily verify land records which lowers transaction costs. This means you pay a lower processing fee on that home loan. Your home loan is disbursed in no time.
Don't you think blockchain technology can facilitate rapid disbursal of your home loan?
Yes, Blockchain can be the solution to all those problems that plague real estate in India. But first...Technology infrastructure needs to be built to facilitate the use of Blockchain in India. Problems vis-a-vis land records need to be resolved. If land records do not exist, they need to be created. Countries like Georgia and Sweden are experimenting with Blockchain and its practical applications in recording and storing land title data. Why should India be left behind? Be Wise, Get Rich.
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