General details
EDIHs involved
Challenges
In the rapidly evolving landscape of technology, the challenge revolves around harnessing the power of blockchain technology to enhance and secure registration processes, specifically focusing on the creation of a cutting-edge register center. Registru Centras contacted DI4 Lithuania to tackle this challenge, aiming to address the inefficiencies and vulnerabilities inherent in traditional registration systems by leveraging the transparency, immutability, and decentralisation features offered by blockchain. Key objectives of the challenge include:
Security Enhancement (Solve vulnerabilities of traditional systems often relied on centralised databases, tampering risks of data in conventional databases that can be altered by those with access and dependence on robust security protocols which can vary in effectiveness),
Decentralised Verification (Verification typically relies on a central authority or third-party intermediaries, which can introduce delays, additional costs, and potential biases and usually lack of transparency) ,
User-Friendly Interface (Traditional systems are generally more user-friendly and familiar to the average user, but world is already moving to Digital Wallets concept and we need to adapt),
Interoperability (While there are emerging standards for blockchain interoperability, seamless interaction between different blockchain networks is still a challenge. Integrating blockchain with existing systems and technologies requires significant effort and can be complex),
Smart Contracts Integration (Traditional contracts often require manual processing and third-party enforcement, which can be time-consuming and costly, also enforcement of agreements typically relies on traditional legal systems, which can be slow and inefficient)
The issues of the human resources (slow, error probability, skills shortage).
Solutions
First of all, in order for all organisations to be able to operate it was decided to make a specific course to educate the community about the technology itself by answering the main questions: How technology works? What AI and Blockchain covers? What is under their definition? How it will change work environment and markets? What are the tools available and how they work? What are the real use-cases of the technologies? Additionally, the topic of Artificial intelligence was added to course due to popularity of the technology and the possibility of additional tools that can be added to the blockchain environment. Moreover, a technology roadmap was developed to evaluate the blockchain model suitability for real estate register by examining all global examples and tendencies (i.e. Estonia, Singapore, Sweden and others). A technological scheme was drawn including possible blocks that will appear in the chain, possible new players and digital solutions in the process described. Then the future plan of development was provided with exact steps and needed investments for each step, additionally colleagues from MRU made specific study on what needs to be changed in the regulatory base in order to be able to use this technology at national level. Lastly, the prototype of such blockchain environment for real estate register (based on Etherium) was developed inside Kaunas University of Technology. Several specialists from State Enterprise Centre of Registers were provided with access to this prototype in order to simulate real case scenarios and to understand the concept more closely.
Results and Benefits
The development of a real estate smart contract prototype, designed for automating payments and listing associated items and services, is ongoing. This continued development will enhance the functionality, user interface, and overall usability of the system. The next phase focuses on creating an Enterprise Ethereum blockchain tailored to the real estate renting and buying market, which will enable more seamless and secure transactions.
In parallel, Registrų Centras is preparing to take on a pivotal role as the National Managing Institution for the EU Digital Wallet project. This initiative will complement their participation in various EU-funded projects aimed at implementing blockchain technology in public institutions, such as the European Blockchain Regulatory Sandbox.
These advancements represent the future of public administration processes, offering significant benefits to all stakeholders. By integrating blockchain technology, the real estate rental processes will become easier, more transparent, and secure. Additionally, these innovations will ensure seamless integration with other public institutions, such as tax offices, registers, and municipalities, enhancing the overall efficiency and trustworthiness of the system.
Perceived social/economic impact
The implementation of a hybrid blockchain model for real estate registry procedures promises significant social and economic benefits. This model will enhance the trustworthiness and decentralisation of the registry system while maintaining necessary oversight by the registry center. By leveraging blockchain technology, the system will become more secure, immutable, and transparent, leading to faster processing times and reduced registration costs.
Adopting this model will improve transparency and security in real estate transactions, making the process safer for users and reducing the risk of fraud. This increased trust and efficiency can lead to greater public confidence in real estate transactions and more robust market dynamics.
Furthermore, the insights and expertise gained from developing and implementing this hybrid blockchain model will be instrumental for future projects at Registrų Centras. This includes potential participation in the European Blockchain Regulatory Sandbox and the EU Digital Wallet project, where the knowledge acquired could drive innovation and contribute to broader blockchain adoption across public institutions.
Measurable data
Over the past five years, Registrų Centras has consistently registered over 130,000 real estate transactions annually, with rental transactions comprising up to 10% of this total. Implementing blockchain technologies has the potential to significantly enhance the system by increasing transparency, improving availability, and streamlining processes.
DMA score and results - Stage 0
The overall DMA score of Registrų Centras is 90%, indicating that it is a digitally advanced SME. This Digital Maturity Assessment score indicates a quite advance stage of the digital transformation process of the company, being already a frontrunner and reaping the benefits from the use of digital technologies for quite some time.
Even though Registrų Centras is already advanced they could further improve in areas such as the "Digital Readiness", which scored only 73%. This dimension refers to the current uptake of digital technologies, both mainstream and more advanced technologies). Therefore, this has been considered the main area of improvement for Registrų Centras when it comes to digitalising their business.
Lessons learned
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Challenges with regulated PSOs: Working with highly regulated PSOs can be challenging due to stringent rules and procedures. However, the potential impact of successful collaboration can be significant and transformative.
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Advancing through project-based services: Projects that introduce innovative services can help these organisations advance by alleviating the bureaucratic burden that often stifles progress. This can lead to more agile and efficient operations.
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Divergent attitudes toward technological change: C-level executives generally exhibited optimism regarding strategic technological changes, such as adopting new technologies. In contrast, IT department staff were notably more skeptical and resistant to change, preferring to maintain their existing skills and practices.
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Need for specialised IT personnel: To effectively implement blockchain technology, it became clear that the organisation would require a new team of IT professionals with specialised skills, as existing staff were not aligned with the new technological direction.
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Mid-level manager engagement: Mid-level managers showed active interest in the implementation of new technologies but expressed uncertainty about how these technologies would integrate with current processes within the organisation.
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Interest in AI tools: There is a general eagerness to learn about existing AI tools available on the market. However, there is less enthusiasm for developing novel applications of AI technology, indicating a preference for leveraging established solutions rather than innovating new uses.
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