Smart Property: Current use and potential?

[d5000]

One of the use cases of blockchains like Bitcoin are "smart property" contracts.

There is a nice introductory article in the Bitcoin Wiki. In short: Smart property uses digital "tokens" that represent "real things" (goods and services) and give the owner a kind of access right. For example, if the "good" is represented is a phone, that token could contain a "unlock code" that is necessary to use it.

Other ideas could be tokens that contain "legal contracts" regarding an ownership right between a provider of a good or service and the owner of the token, althought that would be a bit more complex because for some jurisdictions the contract would probably have to be changed, so the "access key" idea seems to be way easier to implement.

My interest on that topic has increased in the last month because I thought such "smart property" contracts could be used to "back" Bitcoin in some way in a transparent good-and-service market on the blockchain. But I currently find very few information of the current usage/state of that concept - there are many old articles and forum threads from 2011 to 2014, some also related to altcoins.

Does someone know if smart property is already really used now and what are the currently discussed implementations and concepts?

[baradfo]

Interesting thoughts on that. What's your take about real estate in that regard?

[d5000]

Interesting thoughts on that. What's your take about real estate in that regard?

Well, the "state" and current usage of use cases like real estate is something that I would like to find out with this thread.

However, I perhaps see more potential for "smaller-valued" but more easily "claimable" goods, above all those that can be accessed online once you have bought the "smart property" token that provides you the necessary access credentials. A prime example would be hosting contracts and other cloud applications.

[Jake052478]

Nice article.  Indeed the scope of bitcoins is widening.  It is good to know that bitcoins should have a materials exchange or value after all. Like cash, it is supported with gold bullions, so bitcoins should also do the same.  That is the reason why come countries wanted it to be regulated because as far the legal basis is concerned, we user of bitcoins does not have one.  Tax is not imposed on using bitcoins... So i would say, a value to back up bitcoins should be observed.

[AgentofCoin]

...
Does someone know if smart property is already really used now and what are the currently discussed implementations and concepts?

I don't think "smart property" or "smart assets" under our current
understanding and technological level can exist without third parties.

The blockchain was created only to facilitate a currency device that is
itself the blockchain system. That is Bitcoin's secret to success. The
blockchain is not really a currency facilitation platform, but is the
currency. That was the solution that Satoshi created. The blockchain
is not a chained ledger system, but is the digital token represented
in a physical verifiable form with self arbitration rules. Even Ethereum
has fallen into this trap, where they wanted to create a smart contract
platform based on blockchain, yet their token is mainly used for
currency or asset speculation, as a natural consequence of using
the blockchain within their concept. (IMO, it will become more
and more a regulatable currency and less a contracting device.)

So, if you choose to accept that argument, how is it possible to
"blockchain" things which are not actual representations of the
blockchain system, but only representations of things outside that
blockchain?

I'm not saying people are misguided here or are wasting their time,
since someone may come up with a solution eventually/possibly, but
I do not think the answer will be "blockchain". When Satoshi created
the blockchain, it was a means to an end, not a multi-tool solution
that can be added to preexisting systems to improve efficiency or
whatever. He backwards engineered for an online currency solution.

"Smart Contracts" and the like are expected and inevitable into the
future, but I think they will only be possible when non-biased and
non-corruptible Artificial Intelligences will perform the third party
duties that are always required for representations that the
blockchain can not directly represent.

[iram1011]

...
Does someone know if smart property is already really used now and what are the currently discussed implementations and concepts?

I don't think "smart property" or "smart assets" under our current
understanding and technological level can exist without third parties.

The blockchain was created only to facilitate a currency device that is
itself the blockchain system. That is Bitcoin's secret to success. The
blockchain is not really a currency facilitation platform, but is the
currency. That was the solution that Satoshi created. The blockchain
is not a chained ledger system, but is the digital token represented
in a physical verifiable form with self arbitration rules. Even Ethereum
has fallen into this trap, where they wanted to create a smart contract
platform based on blockchain, yet their token is mainly used for
currency or asset speculation, as a natural consequence of using
the blockchain within their concept. (IMO, it will become more
and more a regulatable currency and less a contracting device.)

So, if you choose to accept that argument, how is it possible to
"blockchain" things which are not actual representations of the
blockchain system, but only representations of things outside that
blockchain?

I'm not saying people are misguided here or are wasting their time,
since someone may come up with a solution eventually/possibly, but
I do not think the answer will be "blockchain". When Satoshi created
the blockchain, it was a means to an end, not a multi-tool solution
that can be added to preexisting systems to improve efficiency or
whatever. He backwards engineered for an online currency solution.

"Smart Contracts" and the like are expected and inevitable into the
future, but I think they will only be possible when non-biased and
non-corruptible Artificial Intelligences will perform the third party
duties that are always required for representations that the
blockchain can not directly represent.

Indeed Ethereum has failed terribly so far as smart contract but you have to accept that the smart contract feature can only work when the user base is big enough. With such a small user base, we don't have diversity here.

But I didn't get your point that blockchain can't facilitate smart property. By representing property as a code on blockchain, why can't smart property work? Blockchain do have potential to be used more than what Satoshi has created it to be. More than Bitcoin, blockchain is a revolution. All what is needed is more adoption and a better platform.

[AgentofCoin]

...
Does someone know if smart property is already really used now and what are the currently discussed implementations and concepts?

I don't think "smart property" or "smart assets" under our current
understanding and technological level can exist without third parties.
...
...
...

Indeed Ethereum has failed terribly so far as smart contract but you have to accept that the smart contract feature can only work when the user base is big enough. With such a small user base, we don't have diversity here.

I agree that in time, with new innovations and by finding a real niche,
Ethereum could become important and facilitate what the developers
originally envisioned. But that will not come with users or mass adoption,
but from an actual product that they could maintain a monopoly over.

But I didn't get your point that blockchain can't facilitate smart property. By representing property as a code on blockchain, why can't smart property work?
...

Simply, the different parts of the Bitcoin system are actually the same entity
represented in three different ways. It is like in physics, with how light can be
a wave and a particle at the same time. The ledger entry, the work performed,
and the token representative is in actuality the same thing, viewed through
three different perspectives. This network type is cyclical and provides true
computational security from its enclosed self sustaining system. In a way, it
could be compared to the Ouroboros snake, and this is one of the reasons
for Bitcoin's success, it is it's own walled self sustaining city.

So, if this is true and now we wish to make the token a representation of any
physical property, it breaks the security system that is inherent in the Satoshi
blockchain system, since the physical property can never be converted into
energy, the same way electricity through PoW is transmuted into the blockchain,
which is the token and its value. Very simply, the token will never truly be tied
to that property on chain, other than by third party guarantees that they are.

So, because of this reasoning, I do not think blockchains can really do anything
other than currency. The blockchain is the currency, but a blockchain can not be
a physical property without a third party telling you to trust that it is.

[Wind_FURY]

Interesting thoughts on that. What's your take about real estate in that regard?

Well, the "state" and current usage of use cases like real estate is something that I would like to find out with this thread.

However, I perhaps see more potential for "smaller-valued" but more easily "claimable" goods, above all those that can be accessed online once you have bought the "smart property" token that provides you the necessary access credentials. A prime example would be hosting contracts and other cloud applications.

For the real estate investment of the future it could be holding the private keys to control a part or a whole building/house. If somehow, someone could make an IOT device for locks/doors that allows you to send tokens to it to unlock/open them for you to have access. I believe that this use case can also be used in other "smart things" like vehicles and computers.

[SummerBliss]

One of the use cases of blockchains like Bitcoin are "smart property" contracts.

There is a nice introductory article in the Bitcoin Wiki. In short: Smart property uses digital "tokens" that represent "real things" (goods and services) and give the owner a kind of access right. For example, if the "good" is represented is a phone, that token could contain a "unlock code" that is necessary to use it.

Other ideas could be tokens that contain "legal contracts" regarding an ownership right between a provider of a good or service and the owner of the token, althought that would be a bit more complex because for some jurisdictions the contract would probably have to be changed, so the "access key" idea seems to be way easier to implement.

My interest on that topic has increased in the last month because I thought such "smart property" contracts could be used to "back" Bitcoin in some way in a transparent good-and-service market on the blockchain. But I currently find very few information of the current usage/state of that concept - there are many old articles and forum threads from 2011 to 2014, some also related to altcoins.

Does someone know if smart property is already really used now and what are the currently discussed implementations and concepts?

Right now the tech we have, I don't think that blockchain can help anymore than being an intermediate between a transaction whether it is buying or selling of something or allocation of properties or bonds. Blockchain can only help in building a trust between the two parties since their transaction will be visible to all and hence there will be no fraud. What you are saying is something to another level. Some encrypted key to be used to unlock physical properties or things directly using blockchain tech is not possible as for now. But can be a good idea to research upon in Internet of Things.

[Prodigan786]

I have seen lots of ICO happening based on smart property or Digital goods and token represents the value of assets past several month increasing real estate  project and other projects are happening. Its really good move.

[Kakmakr]

I think the currency token became the main focus in Bitcoin and the smart contract idea spilled over to Ethereum to give them some traction in the market. In the early days of Ethereum, it was promoted as the best platform for Smart contracts, but as time went by nobody used it for that and they changed their focus to something that would generate some transactions, which is the <yes you guessed it> currency token.

Smart contracts sounds like a excellent idea, but nobody is using it. ^hmmmmm^

[krishnapramod]

Colored coins is one of the ways to implement smart property.

Colored Coins is a concept that allows attaching metadata to Bitcoin transactions and leveraging the Bitcoin infrastructure for issuing and trading immutable digital assets that can represent real world value. The value of such digital assets is tied to a real-world promise by the asset issuers that they are willing to redeem those digital tokens for something of value in the real world.

Digital assets on top of the Bitcoin Blockchain can be used to issue Financial assets (securities like shares, commodities like Gold or new currencies), prove ownership (A digital key to a house or a car, a concert ticket), store information (Documents, Certificates) or create smart contracts.

A deed for a house can be represented on the Blockchain as a colored coin. The owner of that coin is then the legal owner of the house. Transferring ownership of the house becomes as simple as making a Bitcoin transaction.

Advantages are, can be digitally stored and transferred to a new owner without needing a third party. The infrastructure of technology, software, hardware and services which powers Bitcoin
carries naturally to benefiting colored coins.

Disadvantages are spam/Blockchain bloat, insufficient hashing fees, and legal concerns.

Current projects leveraging Open Assets:

https://github.com/Colored-Coins/Colored-Coins-Protocol-Specification/wiki/Introduction

https://www.coinprism.com

http://coloredcoins.org

https://bitcoil.co.il/BitcoinX.pdf

[d5000]

I don't think "smart property" or "smart assets" under our current
understanding and technological level can exist without third parties.

I don't understand exactly what you mean with a "third party". Obviously, there must be an "issuer" that has some form of control of the "property" that is represented. In my example of hosting contracts it would be the entity that is offering the "physical" access to the server in the datacenter via credentials (normally the hosting provider or a reseller). In the case of a car with an access code, it must be the entity that controls the access control system and can guarantee access to the owner of the access code.

So smart property tokens would have characteristics of an "IOU", like those traded on different platforms like Ethereum, Ripple, or NXT; or on the Bitcoin blockchain via Counterparty or OpenAssets (thanks @krishnaprmod for examples).

Maybe you are thinking of a "smart property without an (human) issuer" - here I agree that technology is far away from that. But "smart property with an issuer" would surely be useful, because they would enable "decentralized trading" of these assets and new forms of crowdfunding - I started this thread to see if there are already experiencies with that.

Right now the tech we have, I don't think that blockchain can help anymore than being an intermediate between a transaction whether it is buying or selling of something or allocation of properties or bonds. Blockchain can only help in building a trust between the two parties since their transaction will be visible to all and hence there will be no fraud. What you are saying is something to another level. Some encrypted key to be used to unlock physical properties or things directly using blockchain tech is not possible as for now. But can be a good idea to research upon in Internet of Things.

Are you sure that it's not possible?
A problem with access codes I can imagine is that every owner must have a new code based on a kind of seed, because if all owners that buy a smart property token in its "lifetime" had the same code, these codes would be rapidly known (and spread by hackers through the web). But digital signatures provide a means for that - only that the device that controls access must be connected to the blockchain network. That should be doable even with a Raspberry Pi or a similar device ...

I have seen lots of ICO happening based on smart property or Digital goods and token represents the value of assets past several month increasing real estate  project and other projects are happening. Its really good move.

Can you give me some examples? I have only seen ICOs raising "money for a business", but no one directly tied to a physical property.

[AgentofCoin]

I don't think "smart property" or "smart assets" under our current
understanding and technological level can exist without third parties.

I don't understand exactly what you mean with a "third party". Obviously, there must be an "issuer" that has some form of control of the "property" that is represented. In my example of hosting contracts it would be the entity that is offering the "physical" access to the server in the datacenter via credentials (normally the hosting provider or a reseller). In the case of a car with an access code, it must be the entity that controls the access control system and can guarantee access to the owner of the access code.

So smart property tokens would have characteristics of an "IOU", like those traded on different platforms like Ethereum, Ripple, or NXT; or on the Bitcoin blockchain via Counterparty or OpenAssets (thanks @krishnaprmod for examples).

Maybe you are thinking of a "smart property without an (human) issuer" - here I agree that technology is far away from that. But "smart property with an issuer" would surely be useful, because they would enable "decentralized trading" of these assets and new forms of crowdfunding - I started this thread to see if there are already experiencies with that.

You may be correct in that I am taking a strict interpretation of blockchain,
but IMO, the purpose of the blockchain was to prevent governments, banks,
or any conceivable third party from having the ability to control or seize
something that is allegedly your "property" (with Bitcoin, it is the token itself).

IMO if physical property was tagged to a token that is within a blockchain
system, but I am able to take control of that property outside of the blockchain,
it was never actually secured or maintained the same way that the blockchain
was designed to do. Unless the property has a unique unalterable fingerprint
that is inherent to that property, like a unique and unchangeable radioactive
decay of certain elements within that property or something like that, the
tagging to the blockchain and its token is only superficial. For example, I
can seize your car with a tow truck, and place it into a car compactor and
then crush it. The blockchain in this way, did not preserve your right to
control your property in the same way Satoshi envisioned. You will still
control your token representative, but your property is destroyed.

But it doesn't really matter because if you are willing to accept there is a
human issuer/arbiter/police/and court system for this type of blockchain
registration system, then I am just ranting over nothing.

[franky1]

many have tried different things

one person i remember had a pawn shop and had a few customers who would put a few sats on an address and a 'ascii' output in the form of a ticket number.
then if (within time period) the person wanted to claim their goods back they would sign a message using their original key to prove ownership. thus they didnt need to provide ID or need to hold onto paper tickets to prove ownership/claim.

-
one person had a system set up that monitored the blockchain. if a certain address got funded. it triggered an app to do a task. this was then expanded to cause the payment to move to other addresses to trigger other tasks. the idea was a prototype that if, for instance someone wanted to buy a car the dealership would fund  certain address linked to a specific vehicle specification. and the result would be a manufacturer would see the 'order' (in the form of the payment. and the payment would trigger the ordering of the car parts to then manufacture the vehicle based on the programming of subsequent payments to addresses linked to parts. thus automating the car ordering/manufacturing process. as i said it was a prototype idea/template

-

one person had it where they had appointments. and when they clicked 'client arrived' it sent a payment to the consultants address thus the consultant got paid per client that arrived. the idea was to automate payroll based on work done rather than salary just for the consultant being there

the second idea (car manufacturing) could be used for anything, like healthcare. EG patient needs surgury, hospital pays a 'heart bypass address' and that triggers a app to book an operation date, and then move funds to pay the surgeon, nurses, order the sterile equipment, etc. to ensure its all there and paid for ready for the operation.

as for proper smart contracts. well thats stuff other altcoins have done because a few of them allow if/else statements, which would bloat up bitcoin if bitcoin started to have lots of 'code' within a tx

[d5000]

@AgentOfCoin:

You are totally right, but I think this kind of "smart contracts" will be simply impossible within a blockchain. In every kind of society you would need a social group (be it called a "company", a "government" or another kind of group or organization, or even a single person) that controls the "property", and this one would be the "third party" you speak of. However, Bitcoin's "currency function" is also not totally separated from social groups because only social groups are able to give Bitcoin tokens "value". Without the acceptance inside a group, Bitcoin would be useless.

@franky1:

Thanks for the examples. Do you have links to threads/websites about them? While these are not exactly the kind of smart property I had in mind first (this kind of property doesn't seem "tradeable") they are good examples for what is possible even with Bitcoin's limited script language. I must think a bit about the second example you provided (the "trigger addresses") and its full potential.

PS: I think the pawn shop example was mentioned in this interesting old thread although the link to the description now leads to some spammy-looking Chinese(?) site.

[franky1]

my examples were pure bitcoin based, so yea 'smart' is limited.. but hey your on a forum about bitcoin so the answers were based on such.

if your talking about real smart contracts/property, the sky's the limit
for instance the car manufacturing 'triggers' can be done as tx code rather than a separate app monitoring bitcoin's chain via api's

in my eye even ethereum is limited in the potential of smart contracts/property. and that soo much more can be possible

[DamianHere]

I guess it's current. but still not well developed. We should find  alternative way to invest and get profit. For example, new ico that is launching in November - is a platform which provides smart contracts without expenditures on  programmers.
That's about future, believe me.