Using Cryptocurrency Smart Contracts to Sell Shares of My House
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>I could sell shares of my house such that they confer only ownership of the economic value of the house at time of exit (sale, my death, etc.) or the shares could be re-sold to someone else if the housing market here gets hotter, etc. but I maintain ownership of the right to occupy the house.
So assuming you create the asset backed tokens via smart contract...when you sell the house and pocket 100% of the proceeds (nothing personal, just hoping for the best and planning for the worst), how am I to enforce my asset backed token in court? What’s the jurisdiction? Where the house is or where I am (the injured is)? It would be very inconvenient for me to have to bring suit in your jurisdiction not mine. What if I sell the token and you don’t pay out the buyer am I joint and severally liable to the buyer?
Assuming there is standing and personal jurisdiction, how does the court know what type of ownership the token creates or created if any at all? You claim it’s an economic interest, but how is the court to decide the ownership/rights over say: fee simple, fee simple defesable, with condition subsequent, joint tenancy, tenancy in common?
Also, maybe the token is not enforceable because it violates the statute of frauds (real estate contracts must be in writing... is a smart contract/code/token a writing that’s satisfies the statute of frauds?), or does the smart contract violate the law of perpetuity?
It’s definately “super doable” to create a token on Ethereum via smart contract (I’ve made multiple tokens myself), but I think it’s anything but clear a asset back token can be created to represent ownership in real estate claiming it’s a simple economic interest without addressing a quagmire of legal issues and enforceability. Even then it’s all theory until it gets tested in the courts and precedent is set.
And I completely agree about the courts needing to decide. A bizarre idea - should we generate a lawsuit as performance art? To establish precedence? That's a scary world if it's possible.
Look up ERC 20 - it's the standard token contract spec. Should be easy to understand if you program other languages.
Also, I wrote a Solidity tutorial (pull requests welcome as the language has changed a bit since I wrote it):
Funny enough I believe the initial iteration of Proofsuite was specifically to subdivide real estate with asset backed tokens, but they launched with a great number of tools to create your own tokens. I would also recommend their YouTube videos/tutorials.
As to generating a lawsuit for performance art...the short answer is: do not do that. If there is a real and actual controversy that is one thing, but - and I can’t stress this enough - consult a lawyer. Playing fast and loose with the courts can result in dismissal of cases with prejudice and even court ordered sanctions. There is probably room for anyone who has purchased an asset backed token to file a declaratory judgement, basically where the court determines the legal rights of the parties without an actual order or award of damages - still you would want to consult an attorney in your jurisdiction first.
We are testing a similar process with physical objects at Trivial.co, and you can read more on details in the whitepaper: https://www.trivial.co/static/website/technical_whitepaper.p... .
Our case is a bit simpler, because with regular items there is no requirement to have a written contract, but the model would work just as well for property.
We did a lot of legal research considering various models for handling this. One of the options that didn't work was tokens representing ownership rights - it would be too difficult because of the variety of international rights, and issues with handling inheritance/theft, and so on.
The details / terms of service / etc are still being ironed out by the legal team, but it seems so far that this concept should work well.
It all sounds good, but just because a smart contract tells a Foundation/business/individual to do something, does not mean they will act accordingly.
In other words it’s not a trustless system, in fact in your very example there is a legal entity (foundation) with a legal document (by-laws).
These types of transactions result in legal disputes regularly off blockchain, I just don’t see how smart contracts/tokens a. Fix that; or b. Even make it better/less likely.
Just an example, say a self driving car is owned by the foundation and it’s generating revenue by doing rides for hire, so you want to buy a % via token. What if the foundation fails to file its annual report and is now no longer in good standing with the state and is administratively dissolved? Now you’re in a position where a. You could be personally liable as an owner for any accident of the car (piercing the corporate veil since the foundation no longer exists and provides liability protection, assuming it ever did) and b. The car (like any other asset) can not be legally transferred out of a dissolved entity to another owner (meaning your liquidity is gone).
That’s a wild hypothetical just for fun, but the main one is the same as any other business transaction what if the foundation (seller) pockets the money from the sale of the asset and doesn’t pay the token holder. There are serious questions regarding how the courts will handle claims from token holders, as opposed to being a party to a written contract (which can still take wild swings in the courts).
You can have a solution that requires trust and is better than a trustless one for a variety reasons. Also, within trust-requiring systems you have ones that are safe and less safe.
Real estate is a hard case, but by no means impossible, particularly if a custodian can hold the assets in the transaction. This approach is well understood.
Tokenization of these assets could make the resulting token a security. Licensing and regulations would then apply. We can help with that maze too.
So perhaps we could use an entity that is experienced in holding real estate assets that have outstanding obligations against them... like a bank? And then, instead of using cryptocurrencies that burn more electricity to service my "tokenized-crypto-mortgage" on my house than my actual house, I could get a "traditional mortgage"!
Hold my beer, I'm going to issue an ICO for this idea.
Do you think banks exist for free? What are the costs of maintaining a system of banks capable of acting as a trusted custodian in such a transaction, covering every jurisdiction the globe over? Have you amortized the cost of aircraft carriers, diplomats, social and class mobility, the set of externalities that ultimately end up reconciled through war and collapse?
We're trying to build a more stable system here. Cryptocurrencies are way cheaper in the long run. Some people have learned this the easy way, most will learn it the hard way.
Whew, thank god Bitcoin got rid of all the aircraft carriers. And class mobility, I was wondering how to solve income inequality, but who knew it was as simple as Blockchain! Blockchain! Blockchain!
Can you detail a feasible process whereby bitcoin gets rid of the aircraft carriers?
Or alternatively, can you detail a feasible process whereby bitcoin gets rid of income inequality?
Your glib reply of 'lol, banks already do this, why do we need to put it on the blockchain' just assumed that banks exist without external costs. And now I'm supposed to get rid of all the external costs you don't know exist? Get an imagination, or beat up on a different straw man.
Transaction for transaction the banking system is orders of magnitude cheaper.
> Have you amortized the cost of aircraft carriers, diplomats, social and class mobility, the set of externalities that ultimately end up reconciled through war and collapse
This is totally absurd. Bitcoin has no impact on the existence of aircraft carriers, diplomats, and social/class mobility. The class mobility line is particularly laughable as it pertains to a technology that would enshrine early adopters as defacto oligarchs.
I don't understand:
- How someone would value the 'tokens' he is selling on his house unless they came and looked at the house.
- How the 'owners' of his tokens could preserve their investment. He might just decide to trash the place since he sold most of it for 'liquidity'.
- Why he wouldn't then just sell the house and take all the money for himself. He'd have sold it twice! How's some crypto geek in Russia who bought his house token going to make a claim on that money?
It sounds like a proof of concept.
If you want to invest in the residential real estate sector the best way to do that is invest in a REIT that owns a portfolio of houses and rents them out. Not buy some shady smart contract token that may or may not entitle you to anything at all legally speaking and has god-only-knows what tax consequences.
Also: I'm not really interested in having capital tied up in real-estate, but a lot of people are. And it makes sense as a middle ground investment - more conservative than stocks or crypto, but more aggressive than bonds or CD's.
This is laughable. Compare the Case-Shiller index of home prices: https://en.wikipedia.org/wiki/Case–Shiller_index#/media/File...
to real s&p 500 prices: https://2us9vjrl2kf1np7bx397xl07-wpengine.netdna-ssl.com/wp-...
And consider that real estate is typically owned with quite a bit of leverage while stocks typically aren't.
Adding a deck, adding solar, painting it purple, or hooking up to public water, just for some examples. Do the shareholders vote on what the tenant/shareholder can do? Isn't this a lot like an HOA?
OTOH, the really big problem with the idea is separating decision-making about the property (which drastically impacts future value) from financial interest in future value. Your aren't investing in the property market, you are investing in the person managing the property, and people who aren't suckers aren't going to want to do that at arm's length without due diligence on the individual and some oversight of their management of the property. (And the ones that are suckers are going to get fleeced quickly and then not be available to invest.)
Super interesting idea, and I have some cash I might be able to spend towards it. But can you ensure the following will be enforced by your smart contract?
1. Tenant agrees to upkeep property, including mowing of lawns, plumbing, electrical, structural.
2. Tenant agrees not to sell, sublet, or abandon the house.
3. Tenant agrees not to do anything illegal that might cause the forfeiture of the house by law.
4. Tenant will give me a key to the property and house, so I can check in on it from time to time.
I probably have some other requirements for the tenant. But I'm super interested in how this might be accomplished via a smart contract.
Looking forward to conducting this via this newfangled smart contract mechanism.
Yours Truly,
R
"Someone who wants to own a % of a real estate asset in this city could just buy a % share of mine.
Smart contracts via crypto make this super doable."
I'm not really interested in having capital tied
up in real-estate, but a lot of people are.
- income (via rent)
- leverage (via a mortgage)
- appreciation (via time and luck)
Leverage is made possible because the income from a property can cover some or all of the cost of the interest on the loan, meaning that all that's tied up is the downpayment, so the appreciation enjoys a multiplier effect (say 5x if you put 20% down). Offering a contract that only allows the investor to participate in the appreciation without any leverage or income just doesn't make sense (for the investor).
Another problem I could see coming up, if you do not get the full benefit of making improvements to your house, you will have less incentive to make improvements to your home. You would also have to figure out how to grant permission to make any improvements as investors would want to make sure any changes to the house would increase the value. If you needed a new water heater, who would pay for it? Could you convince the investors to buy into a high efficiency heater, even if it did not add any value to the house over a regular heater?
Are you thinking of a land lease?
This article would be more compelling if he explored (or at least mentioned) the existing mechanisms for leveraging his home's value (e.g. cash out refinance and HELOCs) and why they don't meet his needs. Instead, he wants to sell fractional ownership and control of his home?
It seems that the blockcoin space has decided that it can be used as a workaround for many financial rules, similar to how Uber/Lyft could work because calling a limo was legal and technology finally made calling a limo like hailing a cab.
I am not deep into the ICOs and blockchain tech but am quite interested in working in this space. I live and own a home in the Bay Area to possibly use as a test bed and have programming experience. I'd enjoy chatting over coffee with someone with similar interests. Username at gmail for contact.
And then they'd also have to agree to honor all stolen tokens. Cryptocurrency really doesn't work unless you let the blockchain be the final arbiter of ownership, which means it would theoretically be possible to steal someone's home.
If he tokenizes his house and then a russian hacks his laptop and steals all his tokens, what happens then? Will he move out and send his keys to moscow?
Ownership ledgers are significant because they have a legal basis and state enforcement to back them up.
The only way to do this practically would be to put ownership of the property into a corporation and sell shares in that corp. But that gets you out of the personal property market, no more owner-occupier status for mortgages or insurance.
"Not just any blockchain-based ledger, however, will suffice. For one, electronic corporate records must be capable of being converted into legible paper form within a reasonable time. Second, like all other Delaware stock ledgers, a blockchain ledger must be able to (i) be used to prepare a list of stockholders entitled to vote, (ii) record information required by the DGCL to be maintained in the ledger and (iii) record transfers of stock pursuant to Article 8 of the Delaware Uniform Commercial Code."
So a blockchain or distributed ledger technology can be used, but it could just as easily be done using a relational database or paper records.
Also, verifying any of the following on the blockchain:
- whether an exit has taken place
- whether the person claiming to own a house actually owns it
- whether the house even exists
- anything concerning the real world, really
Because it very obviously cannot be done.
> in the event of default
How does the contract know a default occurred? The answer is that some entity or individual has to be trusted to input that information into the contract, at which point the smart contract aspect becomes totally useless (and in fact, demonstrably worse than a centralized solution).
As long as the payment is made in ether (or tokens) directly to the contract wallet address the contract will immediately ‘know’ whether or not a payment has occurred. You can easily write a smart contract to require a payment of X ether every Y days. You could even make the contract payment requirements dynamic based on the home’s value over time (ie it could scrape data about other sales in the area from Zillow etc). If the owner misses a payment, perhaps that triggers an email warning, with appropriate escalation thereafter (reminders, phone calls etc). If the owner misses a prenegotiated number of payments, then the contract considers it a default and automatically releases the documentation.
I think the harder problem is if the owner defaults, and a % of the home’s ownership transfers to the token-holders, what then? Presumably they would be minority owners, so they could not force a sale.
What computer runs the scraper? How do I know I can trust the response of this computer? What if the scraper gets banned or breaks?
> If the owner misses a prenegotiated number of payments, then the contract considers it a default and automatically releases the documentation.
How do the token holders know the documentation they will receive upon default will be legit?
How is the relationship between tokens and ownership stake enforced?
What does it mean for multiple token holders to each receive a copy of the executed deed?
Housing price data is publicly-available and pretty easy to verify at no cost. Anyone considering investing in real estate presumably has access to this info already.
>How do the token holders know the documentation they will receive upon default will be legit?
That's a risk with any type of transaction, but easy to verify with a good lawyer. With boilerplate docs the cost of verification goes down with each incremental transaction, i.e. once your lawyer signs off on the docs for your first deal, you can feel reasonably confident making a 2nd deal on the same paper.
>How is the relationship between tokens and ownership stake enforced?
Token holders would only receive an ownership stake if the buyer defaults. Up until that point they are just creditors. Basically this is a mortgage, but it bypasses a long foreclosure process which is better for the lenders/investors.
>What does it mean for multiple token holders to each receive a copy of the executed deed?
There already is precedent for homes to have multiple owners. Depending upon the desired number of lenders/investors, a shell company may need to be created, but again that is relatively straightforward.
That doesn't answer the question of how I know I can trust the computer that feeds housing price data into the contract. What if it cuts the prices by 10% before feeding them into the contract?
> That's a risk with any type of transaction, but easy to verify with a good lawyer
You have no way to ensure that what the lawyer verifies is what the contract will release upon default.
> Token holders would only receive an ownership stake if the buyer defaults
That doesn't answer the question of how the ownership stake is enforced. If the default occurs, the token holders will have to go to court to figure it all out which eliminates the usefulness of the contract.
> There already is precedent for homes to have multiple owners. Depending upon the desired number of lenders/investors, a shell company may need to be created, but again that is relatively straightforward.
If my ownership stake is codified through the existing legal system what use is the smart contract? It doesn't matter what the smart contract does if I've already established myself as a partial owner via a shell corporation.
>That doesn't answer the question of how I know I can trust the computer that feeds housing price data into the contract. What if it cuts the prices by 10% before feeding them into the contract?
You can read the state of a contract for free, so you would be able to see whatever the 'price' was at any given moment. It would obviously be on you to do your DD and confirm that the price is accurate.
>You have no way to ensure that what the lawyer verifies is what the contract will release upon default.
Yes you do, see first comment above.
>If the default occurs, the token holders will have to go to court to figure it all out.
Not all defaults will necessarily lead to litigation. The parties would only need to go to court if the owner did not abide by the terms of the contract. In any traditional foreclosure lots of money and time is spent on legal proceedings.
>If my ownership stake is codified through the existing legal system what use is the smart contract?
You would only need to use the existing legal system in the event of default or breach, which would hopefully be rare. The contract eliminates middlemen. The token also gives investors/lenders significantly more liquidity, which is desirable.
Due diligence is irrelevant. The point is that a smart contract cannot run a scraper, it must outsource that work to another computer living outside the blockchain; that computer is a blackbox thats behavior could change at any time.
> It's easy to verify that the deployed code of an eth smart contract matches the open source code using the Bytecode of the deployed contract
The code is not the issue. If all documents are available from the beginning then the smart contract is not doing anything useful. A smart contract cannot execute a deed automatically so it serves no purpose that could not otherwise be achieved using centralized software systems.
> Not all defaults will necessarily lead to litigation. The parties would only need to go to court if the owner did not abide by the terms of the contract
The entire purpose of a contract is that people very often fail to meet the terms of the agreement. If you're relying on the legal system to adjudicate smart contract disputes then the smart contract is literally no different from a traditional legal contract except that it is written in unnecessarily inefficient blockchain code instead of legalese.
> The token also gives investors/lenders significantly more liquidity
The tokens provide no liquidity because the legal system does not recognize them as real, you might as well print out PGP signed IOUs on index cards for all those tokens are worth.
Sure it can. It would be expensive and slow, but certainly possible.
Yes, an off-chain scraper could change its behavior. I don’t know why it would be in the interest of the company offering this service to do that, but sure. As I said before, you could view the output of this scraper anytime from within the contract itself (either through the company’s front end, or a 3rd party blockchain browser). If it looked lower than the publicly-available average, you would know there was a problem.
>a smart contract cannot execute a deed automatically
Sure it can
>serves no purpose that could not otherwise be achieved using centralized software systems
You argue against yourself here. Your issue with the off-chain scraper is one of trust- ‘how do I know it won’t change its behavior?’ I ask you the same question: how do I know a centralized server will not change my contract, or delete it?
With a distributed smart contract, you can be sure that if you audit the deployed code, it cannot be changed without your knowledge.
>no different from a traditional legal contract
The contract is really more of a trustless escrow system. It holds the legal contract for all parties securely, and ensures that no single bad-actor can change it.
>The tokens provide no liquidity
You don’t know that. If enough projects got funded this way-big if- lenders could buy, sell trade their positions.
Forgive my imprecision, when I said "a smart contract cannot run a scraper" I meant to suggest that it is prohibitively slow, expensive and impractical to do so, like if I said "a macbook cannot render the motion picture Frozen".
> Sure it can
You are conspicuously lacking an explanation of how a smart contract can execute a deed. Still, even if it could, the point is that decentralization is totally useless in this venture. We could envision the exact same scenario you described with centralized software operated by a neutral party and a written contract that spells out identical terms.
> You argue against yourself here. Your issue with the off-chain scraper is one of trust- ‘how do I know it won’t change its behavior?’ I ask you the same question: how do I know a centralized server will not change my contract, or delete it?
You're misunderstanding. I'm not arguing against myself, what I'm trying to explain is that the smart contract doesn't solve the problem of trust because the only thing that matters (who the court says is right) works exactly the same whether you're dealing with a smart contract or a real one.
> With a distributed smart contract, you can be sure that if you audit the deployed code, it cannot be changed without your knowledge.
This is not a benefit, this is just another problem that has to be solved, all you've done is replace a lawyer with a software analyst (who retains a lawyer for when they OK a smart contract that gets hacked), except it's also slow and expensive for the sake of decentralization.
> The contract is really more of a trustless escrow system. It holds the legal contract for all parties securely, and ensures that no single bad-actor can change it.
Centralized escrow systems already do this job fine. There is no lack of reliable escrow services.
> You don’t know that. If enough projects got funded this way-big if- lenders could buy, sell trade their positions.
It doesn't matter who is funding them, they have no liquidity because the government does not recognize tokens as units of ownership in property.
You’re right, centralized servers can execute the computations just fine. A reason people are excited about ethereum is that they have serious misgivings that the operators of central servers are truly ‘neutral’ parties. With distributed systems built in blockchain, you can always audit the code before you enter a contract. I do not know of any widely-used centralized service that allows this.
Yes, a smart contract can execute a physical document. One way (of many) would be hellosign/docusign but running on ethereum main net. Of course this is only necessary if you want to produce a signature that looks handwritten (not essential for the doc to be legally-binding in the USA).
This has nothing to do with the merit of the argument.
> you provide no tangible argument other than ‘centralized servers already do this fine.
This is a strong argument because the cost of blockchain decentralization is extremely expensive so it has to provide a very compelling value to be worthwhile.
> Ever seen the clip of Ballmer talking about the original iPhone? He says it will fail because it’s slow, expensive and you can already send email using a blackberry. That POV has not aged well.
That's not a "POV", it's a criticism that can be applied to any expensive alternative, whether or not the criticism is accurate depends on the specific circumstances, so trotting out an example of when someone incorrectly evaluated the value proposition of the expensive alternative does not prove anything.
Additionally, this entire reply is a complete red herring because this discussion is not about the potential future successes of blockchain technology, it's about the usefulness of this specific example (selling blockchain tokens as shares of ownership in a property). The bottom line is that nothing is gained by using a smart-contract, but they are slow and expensive so using them is worse than a trusted centralized system.
In its current state, a smart contract sacrifices speed and cost but eliminates the need for trust. You may not value that as much as others, but it certainly doesn’t make blockchain ‘worse.’
And yes, I think the fact that all your comments disparage blockchain shows you may have simply already made up your mind.
WRT the OP, the question was ‘is this possible?’ I have shown that is technically possible to finance a home purchase via crypto tokens, assuming one can find interested investors. Whether the solution is of value to you personally is totally irrelevant.
Of course there is, what do you call the NASDAQ or the NYSE? Those are trusted centralized systems that work just fine every day and process more transactions than any blockchain can hope to acheieve.
> a smart contract sacrifices speed and cost but eliminates the need for trust
No it doesn't in any meaningful way. I need to trust that my tokens will be recognized as a legal share of ownership in the property, all the smart-contract can do is give me confidence that the tokens are not counterfeit or double-spent, but this is obviously a non-issue with our current centralized system. Nobody is concerned about counterfeit Apple stock. There is no benefit to using a smart-contract because it does not solve a problem (in this case). Are there situations where a smart-contract could be useful? Probably, but attempting to tokenize the equity of your home is not one of them and you've completed failed to demonstrate otherwise.
> That's a risk with any type of transaction,
No, it's not; particularly, traditional mortgages (the closest real world analog to your proposal) don't have this problem, because there is no hidden-until-default document transferring interwst, there is an interest of the named mortgage holder registered against the title record when the mortgage is initiated. This is a solved problem, but the desire to try to move things into smart contracts means you can't use the solution.
> but easy to verify with a good lawyer.
How is a lawyer going to validate that a deed PDF that can't be accessed until default is a valid document in advance of the actual default?
The pdf would be accessible anytime. It's free to read the state of the contract anytime. In the event of default, the pdf would be automatically executed and delivered to the parties. I'm not familiar with the notary requirements for a deed, but there are plenty of online notaries (you submit a picture of yourself and your ID). Also doesn't Opendoor already process deeds completely online?
Again, I think you do not have a clear technical understanding how smart contracts work. You can view the state of a contract for free at any time(unless otherwise specified). You can also validate the deployed contract against open source code. So yes, if you (or your lawyer) can’t understand solidity code you would need to pay someone to review it for you, but that seems surmountable.
Furthermore, a lender cannot easily trade or liquidate a mortgage without losing significant value. Foreclosures/short sales typically undervalue properties.
(Of course, the fact that a PDF will likely not meet the signed and notarized original requirement for property transfer is another issue.)
If you can get a jurisdiction to make the ledger on which the smart contract operates the legal source of truth for real property rights, it can work. For real existing jurisdictions without that, it's unworkable.
My point is that without something equivalent to a recorded interest, no sane lender is going to be willing to take the risk.
Beyond a certain point, the risk is so high that the premium for that risk will price out most of the potential borrowers not intending to exploit the giant legal vulnerabilities in the scheme, which drives the risk premiums higher, which narrows the pool of borrowed even more narrowly on ruthless exploiters, etc.
To make it reasonable, it has to be a remotely reasonable choice for legitimate borrowers and lenders compared to other means of borrowing, or other investments.
I can't think of any other way to invest and trade ownership online in properties you (the lender) curate. Yes, you can buy, sell, trade a REIT, but you are reliant on someone else to select the properties.
Sure. I'm not saying no one would participate in this scheme in the short term, I'm saying if implemented it would quickly collapse in a storm of abuse.
> I can't think of any other way to invest and trade ownership online in properties you (the lender) curate.
Yes, but the reasons no system for that exists don't have anything to do with anything that smart contracts solve (again, unless they are legally replacing title registers.)
If the owner sold the house and did not share the profits, he would be in default and would get sued.
>the reasons no system for that exists don't have anything to do with anything that smart contracts solve
Smart contracts allow you to easily tokenize and trade assets.
I dunno. The truth seems pretty helpful. Not pleasant, perhaps, but that's a different story.
> What if they created a smart contract that held a signed pdf of the title deed (turning over the property to the token-holders) in the event of default?
Default of what? This isn't a lease contract, it's sale of a non-possessory interest that entitles token-holders to a share of the value price when the token-seller transfers it. The only time a failure of required payment could happen is after a transfer of title to some third party.
> Thoughts?
As well as likely not working legally for a number of reasons (if they can't access the deed until default, they also can't validate the deed until default, plus the problems with an unrecorded presigned transfer deed that isn't delivered until default, although the particular problems depend on the form of the deed, plus the fact that the unrecorded (in title records) encumbrance does not stop the recorded owner from burdening or disposing of the property adverse to the interests of token holders), your rental scheme isn't what the OP was seeking, which is to sell rights which give an interest only on the value at transfer.
So you've proposed a system which doesn't work for what you intend, and which even if it did wouldn't do what the OP wants.
I agree, this is a nonstandard legal structure but that doesn't mean it wouldn't work. As I understand, the OP’s goal is to raise money to buy a home, and securitize with an ownership in the home in the event OP cannot pay back what he/she borrows. He/she also wishes to offer funders the ability to liquidate/trade their token.
You're right, the owner could sell the house and keep 100% of the proceeds, ignoring the token holders. She would then be in default, the smart contract would automatically execute the legal document, and the new owners could then sue the original owner. You could even set up a listener on the contract to monitor the public record for sales of the specific property to automatically trigger the 'default' function in the contract.
Before you ask, it would be the responsibility of the lender to verify the code in the contract actually does this, but it's totally possible.
The truth is that you don't understand the objection. And, AFAICT, even the rudiments of real property transactions.
> All elements can be verified and validated against open source code using the contract’s Bytecode and a contract verification tool like etherscan.
I'm assuming the contract is flawless. It's the PDF deed that needs to be verified as legally sufficient before initiating the deal without actually being delivered to the person who must verify it until default that creates an insurmountable verification problem in your scheme.
And that's leaving aside the legal sufficiency of such a document in the first place, and leaving aside the question of what form such a deed could take.
As I understand, your objection is that current systems are OK, therefore we should not discuss blockchain-based solutions. You’re right, I do not understand that objection.
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ME: I'm 32 years old and I have done nothing, life is starting to scare me. So I'm not here for a scam or call it whatever you like! For 18 years of my life, I have been working in 8 hard workplaces since my 14 years of age I helped my mother maintain my two wonderful sisters. I know what is a hard job! You won't be the one who will judge me on my self-esteem! By my Linkedin profile, you're definitely gonna choke. Who am I to show you what can I do. I never planned to be a millionaire! I just want to take care of my wife and dear daughter.
Here's what I have outlined and offering to you. Forget the SEC and all the regulations that you know! JUST STOP IT !!!
We offer half of our property = 11ha Divide him into 10,000,000 shares, if you even want physically presenting a registered LLC / LTD when the company's capital is a real estate that is distributed. We Create token, ICO, shares or whatever you want! I will call it Secret Trees Garden trust So, each of these parts STG Trusts is sold at 0.50, - EUR cents for you, founders. the total amount is 5 000 000 EUR!
Forth. We offer all 22ha! also, the remaining part of our own which will not be divided, but separated from the detailed plan! We invest these funds in the capital by placing x30 from dubldom.ru! 2.65 designed cottages for rent, tourism, rest, holiday houses! The idea is to add all sorts of extras for profit as well Hot Tubs, Saunas, Active Sports, Water Sports, All that can bring us Profit! Create Crypto Holidays Camp! Our property is located in the city's territory and our municipality supports us in creating tourism.
Payouts. Twice a year paying dividends. from total NETO from all profit makings. We pay 70% of the earnings to each token holder of the STG Trust. 30%, we continue to invest in the capital, to raise the 11ha by buying neighbor's property's and add it to the founders.
Thinking about Token, ICO Value and its Usage? I do not care how much this coin will be worth after! Although 0.01 euro cents! STG Trust will be just as valuable to me! Why?! So when I paid back the same amount that I bought! She will be just as worthwhile as possible to get into contact with us, as well as locals - 40,000 will be of the same value as 0.50 Cents sold locally. Consider it as a member of the club who makes more cash by owning more of them! I understand you cant realize this project and know what it will take!
I plan to work on this project for rest of my life and I don't think of letting it down! Try to Understand the property after 30 years been profitable x2 profit and if, however, you decide to sell, please! 11h +, which was split into some of the current moment of the token that everyone owns by hes % to divide it into dividends! We can even sell for each individual parts! We can make even trust due to date, 30years? I suggest you work with me to be in the team to create such a project. I repeat I do not have a doctorate or a lawyer, a programmer's diploma! here you can find all the data, planings and my contacts.
leave your skepticism for shitBMW clubs!
It's hard to believe but to do is harder! Trust is it.
Solves the 'getting priced out of the market' bit brilliantly assuming he can find enough suckers to fall for this grand scheme.
--edit--
It's actually a double-plus brilliant plan.
If he manages to pull this off he sells the house for full price then buys back the tokens at a fraction of the value once the investors realize what a bad investment it is to let someone live for free in their house.
If you put those sentences together into a paragraph as if they are are continuation of a single idea or topic it would sound insane.