Chaining Property to Blocks – On the Economic Efficiency of Blockchain-Based Property Enforcement

Within the last two years, much has been written about the blockchain and distributed ledger technologies. However, few actual use cases related to real world phenomena have been proffered in that literature. Most applications remain entirely in the virtual world or their descriptions remain on a very abstract and speculative level. In this paper we study one possible application on the powers of blockchain technology to real-world problems. In particular, we study the economic feasibility, effectiveness and efficiency of blockchain-based registries for property of chattel and the technical enforcement of the rights listed in such registries. For the example of smartphones, we show that their, and their owners’ registration in a blockchain may achieve a most desirable results from registration, theft becomes less attractive. An additional advantage, which we also briefly touch on, is that the use of smartphones as collateral without possession may become possible. We study under what conditions the benefits from registration is feasible in a blockchain-based distributed ledger and why they are not implemented under less complex technologies such as registries owned and administered by producers of smartphones.