The coloured coins technology innovator ChromaWay has built a smart contracts application to massively streamline Sweden's paper-based and time consuming processing of real estate transactions.
The Swedish Land Registry, telco incumbent Telia and Kairos Future are also part of the blockchain-based real estate transactions proof of concept. A white paper and a technical demo showing the solution and the benefits for society have also been released.
ChromaWay and Estonia's LHV Bank created an award-winning Euro-based national payment solution based on coloured coins. But this latest project represents a new direction for the technology team.
Henrik Hjelte CEO ChromaWay told IBTimes: "For this project we are not using the coloured coins technology. We have a new solution for smart contracts and we can make it independent of the underlying blockchain - it could be based on a public blockchain, like Bitcoin or Ethereum, or a private blockchain.
"What we are doing is modelling the workflow of selling a house. The buyers, sellers, land registry, real estate agents: they all see the same information. Only the parties involved can see the information, and need to see it."
A digital identity system is administered by Telia, and digital signatures are used to verify all the steps in selling a house. This is normally a time-consuming, repetitive business which involves two main processes.
The first part which completes the signing of the contract via the bank and real estate agent can take a couple of week; the next process involves the Land Registry and the bill of sale. "It's around three months between these two main events," said Magnus Kempe director retail and finance at Kairos Future.
The first process involves an up-front payment from the bank, and the signed contract being sent back and forth by regular mail, and the bank then sends the money to the real estate agent. The new technology allows this part to be done in real time, or even remotely in the future, added Kempe.
"What is really striking is that the land survey only registers the transaction for the first time something like four months after the actual legal binding contract. This means that no official authority has any information on this contract until four months after. We will shorten that time to like a week," said Kempe.
People tend to think of Estonia as the digital identity governor in Europe, but apparently Sweden has a large acceptance of digital signatures, involving things as diverse as taxation and maternity or sick leave, for example.
As an administrator of digital identity, Telia can also bring a number of professional applications to the table, such as digital identification relating to health care providers; the regions in Sweden that manage the public healthcare, with patients' registries etc.
Hjelte said ChromaWay's technology was ready to integrate with other vendors and can be applied to other use cases. "We have some interesting features that allow private information in smart contracts - something called 'client sign'.
"For us the default is that information is executed by the parties involved in the contract. Then the smart contracts can be integrated with various blockchains that can provide evidence; Ethereum could be one of those blockchains; bitcoin could be another.
"For this concept we have used our own private blockchain, but one of the good things is you can basically mix and match the features that you want for your particular application," he said.
The proof of concept will be followed up with more project development. Landshypotek Bank($7bn AUM) has signed up and other banks are expected to sign up with a view to participating in the autumn.