[Yizahi]

This is impossible. Basically you MUST have a centralised DB at the municipality storing all the data at before (because it is impossible to do so on chain, due to chain tech limitations). Plus you have a useless NFT chain on the side, where NFTs are primitive URLs to the centralised DB (CDB). Even more - they are one way links. So that CDB doesn't know anything about blockchain state and NFTs. Next problem - no person owns NFTs, they are owned by wallets. Therefore these wallet must be deanonimised and registered at the municipality and in the CDB, so that there is at least one place to show who owns a deed.

Now some potential scenarios:

1. A sells deed to B. So now they do in on chain and NFT is sold from wallet X to Y. All of that is registered in the CDB and confirmed with paper documents, contracts and stuff. Maaaybe that can work, but as we see NFTs are useless fifth leg in a horse here.

2. Inheritance. Deed is inherited by law by person C (with or wihtout wallet Z), but chain doesn't know about it and thinks wallet X still owns NFT. CDB has actual data and overrides "wallet X" line, so that chain now useless and outdated.

3. Law enforces deed transfer from A to B. Again, NFT is not sold and chain is not updated.

The list of situations can go on and on.

And last note - these so called "dapps", which are neither smart nor contracts, are the most stupidly delusional thing you can introduce into a valuable commodities market. Only people not familiar with the scale and rate of exploits caused by usage of these dumb and badly designed programs can suggest it. Or the one profiteering from this. Phishing is over the top and even experienced users at r/CC are regularly losing everything due to a single click mistakes. This is not how housing market worked and will work. Not how any market works actually.

[ahnick]

No, it's not impossible. You don't need to store all state on chain. You will just need to store a hash of the off-chain data on chain. The supplemental off-chain data can be stored in standardized storage systems, which they themselves might be highly distributed and standardized. (e.g. IPFS)

[illiarian]

> You don't need to store all state on chain. You will just need to store a hash of the off-chain data on chain. The supplemental off-chain data can be stored in standardized storage systems

It amazes me how people say this with straight face. "Just store all the data off-chain!". Then the chain isn't needed.

[ahnick]

I'm not sure how you made that jump in logic. The chain is absolutely needed as it stores and establishes cryptographic proof of ownership. This is the entire premise behind validity rollups for layer 2 networks.

[illiarian]

> I'm not sure how you made that jump in logic.

What jump? You literally said that all the data is stored somewhere else.

> stores and establishes cryptographic proof of ownership.

It stores some unenforceable token that is only valid as long as those who actually enforce ownership agree that it proves anything.

So:

- all data is stored elsewhere, on centralised servers

- proof of ownership is enforced by centralised entities (governments, courts, police, etc.)

Great application of blockchains.

[ahnick]

> You literally said that all the data is stored somewhere else.

No, I didn't. The NFT would be stored on chain and inside the NFT would be hash of the data that is stored off chain. Anyone can then source the off chain data from any location and then compute the hash of that data and compare it with what is stored on chain.

> It stores some unenforceable token that is only valid as long as those who actually enforce ownership agree that it proves anything.

This is no different than any other system. What makes that Oracle database that your property assessor uses to store your parcel information in enforceable? Oh yeah, the government.

[illiarian]

> > You literally said that all the data is stored somewhere else.

> No, I didn't... NFT would be hash of the data that is stored off chain.

Yes. You literally said all the data would be stored somewhere else.

> This is no different than any other system.

If this is no different than any other system, then it has no benefits of any other system.

> What makes that Oracle database that your property assessor uses to store your parcel information in enforceable? Oh yeah, the government.

Indeed, the government.

Who makes your fantasy tokens referring to physical objects enforceable? Oh right. No one.

[JohnFen]

> The NFT would be stored on chain and inside the NFT would be hash of the data that is stored off chain

Ok, but what's the benefit of doing that?

[JohnFen]

> as it stores and establishes cryptographic proof of ownership.

But if the entity that is charged with keeping track of who owns what needs to keep a central database anyway, what value does keeping the ownership records elsewhere bring? I see doing that as accomplishing nothing but increasing the number of things that can go wrong.

When it comes to things like real estate, the "proof of ownership" is completely without meaning unless you also have the extra data beyond that. Things like where the land is, what the boundaries of the property are, etc.

[Yizahi]

The hash literally changes nothing except for maybe verifying integrity of the data, and that is debatable. Add hash in the examples above and literally nothing will change. You can't just throw technojargon term at everything and see where it sticks.

[ahnick]

The hash is critical as it is what enables you to verify that the off-chain data is correct. What exactly did you think was technojargon? I'll be happy to elaborate.

[Yizahi]

That's I wrote. Sure, it enables data integrity (maybe, but let's be charitable). Now what? How does the fact that token knows about external data prevents that data from being manipulated if needed? Or do you propose banning inheritances, lawsuits and other actions which apply to the real world artifacts just because blockchain can't deal with that? :) That won't happen.

[ahnick]

It doesn't prevent the manipulation, but it does assist in detecting it. If someone manipulates the off-chain data, then when that off-chain data is hashed and re-verified against the hash stored in the NFT on-chain then there will be a mismatch in the hash values.

Let's suppose that the off-chain data is a PDF containing all the information for the property deed. If the hash values don't match then it means the PDF should be disregarded. If the off-chain data was kept in multiple locations, then one could potentially still retrieve a good copy of the PDF whose hash matches and then can be trusted.

Now, just because a blockchain can be used as the system of record for property deeds does not mean one wouldn't need to still have laws and other organizations enforcing that system of record. The blockchain is just a tool that makes some aspects of the record keeping easier and opens up some interesting possibilities as I've outlined in other comments of this thread.

[Yizahi]

We don't need detecting unwanted manipulation (clarification, we do, but that is a small and rare problem), we need to deal with expected manipulation. Let's say I was phished and some tokenbro across the globe now owns the NFT with a deed to my house, initially this info also got propagated into the centralised DB with stores actual data with deeds and related stuff. I go to police, then to the court and they reaffirm my ownership of the house. Then they restore correct information in the CDB. Now everything is all right, excep that blockchain is now outdated and show a tokenbro as an owner of NFT pointing to deed for my house, and hash is of course not matching now. Now what? Code is not law (surprise), and blockchain doesn't override laws. It is technically useless for this task.

[popcalc]

Why not just check the off-chain database and sidestep the hash stuff in the first place?

If the off-chain data is "incorrect", what are you going to do? Can anybody mint those NFTs? What's the point then? The government is the only one who can kick you out of that house irl.

[ahnick]

Since the on-chain hash is part of an immutable object that no one can change, then anyone can use it to verify that the off-chain data is valid at anytime. (No one needs to go ask someone else whether it is valid they can check for themselves) If the off-chain data was found to be invalid, then a correct version of that off-chain data would need to be provided or a process would have to be developed that would handle exceptions where the document is no longer available and now a new NFT would need to be minted.

The minting process could be managed by the government or some entity using an on-chain contract or it could just be a manual process that the government does in conjunction with banks. The enforcement of the ownership records would still be held with the government. The point of having property records as NFT on-chain data is it enables easy to verify ownership of property records, transparency/auditability of property records, and easy transfers of property records to new owners.

[JohnFen]

> then a correct version of that off-chain data would need to be provided

Correct, which means that there has to be an ultimate source of truth that everyone agrees on that is independent of the blockchain. Which means there has to be an authoritative central agency of some sort to handle that. Which means that the blockchain has not, in fact, accomplished the stated goal.

[JohnFen]

It's possible to intentionally alter data that a hash has been computed from in such a way that it still computes to the same hash. Hashing alone is a weak way of ensuring that data has not been altered.

[ahnick]

It is extremely hard to break cryptographic hash functions to the point it is considered impossible. If you could do that, then you could be breaking into all sorts of systems. Cryptographic one-way hash functions are actually the preferred way to secure passwords.

[JohnFen]

It isn't trivial, but it's not as hard as you make out. In the case of real estate which is often worth a great deal of money, plenty of people will be willing to put the effort in to do this.

> If you could do that, then you could be breaking into all sorts of systems.

Absolutely. And this is one of the methods that is used to do just that. I'm not talking about a theoretical security issue here, this is a weakness that has been leveraged in the real world for a long time.

> Cryptographic one-way hash functions are actually the preferred way to secure passwords.

Yes, but they're also not considered bulletproof. They're a bit of a compromise effort. That's why the leaking of password files is considered a security problem even when the passwords are salted hashes.

And, like with password hashes, it's not actually necessary to break the hash in order to alter the hashed record while maintaining the same hash. There are mathematical shortcuts to doing this, but you can even just brute force it if you have enough computing power or time.