With blockchain one can divide up any object into countless pieces and sell or rent out these pieces, and keep track of everything in a way that is as safe as the old-fashioned land registry, but infinitely cheaper. All the buyers of these pieces become co-owners of the object. The blockchain does the work; from making and receiving payments to managing decisions on the future of the object. Everyone can invest like this.
How does it work? Let’s take André Rieu (a famous Dutch fiddler) as example. He finally wants to play his ultimate Stradivarius. Which costs EUR 10 million. A unique instrument. With a drum kit and the Stradivarius, his millions of fans will help him get a top turnover. Small problem: Rieu kinda doesn’t have the money… But his fans do. The instrument is being linked to the blockchain. His fans buy pieces of the Stradivarius. One million Dutchmen take part with EUR 10 each. Everything is recorded in the blockchain. As owners of the violin, the fans receive rental or royalties from Rieu. Paid and administered in the blockchain. The fans will vote on, say, the maintenance of the violin through the blockchain. And if Rieu quits bowing at some stage, the fans will sell the Stradivarius on. And collect their profit…
Or let’s take a new Rembrandt. The Rijksmuseum wants to acquire it, but doesn’t have the money. The blockchain makes it possible. The blockchain owners give the painting on loan to the museum for a period of ten years and then sell it on…
And the law? At first sight, civil law seems equipped for this new challenge. From ship-CV’s to buying a barrel of whisky: participating all together: it’s of all times. There does need to be a precisely worded agreement in order to steer clear from the perilous nooks and crannies of our property law. That agreement? That’s recorded in the blockchain. Noblesse oblige…
That is, at first sight. Right now, house-sellers, for instance, remain in limbo in the blockchain. Through the blockchain they sell pieces of the economic property of a house and divide the rental income over the many buyers. This economic property is separated from the legal (physical) property. Logically so: the land registry could never register hundreds or thousands of individual owners cost-effectively. But ‘economic property’ is not real ‘property’, as every lawyer knows. And that constitutes a risk for the buyers. Especially when the (overly) ambitious seller goes belly-up.
Moreover, something is missing: that the Stradivarius is recorded in the blockchain only means that all owners who participate in the blockchain can prove their participation in the blockchain. Not that the Stradivarius really was the property of the seller. Nor that he didn’t buy a much cheaper fiddle. And it also doesn’t mean that Rieu, short on money from the high interest/rental costs, can’t just go and sell the Stradivarius and pocket the money. Somebody needs to establish the connection between reality and the blockchain. And exactly therein lies the risk.
That brings us to the issue of government oversight in this new world. The AFM still needs to deal with the blockchain. Which oversight? What kind of oversight? Do we need oversight? Before that’s all been decided, the world will inexorably have changed to such an extent that the regulators will have to settle into that new reality, reluctantly or not.
Because I also want a piece of the Stradivarius. I want a piece of Rembrandt. And of Van Gogh! A piece of Manhatten! All of a sudden, we can all be a bit of a capitalist. From as little as a few euros a month.
Jetse Sprey
All articles