In The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (2000), Peruvian economist Hernando de Soto argued that the underlying cause of Third-World poverty is weak property rights. Citizens of poor countries can't securely develop plots of land or put them up as collateral because they don't have clear legal titles.
In a world "where ownership of most assets is difficult to trace and validate and is governed by no legally recognizable set of rules," de Soto wrote, "most assets, in short, are dead capital."
De Soto is now part of a new initiative to use the "blockchain," the technology that undergirds the digital currency Bitcoin, to solve the dead capital problem.
The San Francisco-based Bitcoin company BitFury announced last week that it was working with de Soto and the Republic of Georgia on a project to use blockchain technology to build a new land registry, as Forbes first reported. "By building a blockchain-based property registry," one Georgian government official said in a statement, the country "can lead the world in changing the way land titling is done and pave the way to additional prosperity for all."
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