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Preventing Rental Fraud with Blockchain [Hello, Blockchain]

HANKYOREH  2024-05-12

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Kim Ki-man | Former Deputy Editor at CoinDesk Korea

There has been an increasing number of attempts to utilize blockchain technology in the public sector recently. Based on the characteristics of blockchain, which prevents the falsification and alteration of information and allows anyone to access the ledger in real-time, the plan is to enhance societal trust. It is particularly expected to help prevent rental fraud, which has become a significant social issue.

The Judicial Administration Office recently received a report from the blockchain company ZCrypto on 'Introducing New Systems for the Protection and Enhancement of Registration Information,' which includes plans to adopt 'public blockchain' to overcome the limitations of existing document tampering prevention systems and prevent various real estate frauds.

Currently, the Supreme Court uses a forgery detection program to protect the registration and deposit systems that issue various certificates. However, this method is cumbersome to use and lacks transparency since only specific authorized individuals can perform verifications, leading to critiques about its openness. This loophole has led to crimes such as document forgery and identity theft.

For example, a real estate seller could previously take out a loan using the property as collateral by obtaining a title document in advance and forging the date at the bottom of the document to deceive on the contract day as if there were no mortgages on the property. However, in a blockchain system, since the registration information is updated in real time even if the document changes, such time-gap attacks can be defended against. Issues of verifying post-issuance modifications are expected to improve.

Local governments are also continuing efforts to integrate blockchain technology into administrative tasks. Busan Metropolitan City, designated as a blockchain special zone, is building the Busan Resource Volunteer Bank based on blockchain. This system is structured as a platform where individuals can exchange volunteer services. Users can post on the app the volunteer services they want to offer or receive, facilitating the exchange.

Recipients provide the provider with basic points per service, which are stored in the electronic wallet of the volunteer's app and can be used to receive services from others. Points can be used for purchases or discounts at online malls selling sponsored products from local businesses, at performance venues, parking lots, and can also be donated to others. Data related to this is stored using blockchain technology, preventing the leakage of personal information.

Incheon Metropolitan City is contemplating the use of blockchain technology in the tourism industry. It plans to build an I-SUM (Island SUM) Pass based on blockchain to promote island tourism and ensure the safety of travelers. With Distributed Identity Verification (DID), secure identification is possible without alteration, allowing timely responses in emergencies and reducing the risk of personal information leakage.

Daegu Metropolitan City has developed the first blockchain mainnet by a local government. It plans to enhance a nursery school integrated monitoring platform based on blockchain. Recording nursery school attendance histories on the blockchain makes it impossible to tamper with arrival and departure times, which could prevent fraudulent subsidy claims. It also plans to implement blockchain-based electronic prescriptions in collaboration with local hospitals and pharmacies. This will reduce unnecessary paper use and prevent the duplication of prescribed medications.

The blockchain-based administrative systems currently being experimented with in South Korea are still in an experimental phase, but they hold significant meaning as a process to enhance societal trust using technology. Rental fraud is a severe issue that causes substantial damage during real estate transactions. The adoption of blockchain technology is expected to prevent such fraud and increase the safety and transparency of real estate transactions. It's a critical time for government and relevant institutions to actively review and endeavor to implement this technology.

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