Record Keeping Makes a Difference
By Anthony Culligan, SETL Chief Engineer
One of the things that drives me to continue our development at SETL is the understanding that ledgers of asset ownership are not only an everyday part of commerce but are an essential element to the social fabric of communities. Almost every aspect of social interaction involves the exercise of a right. Opening your front door when you come home from work, driving your car or buying a coffee are all rights which you exercise which depend upon ownership. The acquisition, exercise and disposal of those rights are the essential freedoms that we exercise as citizens. At the heart of those freedoms are ledgers.
An examination of injustice and poverty reveals a breakdown in a fair participation in this system of rights. It is no accident that we think of the plight of the ‘dispossessed’ and that a lack of possession as a dire state. In extreme, an inability to even prove your own identity strips an individual of the basic access to any form of personal rights and the freedom afforded by those rights. A lack of personal freedoms can lead to abuse, slavery, poverty and powerlessness.
It is in this context that blockchain provides the means to empower individuals and communities. It allows for more abundant and efficient ledgers which in turn lead to greater access to rights of all kinds. It does this by allowing the mutual acknowledgement of ownership and a standardised and trustable means of transferring ownership.
The fact of ownership provides for the deployment of capital and facilitates the savings and investments mechanisms of society. None of this is possible without the recording of ownership. Hernando de Soto Polar, the Peruvian economist identifies the following benefits from having reliable ownership records;
- Clear, provable, and protectable rights;
- The standardization and integration of property rules and property information as a whole;
- Increased trust arising from a greater certainty of punishment for cheating in economic transactions;
- More formal and complex written statements of ownership that permit the easier assumption of shared risk and ownership in companies, and insurance against risk;
- Greater availability of loans for new projects, since more things could be used as collateral for the loans;
- Easier access to and more reliable information regarding such things as credit worthiness and the worth of assets;
- Increased fungibility, standardization and transferability of statements documenting the ownership of property, which paves the way for structures such as international markets for companies and the easy transportation of property through complex networks of individuals and other entities;
De Soto proposes no community can have a strong market economy without adequate participation in an information framework that records ownership of property. Unreported, unrecorded economic activity results in many small entrepreneurs who do not have legal ownership of their property, making it difficult for them to obtain credit, sell the business, or expand.
Informal or unrecorded ownership, De Soto points out, lacks legal remedies to business conflicts in court, since they do not have recognised ownership. Further, lack of information on income prevents governments from collecting taxes and acting for the public welfare. A person living in a favela may have de-facto ownership of their home but they cannot participate in society in the same way as a suburban dweller.
At SETL we are focused on financial ledgers. Those ledgers record the ownership of money, stocks, bonds and other securities. Our technology strives to be the most performant and secure in its class. We embrace the new world of cloud computing, api’s and identity technology in building our solutions. Whilst high frequency trading, contactless payment and financial apps are all features of the new financial landscape, behind the scenes the essential ledgers of ownership remain arcane. They are complex, different and difficult to coordinate. SETL’s aim is to create ledgers that are easy to establish, inexpensive to maintain and provide certainty and security in what they record. The benefits of our doing so are not just the savings that institutions can make in deploying better and cheaper technology – our real reward is that we enable society to empower individuals through ownership.
Record keeping is essential to the prosperity of societies and to the individual freedoms that we all enjoy. SETL is proud to be at the forefront of ledger innovation.