Reshaping the Global Poverty Narrative One Block At A Time
Over the years, economist Hernando de Soto has relentlessly advocated for the construction of a global property registry system to address the property rights of citizens throughout the developing world. Now in a groundbreaking development, de Soto and Overstock founder Patrick Byrne have forged a joint venture to address this pressing public need.
The new company De Soto, Inc. brings together de Soto’s decades worth of property rights advocacy at the Institute for Liberty and Democracy (ILD) and Overstock subsidiary Medici Ventures. The latter will deliver a body of blockchain expertise to build solutions that empower individuals through recognized property ownership.
De Soto, Inc. is currently developing a blockchain-based solution utilizing mobile applications and social media integration to bring to light the thousands of informal ownership record that exist in communities worldwide. It is hoped that this will create a global repository on which ownership and transfer can be based.
This system aims to promote the interests of people who are currently operating extra-legally, as well as multinational corporations who are trying to cooperate with local owners. The company expects to launch its first pilot program in early 2018.
Says de Soto in a public statement, “I envision a world in which people with rights to their property and business assets pull themselves and their communities out of poverty.”
He goes on to note that about 80 percent of the world’s population is unable to enter into the modern global economy due to lack of visible and standardized property records. Billions of people, he says, have resources that cannot easily be transformed into productive capital. Blockchain technology asserts de Soto is a powerful tool to solve these structural issues, which are some of the principal causes of poverty and conflict.
When it comes to real estate, the poor in developing countries own a staggering $14 trillion in assets, what de Soto refers to as “dead capital.”
In Peru alone, untitled real estate assets amount to $74 billion in value that Peruvians cannot use to establish creditworthiness or leverage as collateral for loans. Lacking formal ownership and the legal protection it affords, citizens of the developing world may turn for protection to terrorist organizations, who gain power by promising enforcement of de facto local property ownership.
Byrne, CEO of Overstock.com and founder of its subsidiary Medici Ventures, has been a longtime advocate for bitcoin and its underlying technology. His company is widely considered to be the largest online retailer in the world to accept bitcoin.
Says Byrne in a public statement:
“Working with Hernando de Soto is the honor of my lifetime. His work has demonstrated that secure ownership of property is a catalyst that sets into motion the engine of progress, creating enormous wealth in the process. From my first public talks on blockchain, I emphasized that blockchain’s application to property could lift billions out of poverty. Hernando and I intend to use blockchain technology to empower and enfranchize the five billion people who live outside formal economies within five years.”
Launched in 2014, Medici Ventures is a wholly owned subsidiary of Overstock.com, Inc., created to leverage blockchain technology to solve real-world problems with transparent, efficient and secure solutions. Medici Ventures has a growing portfolio of groundbreaking blockchain-focused investments, including t0.com, Peernova, Bitt, SettleMint, Factom, and IdentityMind, Spera, and Symbiont.
As covered by BTCManager, Medici’s s majority-owned financial technology company, t0.com, executed the world’s first blockchain-based stock offering in December 2016.
“One of our main missions is to democratize capital to help the poorest members of society participate in global markets,” said Jonathan Johnson, president of Medici Ventures. “Hernando’s work proves that implementing policies to surface and protect property rights undermines terrorist organizations and promotes the prosperity of those who were previously forced to operate outside the formal economic system. Blockchain can solve this problem. It’s great to be partnering with Hernando to bring this vision to reality.”
De Soto is founder and president of the Peru-based Institute for Liberty and Democracy, considered by The Economist to be one of the two most important think tanks in the world. In the last 30 years, de Soto has been designing and implementing legal reforms to empower the poor in Africa, Asia, Latin America, the Middle East, and former Soviet nations through programs that grant access to formal property rights.
De Soto has been written of as “One of the 12 Most Important Economists in the World”. He won the prestigious Milton Friedman Prize in 2005, was listed as one of 15 innovators “who will reinvent your future” according to Forbes magazine’s 85th-anniversary edition, and has been described by Bill Clinton as the world’s most important living economist.