“The bitcoin network is much more than a currency.” I’ve heard that over and over from bitcoin enthusiasts. So I decided to explore the technology from the perspective of an educator, entrepreneur, and attorney. My goal is to find ways to use the technology to reduce cost and risk to clients, increase autonomy in the legal process, and educate the community (including other lawyers) about what I find. Here’s an article about using the blockchain technology to prove existence of a document.
Using the Blockchain to Prove Existence of a Document
Proving the existence of data at a certain point in time can be very useful for educators, entrepreneurs, and attorneys. Timestamping data in an unalterable state while maintaining confidentiality is perfect for legal applications. Attorneys (or clients) can use it to prove the existence of many documents including a will, deed, power of attorney, health care directive, promissory note, satisfaction of a promissory note, and so on without disclosing the contents of the document. A person can use the blockchain timestamp to prove that a document (like a will) they will be presenting to a court in the future is the same unaltered document that was presented to the blockchain at a prior point in time.
So how does it work? In simple terms, the document is presented to the site. The site doesn’t copy the content of the document but instead converts the contents to a cryptographic digest or hash (which is geek speak for really long string of unreadable numbers and letters). That hash represents the exact contents of the document presented. When the same document is presented again, the same marker will be created and therefore provide verification that the documents are the same. If, however, the document has changed in any way, the new marker will not match the previous marker. This is how the system verifies the document.
There are a number of organizations currently providing this service, some for free, some for a small fee. Reddit has a fairly robust thread on these services.
I tested the Proof of Existence service, on both February 19, 2014 and again on March 11, 2014, to see if it was viable to begin using for my current clients. According to the proof of existence website, common uses of the service include: (1) demonstrating data ownership without revealing actual data, (2) document timestamping, (3) checking for document integrity. Each of these are explained in greater detail on the website and each appear to be similar to those benefits offered through other similar services.
Testing the Proof of Existence Service
I went to proofofexistence.com and selected “Upload” from the menu at the top of the page.
Then I selected “Browse” from that page and quickly uploaded my document to the server. While the document was uploaded for free it wasn’t yet included on the blockchain. Proof of Existence charges a small fee of 0.005 bitcoin to include a document in the blockchain permanently. I don’t believe the fee is dependent upon the size of the document, therefore you could place all of your documents in a single PDF (more on that later) in order to pay only one transaction fee. The “Pay with Bitcoin” button is linked to coinbase, a custodial bitcoin wallet service. If you have a coinbase account you can login directly, if you don’t have bitcoin you can also open an account through this link. You can use other wallet services. I use the non-custodial wallet at blockchain.info for my transactions, so that’s how I chose to pay.
I paid the fee, which converted to roughly $3.15 USD plus $0.06 as a miners fee. The cost seemed reasonable, even less expensive than I thought, particularly considering the value of assuring document integrity in a legal setting.
After completing the transaction, Proof of Existence waits for confirmation of the transaction. This is a best practice in merchant transactions.
A few seconds later (after a page refresh) I received the following congratulatory message:
So what now? You can verify the existence of the exact document you’ve saved on the blockchain. How? There are three ways: (1) you can look in the transaction record to see the document information output as part of the transaction, (2) you can follow the links in the congratulations message to verify the chain, (3) you can upload it again, which is how others (like a judge or another third-party) would verify that the document you’re presenting matches the previous document exactly. Test the verification by upload method with this PDF ProofOfExistence-EmpoweredLawTest.
What did I learn? Always use PDF, text, or some other unalterable document format. I’m a bit embarrassed to admit that the first time I tested the process I uploaded a document from a word processing program. That’s a mistake because word processing programs add metadata to the document. One excellent feature of block chain verification is that the document must match exactly. Document + extra metadata = no match. I did know better than that and now you do too. Be sure to save your file in an unalterable format, such as a pdf or text file, and close it before you upload it to the blockchain. Then save the document where you will be able to retrieve it without modification. Remember, just as in the physical world, you must have the document to present to the court, so store multiple copies safely.
All in all using proof of existence was easy, fast, and inexpensive. The time to upload was seconds and the time to verify was even shorter. I plan to use it for my clients. Maybe you’ll decide to use it too.
Bio: Pamela Morgan is an attorney, educator, and entrepreneur exploring the intersection of the bitcoin technology and the practice of law. She is focused on finding ways to use the technology to reduce cost and risk to clients, increase autonomy in the legal process, and educate the community (including other lawyers) about her findings. Her Chicago based firm, Empowered Law, accepts bitcoin for payment and provides advice to entrepreneurs within and outside of the bitcoin community. Contact her directly for speaking or collaboration requests.
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