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Notarization in Blockchain:
Use Cases for Notary
Table of Contents
Notarization is an official fraud prevention process that guarantees the parties to a transaction that the document is genuine and can be trusted. The blockchain allows keeping records in such a way that they cannot be edited or deleted. It does not require the liability of a third party — an intermediary, a person you need to trust. It is important that you automate proceedings of verifying the documents and signatures, so as to keep you safe from future disputes.

In this article, you will find out about the blockchain-based notarization service which can assist in the daily business activities, obstacles notaries usually faced and solutions that remote notarization platform can provide you with.

What is the notarization platform?

A remote notarization platform is a digital tool a notary needs to allow the notary or an organization with notaries to enable document owners to prove their ownership and protect rights, create contracts between the unlimited amount of parties, and have information on the latest signed document on the blockchain.

4ire Labs is pleased to present the Ethereum based DApp, a solution which will be your digital assistant in notary activities.

Ethereum based DApp is the solution you are looking for.

Ethereum based DApp is a remote notarization platform built on RoR, Web3, VueJS, Solidity technologies.

Who can use the platform:

B2C market players who want to create any type of document and sign it digitally via the reliable system on behalf of the verified user (using blockchain for data immutability)

How it works:
The document is certified by storing the SHA256 digest on a public blockchain in accordance with the definition of smart contracts.

A smart contract is a computer protocol intended to automatically execute, control, or document respectively legally relevant actions according to the terms of a contract, of an agreement or of negotiation, all the while making the process a lot less of a burden. Smart contracts allow to make trustworthy transactions without third parties. These transactions are trackable and irreversible.

Smart Contracts structure

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Smart Contracts structure consists of several objects:

1. Coordinator Smart Contract is responsible for

  • creating a Document Smart Contract using hash and document title
  • resolving the address of a Document Smart Contracts by hashing a document
  • storing the list of user's documents
  • register for all Document Smart Contracts
  • preventing the storage of a non-unique document on the blockchain

2. Document Smart Contract is responsible for:

  • signing a document
  • storing of all versions of a document
  • storing of all signers and related data
  • storing of timestamps
  • storing details about pending, rejected, approved and previous versions of a document

Data that can be obtained using smart contracts:

  • list of documents that belongs to a user's address
  • actual, approved, rejected, pending and previous versions of a document
  • title of a specific version of a document
  • signers and dates when it was done of a specific version of a document
  • timestamps
  • creator of a specific version of a document
  • time when a specific version of a document was finally signed

Specification on Verification flow overview:

After drafting the contracts, our demonstration takes the following steps:

  1. Certificate authority deploys its own contract.
  2. Certificate authority adds a CLAIM key to its identity contract.
  3. Consumer deploys his identity contract.
  4. After Consumer successfully passes the verification of identity, Certificate authority signs an identity claim for Consumer.
  5. Consumer adds Certificate authority's signed claim to their identity contract.
  6. Service Provider deploys its contracts for signing documents (Coordinator Smart Contract…).
  7. Consumer participates in Service Provider's storing and signing documents through their identity contract to Service Provider's contracts.
  8. Service Provider's contract confirms that the Consumer's identity contract contains a claim by a Certificate authority before any changes are made.

Signing process.

Each copy of the contract refers to one transaction in the real world. The Document Smart Contract is fully responsible for the signing process, linking the relevant data with the hash of the document and does not allow the participant to sign, store and create new versions of the document if he has not verified his identity and was not accepted by all participants that have already signed the document.

Usually, there are several roles in the signing process:

  • Consumer — one of the participants who takes part in signing the document.
  • Service Provider — an organization that provides service and infrastructure for signing documents.

Certificate authority — an organization that is accredited by Service Provider to verify identities and provide proof about them.
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The signing process

Identity verification process.

The main problems we encountered were: verification of the signature authenticity and assurance of the Party that the latest version of the signed document is immutable.

Each participant who was asked to sign a document must confirm his identity in one of the certification centers, which was accredited by the service that provides the opportunity to sign documents (Service Provider).

The identity verification process established using the proposed standard for blockchain-based identity ERC 725. ERC 725 describes intermediate smart contracts that can be managed with multiple keys and other smart contracts. ERC 735 is a related standard for adding and removing claims to the ERC 725 smart contract.

To verify the identity, the Certification Authority can work in tandem with any public eID services, such as NemId, BankId, Signicat, etc., or it can be eID itself if it supports the ERC725 protocol. After successful verification, the Certification Authority receives user identification information and stores this information in encrypted form on its own servers. Any personal data is not stored on the blockchain. The only hash of identification data signed by the key of the authority is stored as a claim in the Consumer identification agreement. Users pass the flow only once, so after a successful verification they can sign any number of documents. In the case when the user deleted the application, it is easy to track all the old information and find the claim value in order to find the identity at the time of signing the document.

Summarizing the information above, in a case of legal proceedings, a court can request parties' identities' fields in accordance with the formalities prescribed by law.

Verification.

To propose a new version of an existing document, one of the owners of this document must authenticate and must initiate the creation of a new version of the document. This action will call the method in the Document Smart Contract that is responsible for starting this process. The creator of the document automatically becomes the first owner, so he can invite new members to sign this document. If there is more than one owner of the document and you need to invite another member, all existing owners must accept the new signatory by signing the corresponding transaction. After initiation, all existing signatories will receive notifications of this and must sign a version to make it legal or reject if they do not agree with anything. All new versions are pending and are not legal until all owners have signed it.

Three statuses of a document:

  • Pending — document/version has been added, but not all participants have signed it.
  • Approved — all participants signed the document/new version.
  • Rejected — one of the participants rejected the document/new version.

After signing a document or specific version of a document, participants cannot cancel or change their decision. All previous signed versions of a document will automatically expire, and only the newest version is the knowledge base. Despite this, users have the opportunity to check them and get all the interesting details of previous transactions at any time.

In conclusion, it should be said that the document hash is controlled by smart contracts, so no one can delete, modify, or replace it. Using cryptographic algorithms it is easy to prove that the document file provided for verification is exactly the same document that is stored on the blockchain. Smart contracts are responsible for linking all data with the hash of a specific document, and this data is easily obtained using predefined methods in smart contracts.

Use-cases: Notarization in Blockchain.

Definitely, there are lots of obstacles that notaries are usually faced and we would like to share solutions to some of them:

  • Information on signatories and signatures may not be available from all over the world in the case of hardcopy documents;
  • Evidence that certain data exists at a particular point in time (proof of existence);
  • No existing systems allowing to establish the process of creating a new version of electronic documents and have a transparent idea of what is the latest approved version by all parties.

Information about signers and signatures may not be available from all over the world in case of hardcopy documents.

Solution:

Using public blockchains allows you to store information for an unlimited time, making a one-time fee. The immutability is the strength of the blockchain, which gives it high reliability. This means that they are intended only for creation, not for editing or deletion.

If you want to make any changes to the blockchain, you must create a transaction. All transactions are combined into blocks. The block must be mined before adding it to the blockchain. All blocks on the blockchain are connected (each block contains a hash of the previous one) and have timestamps and block numbers. Thus, you can always keep track of all the information in chronological order, like in an archive.

The most effective way to store a large amount of data is to create the checksum (hash) of the document you want to sign. Then, you can store it (hash) on the blockchain, and use smart contracts to establish interaction with it. All interactions with smart contracts (signing, rejecting, confirming versions, etc.) are linked with the hash of the corresponding document. It is designed to create all smart contracts without updated functionality, to avoid any replacements, and to achieve transparency. Thus, after the deployment of smart contracts, their behavior cannot be changed.

Since the data is unchanged and stored in a public manner, you can always make requests for relevant and reliable information.

Evidence that certain data exists at a certain moment of time (proof of existence).

Solution:

If you need to prove the existence of any file or document which was deployed on a remote notarization platform you can easily do this. Usually, such documents are not stored in our database or even on any blockchain, so no need to worry about personal information being publicly available. The cryptographic digest of the file (hash) associated with the timestamp at which you sent the document is saved. Thus, you can prove that the data already existed at that time.

The main advantages of using the blockchain in notarization are confidentiality and the receipt of decentralized evidence that no one can erase, change, or replace (third parties or governments, etc.). Moreover, there is no way to insert a transaction with a document hash retroactively. Even if the platform is hacked or does not work, the blockchain constantly checks the existence of your document. Therefore, you are not dependent and should not trust any central authority. All previous timestamped solutions are deprived of this freedom.

No existing systems allowing to establish the process of creating a new version of electronic documents and have a transparent idea of what is the latest approved version by all parties.

Solution:

Using public blockchains and smart contracts allows you to store information for an unlimited period of time in a secure and structured way that ensures the integrity and existence of the data.

Conclusion:

Blockchain use-cases continue to expand far beyond cryptocurrency and fintech. As the number of concluded real estate contracts, business agreements, personal documents is growing rapidly, it becomes clear that it is necessary to maintain a system that will ensure the immutability and security of notarized documents.

The remote notarization platform can be an excellent alternative for the adoption of transferring and handling the notarization documents.
The article was written by:
CTO at 4ire Labs, Active contributor to Web3 Community. Co-founder of AI based startup.
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