What is Blockchain Notarization And Why Notary Public Should Care


What is Blockchain Notarization And Why Notary Public Should Care

According to the National Notary Association of the United States, notarization is defined as…

…the official fraud-deterrent process that assures the parties of a transaction that a document is authentic, and can be trusted.

This basically means someone trained as a notary acts as a witness or representative that could attest that a document is truthful and can be trusted.

The person, called a notary public or just a notary, is authorized by law to do three things.

  1. Attest to the authenticity of a document and the truthfulness of a person.
  2. Certify a document.
  3. Store the document.

This process ensures that the notarized documents would hold well in court or in the eyes of a government. Thus, most times we are required to notarize documents as part of formality. These documents include deeds, contracts, identification documents (passport, driver’s license), affidavits and more.

Notarization is Going Digital

While notarization service is rapidly moving to the digital space, the need to store notarized documents digitally becomes apparent. Currently, remote online notarization (RON) services store these digitally notarized files at a centralized server. This means if you lost the printed copy of your original document, there’s no way to retrieve it except via these online notarization providers. But what if these providers go out of business? Will they still keep a copy of your digital file?

Why Blockchain is Great for Notarization

Since the advent of blockchain, many use cases have emerged wanting to exploit this revolutionary technology. One of these elusive use cases is notarization.

The decentralization nature of a blockchain network helps to provide a safe haven for notarization namely due to its ability to provide:

  1. Proof of existence
  2. Prevention of tampering
  3. Persistence of file storage

Blockchain Could Prove a Document Exists at a Point in Time

A decentralized blockchain network requires each server (called a node) to synchronize its clock with other nodes. This peer-to-peer relationship means they all must keep an accurate time within milliseconds with one another. And thanks to being decentralized, no one could possibly manipulate these distributed clocks. This is where notarization exploits the very feature that makes blockchains tick.

A blockchain network, such as Ethereum or Bitcoin, could conveniently provide a truthful date and time and thus, any data stored on the chain can prove its existence at a specific point in time.

Going back to the notarization process, we usually notice a seal or stamp imprinted on our document together with the date and time when it is notarized. This timestamp is important to attest to when the notarization happened. The same can be done fittingly with blockchain by uploading our digital file on the blockchain. Since the date and time cannot be altered, we have concrete evidence of when we uploaded the file.

But uploading a large file on-chain can be a tall order since blockchain is mainly used to store transaction records, not files. The storage size for a block data in a blockchain is only about 1MB. To solve this issue, there are multiple decentralized file storage networks that work seamlessly with blockchain platforms, and one of the popular ones is called IPFS, also known as InterPlanetary File System. This distributed network of servers stores public files in almost any format – documents, PDF, images, and even programming code.

But the current catch to this decentralized storage network is the stored files can be viewed by anyone via the files’ URLs. Thus, this may not be suitable for average documents that need notarization.

Since blockchain technology is still perpetually evolving, we may one day be able to store our entire private files on the chain itself. While we wait for a private decentralized file storage network to arrive, we could utilize a clever way to circumvent this issue by uploading the hash value of a digital file.

An example of a file hash is  2e0951d67ad18fa76296e7d83970d127e83502ad04712f38232c5473b3e347d0

Each digital file on any modern computer can be represented by a hash string. This string – a long, gibberish text with alphanumeric characters – is a unique representation of the digital file and unique only to that file. There will never be two different files having the same hash value, even on different types of computer operating systems. This long string of characters only takes up as little as a few hundred bytes, something that any existing blockchain network could store easily. The figure below depicts a file hash value stored inside an NFT token on Fantom blockchain. The NFT token was created using Mintnite – a dapp that mints tokens without any blockchain programming.

Notarized document on Fantom blockchain

Data on The Blockchain Cannot be Tampered

Once it’s there, it’s there. Because of the nature of how blockchain stores its data – in chains – there’s no possibility for the data to be altered. Each block of data is interlinked with the next block thus making it immutable. Some newer blockchain protocols may allow you to alter the data stored, such as via smart contract, but that is programmatically done. If the developer of the smart contract wants every data to be irreversible, the data will be set in stone.

This creates an avenue to not just prove the existence of a particular data (or file in this case) but also ensure the uploaded file was not altered in any illegitimate way. A digital document stored in a decentralized storage system like IPFS or the hash value representing that particular file cannot be changed once it is recorded on the blockchain.

Files on Blockchain Could Last Forever

The beauty of a decentralized network is ensuring that when a single entity of the network shuts down, the network could still sustain itself. Imagine if one day Google goes insolvent. Our emails on Gmail will follow suit – kaput!

Since a decentralized network like IPFS and all other blockchains consist of independent servers owned by separate individuals and organizations, we can ascertain that the files uploaded will last forever. The worst-case scenario is that only a single node continues to power the network but this scenario is unlikely to happen since the human population continues to grow with the advancement of technology. The last resort would be to run our own blockchain or file storage node to ensure our files’ longevity throughout our lifetime.

Blockchain Provides a Fertile Ground for Notarization

Any files – private or public – that were stored on a blockchain can be verified in two methods. A digital private file can recreate its hash value and compare the newly generated hash with its existing hash string on a blockchain. If there’s a match, this proves the file was uploaded at the date and time stamped on the chain.

The second method is a lot easier since the entire file can be downloaded from the blockchain. This applies to publicly-accessible notarized files.

We foresee blockchain technology will continue to improve for the benefit of mankind. Today, this technology is ripe for plucking and digital notarization is one of those fruits of mankind’s labor.

Blockchain Will Not Replace Notary But Complements Them

As technology continues to disrupt more fronts that it touches, we could still take solace in knowing that blockchain will not replace the job of notary public or signing agents.

Instead, a notary public should consider adding value to their existing services by using blockchain to provide a means to prove the existence of their clients’ documents. This could differentiate one’s offerings from others while expanding their revenue stream.