Everprove — Our Vision Of Smart and Distributed Document Archives

During the past few months, a great number of blockchain projects have been launched. While some people may believe that it is nothing but a bubble, in our opinion blockchain and distributed ledger technologies are here to stay, their real and valid use cases will disrupt existing solutions in many fields.

Technology and the legal industry

The legal services market is a 650 billion $ industry. While the industry is expanding and there is no sign of decline, legal professionals and lawmakers can not ignore the new opportunities offered by technology. A rather recent relating example was the Internet. Whole new fields of legal services have emerged as a result of the success of online startup operations.

Blockchain and distributed ledger technologies have vast opportunities for reforming the legal industry, and the way how we execute, store and verify documents and certificates.

Drafting and execution of contracts, certificates and standardized documents makes up a big slice of everyday legal work. Traditionally, these documents are created, and signed off on paper and stored in physical locations. It might be early to state that the legal world is ready to go full digital, there are various strong arguments for adapting “snippets” from the technology. Blockchain technology offers some really handy solutions to secure and simplify a handful of legal services.

Regulatory developments

While the legal services industry and its regulatory environment have always been more traditional, adapting rather slowly to new circumstances, we can not say that they would be reluctant to change. More and more countries’ jurisdictions are giving space to and exploring the possibilities of blockchain technology.

Just recently:

• China’s Supreme Court ruled that evidence on blockchain is legally binding.
• According to Senate Bill (SB) 1662 in Tenessee, blockchain-based signatures, records or contracts are considered an electronic record.

Additionally, a few countries have made huge steps towards providing the necessary legal environment for the exploration of distributed ledger technologies.

The recognition of this new technology by the United States and China will be a catalyst and a model to be followed by the rest of the world.

Blockchain tech and certification

DLT solutions will surely enable a handful of possible use cases where they could optimize existing services. We wish to explore here why and how blockchain-based Smart Documents might benefit the legal services industry and also everyone seeking a reliable, certified but still easy solution for formalizing transactions.

Legitimacy of any information recorded on a blockchain results from a few key features offered by the distributed ledger technology, namely:

• Digital: blockchain infrastructure runs entirely digitally, so there’s no need for manual documentation.
• Chronological and time-stamped: information (eg. transaction details) is added to consecutive blocks in a linear, time-stamped manner. Each block is unique and contains all transactions in a given timeframe.
• Data is stored on a distributed ledger: The ledger (or blockchain) is public so anyone is free to add new transactions and is free to validate new blocks.
• Consensus-based: Even though anyone can add blocks, forging “fake blocks” is impossible. This is because of DPOS (Delegated Proof-of-Stake) the consensus-mechanism that BitShares, our underlying blockchain utilizes. “Stakeholders can elect any number of witnesses to generate blocks. A block is a group of transactions which update the state of the database. Each account is allowed one vote per share per witness, a process known as approval voting. The top N witnesses by total approval are selected. The number (N) of witnesses is defined such that at least 50% of voting stakeholders believe there is sufficient decentralization. When stakeholders express their desired number of witnesses, they must also vote for at least that many witnesses. A stakeholder cannot vote for more decentralization than witnesses for which they actually cast votes.”
  Accordingly, to add a fraudulent transaction (for example spending more than you actually have) the attacker would have to convince all of the witnesses to validate the fake block. While it may be theoretically possible, it is impossible in practice.
• Cryptographically secure and immutable: Blocks created are cryptographically stored on the chain. After confirmation it is impossible to modify data stored in the previous blocks, therefore it is immutable.

These characteristics enable blockchain technology to reform — or expand — whole industries. Everprove utilizes this technology to register and certify Smart Documents created by the users of our web application.

Legal professionals (attorneys and notaries) have always provided a kind of certification service. Even now, countersigning and certifying paper-based contracts is a significant share of attorneys’ work. A properly certified document reasonably proves its date of signature, the person of its signatories, and its content.

Everprove aims to utilize blockchain itself as a mean of certification, and allow parties to properly register and certify their transactions without the involvement of traditional intermediaries.

Data stored on the blockchain will stay there forever. The immutable nature of the blockchain, and the way blocks are added to each other create a perfect opportunity for parties to record something important, for eg. contracts, statements or certificates. If parties can express their will and burn it on the blockchain — as a transaction — then a trusted record of their agreement or statement is created. Blockchain-certified Smart Documents have a great future, and Everprove aims to be the first globally operating, easy-to-use product in this field.

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