How the blockchain could become the next e-signature

Electronic signature (also e-signature) has become a mature technology. It is nowadays essential to authentify documents digitally in a world of computers and smartphones. However, even though the solutions try to be as secured as possible, there are still some threats such as identity theft or impersonalisation. On the legal matter, some e-signature protocols are recognized as a normal signature. Since this system has still security breach, maybe other solutions could be adopted in order to reduce fraud in this matter. Maybe the blockchain could become a new way to sign electronically, in a more secured way than the actual one. How and what advantages could the blockchain provide to e-signature? This article will try to answer this question.

In my opinion, the advantages of the blockchain regarding e-signature are numerous. Furthermore, its low cost and simple implementation could make blockchain protocols enter in small and medium companies.

 Blockchain and e-signature

The blockchain is a protocol that confirms transactions. If you have one thing to remember about the blockchain, this is it. I will use this transaction confirmation protocol in a lot of articles. One other thing about the blockchain : it is decentralized, meaning that every node on the network can confirm transactions. The whole transaction confirmations are put on a public ledger that is visible by everyone for a public blockchain.

It is this ledger that interests us. On this ledger, you have a few informations on each transaction such as the public keys, the amount of the transactions and the date of the transaction. This latter is the most important and has been called a timestamp. When the transaction is confirmed, to avoid a double spending problem, a timestamp is attached to the transaction. The public key is also interesting since it is unique and therefore, it gives the identity of the sender but anonymously. The private key is like the password of the transaction and is known only by the sender.

With those two concepts in mind, electronic signature is really easy to develop on the blockchain. Indeed, when you do a transaction, you actually electronically sign the document with the public key as your login and the private key as your password. Since the transaction is confirmed, you have the timestamp. Here you have it, a decentralised and secured electronic signature based on the blockchain. In the future, this could be one feature of a decentralised ECM (based on the blockchain of course !).

How to put large documents on the blockchain ?

People could say that the transaction size is limited (only 80 bytes for Bitcoin) and therefore it would sign only very small piece of data. However, you can sign any type of digital document (I am talking about text but also video, music…). The process is simple : you take your document, you process it with a cryptographic hash function. You will then get a hash function that can authentify any document. Then, you just have to put this new hash on the transaction and send your file, no matter what size it is (and why not send and host this document on the blokchain ?). This will recognize your authentified document since it has been electronically signed.

To conclude, the blockchain protocol is already a way to sign a document. Since it is embedded in the protocol, secured and reliable e-signature could be implemented through the blockchain. For cost reasons, it could easily be implemented to small and medium enterprises through one existing blockchain (the larger the blockchain is, the more secured it is from 51% attack). For larger enterprises or for security reasons, each company could create their own blockchain and therefore manage their electronic signature with a relatively low fee.

What do you think ? Do you believe blockchain are the future of e-signature? Don’t hesitate to comment.

 

Bitcoin is dead, long live Bitcoin 2.0

Since a few years already, people have been talking about Bitcoin’s death and the end of the whole blockchain technology following it. As 2016 starts, Bitcoin is more and more criticized. The blog post of Mike Hearn, where he declared that “the Bitcoin project has failed”, had a lot of effect on the community. In my opinion, Bitcoin, in its actual form, is certainly dying. However, I don’t think this death will challenge the blockchain technology. Most of all, Bitcoin has still a chance to survive if it evolves towards a “Bitcoin 2.0”.

Bitcoin: a few problems 

Today, Bitcoin is the most used cryptocurrency, and the media hype is still on Bitcoin. Other cryptocurrencies, although promising, don’t manage to get the same hype and don’t federate as many users. This popularity was followed by an increasing number of transactions carried out on the Bitcoin network. However, the system for now has a transaction limit: 7 transactions per second. This problem could be resolved with an increase of the block size but one has to fork the code to achieve that.

We now get to another problem that Bitcoin is facing: the decentralization of its system. Everyone shares the idea that Bitcoin should evolve but how can you manage this currency without a centralized system? There are some initiatives of course, such as Bitcoin Core. However, internal problems and different philosophies delay the evolution of Bitcoin. While Bitcoin keeps the same code, new cryptocurrencies and protocols emerge. At the end, they could threaten Bitcoin if one is adopted on a large scale. This summer, we have seen the rise and fall of Bitcoin XT: this Bitcoin forking, which was resolving the block size problem, didn’t manage to succeed and at a result, died rapidly.

Another problem is the negative perspective of Bitcoin by the majority of people. To a lot of people, Bitcoin is still associated to crime and illegalities. Moreover, the technology complexity of the blockchain is not helping in explaining Bitcoin.

Those problems could lead to the death of Bitcoin. The non-evolution of the protocol will make people going towards new ones and in the end, Bitcoin will lose its users base. Furthermore, I agree with Mike Hearn: if Bitcoin doesn’t evolve and stays as it is, there is going to be too many transactions for the system to handle. Eventually, Bitcoin will surely face its end. Now, will Bitcoin manage to evolve before this happens? I personally hope so…

Towards a Bitcoin 2.0?

Bitcoin has several advantages but the most prominent two are: its base of users and the community of miners that secures the transaction by confirming them. This system is already in place and works so why change it? The necessity to change Bitcoin is to attract more users and most of all, to be able to evolve as new protocols are developed. You wouldn’t use a computer with floppy disk anymore when USB and cloud storage are available. Ethereum for example shows more applications than Bitcoin and, in this perspective, could be a threat for Bitcoin protocol.

In order to adapt itself, Bitcoin should fork its code and evolve. First of all, by changing the block size and therefore enabling more transactions per second. Bitcoin XT was already resolving this problem but the main disadvantage was the fact it didn’t manage to federate the whole Bitcoin community. In order to do that, this forking needs to involve the whole Bitcoin’s community.

However, how can you insure the involvement of all parties: committee, miners, and users? Here is my thought on a solution, which may be far from perfect but, in my opinion, answer most of the problems. First there should be a centralized committee that decides of Bitcoin’s future. Once they agree on a fork, they describe it to the Bitcoin’s community and everyone can give their opinion by a vote on the blockchain. If a decision reaches majority in a certain period of time, the fork of the code is established and should be realized. With this system, we can have the opinion of every user and also be sure that the reform is adopted. Now, if the centralized committee disagrees on one point, it can give the choice to the Bitcoin’s community by casting a vote and the decision chosen by users will provide some directions. This is what I called Bitcoin’s democracy, which is quite similar to a board of directors for a company.

Another advantage to this solution is that the system enables direct interaction with Bitcoin’s users and enables fast decision about Bitcoin’s future. There is not anymore the same problem that Bitcoin faces nowadays with a decentralized committee, that is in fact centralized, who doesn’t manage to agree on Bitcoin’s future. I know that a centralized committee is against Bitcoin’s original philosophy but I am sure that a decentralized decision-process vote will manage to counterbalance this. Nevertheless, there is also the possibility for the community to give ideas to this committee by “crowd propositions”. This system can be not perfect because votes are needed (if no one votes or only a small proportion votes, the system will not be representative).

In conclusion, Bitcoin needs to evolve! The actual system is not working and will lead to a certain death. In order to evolve and become a true Bitcoin 2.0, the possibility of a centralized committee, casting vote on the blockchain in a decentralized way could be a solution.

What do you think? Do you have any other idea? Don’t hesitate to leave a comment below.