Proving the exclusive rights to a document, while simultaneously guaranteeing the state of its existence, is all possible without mysticism or deities for anyone who is holding Bitcoin. Rants about bitcoin and the blockchain potential seem never ending. Bitcoins use in SSL certificates, distributed email, micropayments, crowdfunding, smart property all stretch far beyond its popularity and primary use as a currency. And as is true for any significant claim of mysticism or deities, a technology capable of proving existence, ownership, and integrity it is going to require a significant amount of explanation.
Until the blockchain, data on the Internet was largely stored on a central database or server, even cloud storage is typically owned and managed by a hosting company. There are pros and cons to storing data on a server or cloud. Firstly, it saves you from having to store data locally on your computer but more importantly, storing files on a network makes them easier to share. When I upload a photo to Facebook my friends can request the image from the Facebook server and save it to theirs locally. But the convenience of a central interface comes at a cost. Or more often a trade off; your data for their software.
Users upload data at their own risk, the majority of cloud and social media services make no promises of total privacy for your personal data.
When there is almost no guarantee to privacy on the internet, it is important to learn how to maximize it. An alternative to central storage and the cloud is distributed computing (or p2p software), and it’s what cryptocurrencies are built on. In a system of distributed file storage, Bitcoin records every transaction on a public ledger called the blockchain. In a distributed fashion, the entirety of the blockchain is stored by all the “full node” computers participating in the network.
The process of establishing proof-of-existence for your document requires pushing a cryptographic digest of your file to that public blockchain. A digest a shorter fixed-length value that corresponds to the plain text. It can be used to verify the plain text, but cannot be used to decrypt the original text. With your document in hand, you can validate your copy against the chain, without ever having to upload the document to a server or database.
For the first time in history we have a tool to validate the existence of documents without publishing them.
This means no central point of failure, storing data in bytes instead of megabytes, and cutting the cost for companies managing their customers sensitive information. The process of proof-of-existence works by generating a unique code for a document and publishing it to a distributed blockchain network. For any document you can generate a unique bitcoin address.
Take the picture below, its bitcoin address (from blockchainMe.com) is: 1BQTph7tNPTXrz6G6JX1D7Pn7PLuAWwxH5
Flip the picture horizontally, and the address is: 1MBusJzSx2DLjNFpjMJkT84zSubfei9YgW
Remove the little guys arm and the address is: 1ECRrQTDL58Zmfk7gmFr7aiCP8KzdfbQsG
Minute changes in the original document generate entirely different bitcoin address, guaranteeing the integrity of your cool ghost document on the blockchain. By sending a small amount of funds to the address, you have stored a cryptographic digest of your file without ever uploading the document to a database. On the blockchain, the proof of the document appears as a normal transaction. If you choose to publicly reveal the document and calculate the corresponding address you can prove ownership of the information at a specific time.
Although this little ghost example may not seem like much, this technology has virtually incomprehensible implications for traditional intellectual property rights. Just as people wouldn’t have the incentive to plant crops or build on land they don’t have the right to use, people would have less incentive to create ideas or brands if they did not directly benefit from the production of them. For the artists, performers, scientific researchers, software and book publishers that thrive from intellectual property revenue the blockchain could save some significant costs associated with licensing.
Bitcoin and similar cryptocurrencies exist in a space that has traditionally been dominated by governments. Since the early existence of money, gold and silver coins were branded by each of the Greek city states. It’s a rare opportunity to live in a time that offers any promising alternative to that. Proof-of- existence offers the ability to notarize any document on the blockchain absent a third party, and it’s up to the us to decide how valuable that its.