Digitalisation, adapting it to the old way

Published: June 4, 2019
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Digitalisation is ongoing everywhere and it is changing everything all of the time. Nevertheless, in some instances the evolution stops as the common way of going about digitalisation does not work. One example of this is the digitalisation of documents. The way it has been done so far is that the absolute focus has been on making the content digital and the actual properties of the paper sheet, in itself, have been forgotten, neglected, or substituted with contractual workarounds. In many instances that is not important but in other cases it is critical, e.g. for the bearer document or a document of title. These types of documents are different from other documents, which only are bearers of data or information. They give the physical holder certain rights and the transfer of the document also transfers those rights to any new owner.

Why have such documents not been digitalized yet? The answer lies in how digitalisation is done i.e. the sole focus is on the extraction of the data from the document and to put such extracts into a specific software or even worse, placing the data on a blockchain. Having done this, one certainly does not have a document anymore. In order to be able to manage and change ownership of those data extracts (that sits in different software solutions) everyone involved or with an interest in the extracts, needs to agree upfront, usually in writing, to the rulebook governing the extracts (a “club”) and install the necessary software solution, to be able to interact and exchange data between the ones who have agreed on the rulebook. This might work in small clubs or defined eco-systems for certain types of documents but generally, the structures, the laws and the agreements we are all accustomed to and use are still based on the concept of a document.​

The data content in a document is confined by the borders of the paper and the possession of the original is also defined by the possession of the physical sheet of paper. Not to forget, a bearer document should be freely transferable to anyone if it should serve its purpose as intended.  No wonder paper is still used for many types of documents. Every time the ‘data extracts’ sitting in a ‘club system’ have to be presented outside the ‘club’ the ‘extracts’ have to be printed in order to be defined by the proprieties of the sheet of paper as this is what laws and conventions require when presenting a document. Awkwardly enough, no one has been able to present a digital document that corresponds to the properties of a paper original until now.

We at Enigio, have a different perspective on digitalisation, our focus is on the document instead of on the data and the software ecosystems. By having this focus and developing the actual document, a new type of digital information bearer has been created, a document that is readable by both man and machine and where the content is still stored in the document but modern distributed ledger techniques are used for creating the proof of the state of document i.e. who is the holder of the original document and the rights described therein.

The way it works is that the file is holding what is constituting the document and it is stored with the owner i.e. ‘off chain’. The owner and holder is thereby able to keep the content confidential and store it wherever he or she wants. The holder can also share a copy with anyone if he or she so wishes which is exactly the same way as holding a paper document works. Cryptographic envelopes secure the digital document and each content version of the document (creation, amendment, transfer of ownership, invalidation). The cryptographic envelopes in combination with a cryptographic key pair define the current holder of the original.  The private key is kept safe by the holder and the public key is published as a proof of ownership to the current document holder with ‘on chain’ entries.

The references to the document in the on chain distributed ledger do not disclose any secret information or personal data in the document. These on chain references can be used by anyone to verify that a received copy of the document is corresponds to the current valid original, or if it is a copy of a previous valid original or not a registered original at all.

Only the current holder of the document (with access to the document and the private owner key) can amend, transfer ownership or invalidate the document. As it is cryptographically secured in time, born digitally, all amendments have fully secure audit trail and only a specific current holder has control over the document, it is a ‘digital original’ in its true sense to which a holder can continue to make amendments. As the document is a ledger in itself, neither the holder, nor anyone else can change what has already been written in the document but at the same time still maintain it as a valid ‘original’.

These documents are freely transferable and require no special software to read, transfer, store or own, but to validate a copy, or an original document, one needs to use the public distributed blockchain ledger as a notary service.

All of this means that the digitalisation issue regarding negotiable bearer documents (and documents of title) used in the financial industry (like mortgages, bills of exchange, promissory notes, bills of lading etc) is now solved. Anyone who wishes to get on with their digitalisation journey in these areas can now do so and are welcome to contact us at Enigio.