The process of securely keeping track of the creation and modification time of a document, i.e. trusted timestamping, is an indispensable tool in many areas of business. Since a Bitcoin transaction includes a date and time, held on the blockchain, the parties involved will know, without a doubt, that a document in question existed at a particular date and time.
All digital signatures make use of hash functions (also called one way functions). These functions take any file and compute a fixed length fingerprint: a code that identifies the file. Anyone with the file can generate the code, it is practically impossible to construct the file from the code. Bitcoin internally uses the hash codes for addresses. To timestamp a file, you need to compute the code and use the code in a bitcoin transaction. Because bitcoin has an open transaction ledger, anyone can then see the code.
Professional fields where it is currently used
Outside of cryptocurrencies, you don’t usually hear about blockchain being used for different security measures. Let’s take a look at all the different fields of professions and what their rationale is to use such a method of timestamping:
- law — lawyers, notaries verify signatures in contracts and use them in other legal documents. Blockchain timestamping provides an additional layer of trustless, immutable verification of the exact time when specific documents were verified.
- research — timestamping of original research papers on the public blockchains lets the researchers take credit of their specific work. Any attempts at later plagiarism can easily be proven and discounted by the blockchain timestamping.
- engineering — engineering work, design, reports, drawings — these are just some of the examples that can be timestamped on the blockchain to allow a verification of their integrity, authenticity, and date of issuance.
- academia — similarly to the applications in research, academics, scientists and college students can use blockchain timestamping to allow public distribution of different issues, e.g.: essays,, projects, exam questions, etc. Blockchain, here, will also provide an immutable integrity proof.
- design — designers can now link their pieces of work to a specific name, date and time. This way, they can share and display their works with others without having to worry for any third party that may present it as their own in the future.
- security — with dashboard and other security cameras, blockchain timestamping will provide the integrity of video files at the time of their recording
- supply chain records — existing databases and processes can be equipped with blockchain-based timestamping. This generates a tamper-proof record of all data in the database.
- liability — blockchain based timestamp can reduce the liability of individuals and businesses. This kind of documentation is tamper-proof, so you can prove to insurers and other stakeholders that you took all necessary actions at the required time to prevent damage.
- fraud prevention — e.g.: when you are selling or buying a car, odometer data and data of other measurement instruments can easily be protected against fraud. Any change of the original data will immediately invalid the timestamp and thus be detectable.
- auditing and compliance — blockchain based timestamps remove the need for complex processes: instead of creating trust by involving multiple parties, trust is generated by a fingerprint of a documentation and stored on the blockchain.