Today I saw on my news feed the idea that blockchain could replace public notaries. The suggestion was – who needs notaries, if everything’s already been checked? But it’s not really a correct analogy.
For example, let’s say that Alice sells her apartment to Bob. Here are some questions to consider:
1) How do miners find out that it was really Alice in person who used her personal key?
2) How do miners know that Bob is actually a living person?
3) How could miners know that Alice didn’t sign the papers at gunpoint?
In a blockchain, miners only know that the math adds-up. This tells us nothing about the actions of living people.
But it gets even more intriguing. Anchoring in a public blockchain doesn’t always work. For example, a company that trades in state property has to hash everything into a blockchain – but if the company wants to rip others off, it can still do so. There’s a whole series of options that can be set up in advance (including cooking the books) – and they can all be hashed into the blockchain. When the auditors show up, the company shows them the option that fits the story, and the details to support it in the blockchain. Of course, protection against this can be bolstered – but that means broadening the scope of the blockchain, and their keys have to be made known to everyone in advance. What you’d have to create, in fact, is a public key infrastructure (which essentially fulfils the notary’s role anyhow).
Overall, then, nobody replaces anyone else – yet the processes get optimized, and the security level goes up as a result of jointly-conducted work carried out by trusted parties, and publicly accessible storage.
A company has five properties, according to the documents. In reality, they have three – but according to their Contract, they have seven.
QUESTION: How many properties would be shown to the auditors?