By David Fisher, Founder, Integra Ledger.
This is the third instalment in a four-part series that explains the Integra Ledger ecosystem for universal document and contract automation.
In the first instalment in this series, we introduced the concept of document credentials. In the second instalment, we highlighted the similarities of the billion-transaction-a-day global credit card processing system to the universal document and contract automation network we are building. In this third instalment, we’re going to describe the system in action.
To begin, let’s review some key concepts related to the Integra Wallet:
- It is software that holds and manages credentials.
- It is not cloud-based. You download the software to your phone or desktop.
- You generate your own public and private keys (similar to a User ID and password) which you alone store in your wallet. There is no central database of credentials.
- It does not store documents. It only stores document credentials.
- It can be integrated with other software to add cross-organizational automation to that software. It does not replace that software. It adds a new, document credential layer that is software agnostic.
And key concepts related to “smart documents” (documents registered on Integra Ledger):
- The blockchain does not store documents. Integra does not replace DMS software.
- It does not store personal information such as the contents, title, author, or owner.
- The only information recorded on Integra Ledger is time and date stamped proof of existence for documents – a combination of a random number document ID and a document hash (digital fingerprint).
- The user can affix a locally generated QR code to the document as a convenience to other Integra users that may want to interact with the document.
Example Use Case: Software licensing – a universal use case
All of us are familiar with this type of contract, where you check a box or press a button to accept the terms of service or end user license as a prerequisite to getting access to a website or software application. Few people actually read the terms to which they are submitting their electronic agreement, and fewer still make a note of it. All trust is vested in the company, with respect to recordkeeping.
The Integra Wallet transforms that legacy software licensing model in the following way:
- The software company registers the current license agreement or terms of service on Integra Ledger, at a cost of $.01.
- The software company generates a QR code for the Integra-registered license agreement that links to the contract’s “proof of existence” on Integra Ledger.
- The software company places the QR code on the license agreement page of the website or software, where a user can scan it with his or her Integra Wallet.
- The act of the user scanning the license agreement’s Integra QR code has the effect of initiating a direct connection to the wallet of the licensor – the software company.
- From that point forward, the licensee has a permanent record of that contract in his or her wallet, with any additional “document credentials” provided by the licensor (e.g. link to the version of the contract registered on Integra Ledger).
- In the future, the licensor can use that direct connection to the wallet of the licensee to send updated terms of service (for example), and when the licensee receives them in his or her wallet, they will be intrinsically associated with the original license agreement credential.
- The high integrity, direct exchange of credentials also allows for the revocation of those credentials, if the contract allows it. This can be done with perfect integrity, wallet-to-wallet, always with perfect referential integrity to the contract in question, because the entire channel of communication is anchored to the immutable Integra-registered identity of the license contract.
An Integra Wallet can hold the document credentials for every agreement you ever sign (and there is no cost do so). An Integra Enterprise Wallet can allow an organization to instantly update, amend, or even revoke a contract for thousands (or millions) of users via direct document credential management.
Example Use Case: Corporate Securities
A law firm and/or company registers corporate securities documents on Integra Ledger – a permanent “proof of existence” of these important documents. Investors can then connect to those documents and import the associated “document credentials” into their Integra Wallets. This is a high integrity way for companies to manage and securely communicate with their investors, encrypted and peer to peer, and investors will be able to manage the document credentials for entire portfolios of companies and investments. Intrinsic proof of version, proof of existence, proof of identity, proof of communication, proof of notice, proof of conversion (when applicable), etc. All completely private to the parties, using Integra Ledger as the anchor for identity, proof of existence, and publicly verifiable audit trail. The cost per investment? Probably no more than $.05, assuming several documents per investment.
Since the technology underpinning the Integra Wallet is open source, we expect that software companies and law firms will create custom-branded wallets optimized to facilitate everything described above, with integrations into various cap table management software platforms.
Example Use Case: Real Estate
Similar to the corporate securities example, a law firm, landlord, or property manager can register lease documents on Integra Ledger, and tenants can use their Integra Wallets to connect to the landlord or manager directly via the exchange of credentials related to the lease itself (or even starting with a lease application or property inquiry). Thereafter, things like legal notices, invoices, renewals, and even maintenance requests can all be transmitted back and forth via the wallets that contain the document credentials related to a lease contract.
On the landlord/manager side, integration of the Integra Enterprise Wallet can connect the data flows of hundreds or thousands of leases directly to property management software with perfect data integrity, since all communication for a given property or contract is anchored to the immutable Integra ID and credentials of the governing contract. Furthermore, the Integra Ledger based audit trail will streamline due diligence in the event of property refinancing or sale.
We expect many real estate companies to implement this technology with their own, branded wallets customized for the real estate market
Example Use Case: Banking
In this more enterprise-centric example, a bank registers loan documents on Integra Ledger, holding the document credentials in the bank’s enterprise wallet. At a date in the future, the bank can sell or securitize a portfolio of hundreds of loans (e.g. mortgages), and the document credentials allow nearly instantaneous due diligence on the provenance of the documents. Upon sale of the portfolio, the document credentials related to the loan portfolio can be transferred to the wallet of the purchasing entity. And remember that because the loan documents themselves were originally registered on Integra Ledger, it’s always possible to instantly match documents to document credentials with perfect integrity.
We believe that this is the simplest, highest ROI application of blockchain technology to the banking industry because it leaves all current systems intact while improving data trust and integrity. The cost to add a document credential layer to a portfolio of 1,000 loans would be $10.
And That’s Just the Beginning
Consider that the securities, banking, and real estate examples could easily intersect in real life – a bank syndicates a loan to multiple investors for a large real estate asset with hundreds of leases and tenants, and over 100 law firms representing the various parties during contract negotiations. Integra-registered documents and document credentials can tie that entire document ecosystem together, even across hundreds of separate organizations using dozens of different software applications, resulting in systemwide data reconciliation, automations, and reporting never before possible.
Amazingly, this new technology pattern leaves the all the documents and software intact in their current systems, while the new blockchain-authenticated document credential layer does the heavy lifting. All documents and data stay completely private to their owners unless and until permissioned to other Integra Wallets and their respective users.
The final instalment in this four-part series will be on Friday.
About the author: David Fisher is the founder of Integra Ledger, ‘the blockchain for law’, as well as the founder of the Global Legal Hackathon, which is the largest legal innovation event in the world.
[ Artificial Lawyer is proud to bring you this sponsored article by Integra Ledger. ]