Blockchain provides value-added document management systems

Before we start discussing how blockchain can improve document management, let us start with centralized document management, of which people are more familiar. Document management under the centralized system has several limitations. 

Centralized document issuances might require long, inefficient administrative processes involving various middlemen and it just gets more complicated when the document involves the jurisdiction of various government institutions. 

For instance, my friend, an Indonesian citizen, just got married to a foreigner. For this, she needed to apply for specific documents involving both Immigration and Religious Affairs agencies. The process required her and her family to go back and forth to the agencies’ offices, taking up so much of their time, energy and money.

If you study abroad, in order to have your diploma recognized by the Indonesian education system, you might also need to get your diploma “converted” by the local educational body (a process called penyetaraan ijazah in Indonesian), which involves complicated translation, verification and accreditation processes.

Another issue with centralized document management also involves trust. As much as you can depend on people’s signatures to guarantee the authenticity of their documents, these signatures can often be forged and it often takes graphologists’ assessments to verify their authenticity. 

A friend of mine once worked as a journalist in the Middle East and when some really urgent financial transaction came up at home, he had no other choice but to ask his friend to forge his signature for him.

So, amid the current limitations of centralized document management listed above,what value can blockchain add to users?

Providing more efficient, readily available administration

Blockchain automates document processing using smart contracts. Therefore, users no longer need to travel back and forth to the offices of the public agencies/private institutions issuing these documents. For urgent needs, the system is also available throughout the week, 24/7 (instead of only on working days, within office hours). No extra costs and it also leaves little room for corrupt practices in the document issuance process.

Removing trust issues

Blockchain technology uses cryptographic signatures to validate documents. Cryptographic signatures are programmed mathematical operations which verifies the compatibility of the keys which come with the documents with the ones originally embedded with them. Although these documents still have the owners’ handwritten signatures on them, but the verification and validation process on the blockchain uses sophisticated programming, thus leaving little room for duplication and forgery.

A caveat: despite the advantages it has in terms of guaranteeing authenticity, the blockchain technology cannot, in and of itself, stop document forgeries and falsification. Obviously, there are plenty of bogus universities and schools out there selling bogus diplomas to people. Again, whether technology will be used to achieve benevolent or malevolent ends depends heavily on the integrity of its users.

Allowing for inter-institutional access

The cool thing about decentralized technology is that any document stored in it can be used off-chain for users from different entities who need access to the document in question. So for instance, when somebody applies for a job or enrolls in a postgraduate program, the company or university dealing with the application can have access to validate his/her university diploma, required in the employment/enrolment process. Or, when someone applies for a loan from a different financial institution from the one which manages his bank account, that financial institution can easily access the person’s financial statements to validate it for the loan provision. This also works for trading activities which involve different financial institutions.

Transcending geographical/linguistic boundaries

Another advantage of the decentralized document management system is that it transcends geographical and linguistic boundaries, including in terms of transaction fees because the system uses cryptocurrencies. It solves lots of headaches involving different exchange rates used by the fiat currencies and stuff. Since it is automatic, it also removes the various middlemen and gatekeepers which make the international document management processes more complicated.

These advantages are no rocket science, mind you. The European Union (EU), for instance, has adopted blockchain to manage university diplomas and other educational certificates. This is but one part of what the EU calls its European Blockchain Strategy.

Also, as we have touched upon in our previous story about blockchain ID, the government of Estonia has become a pioneer in using decentralized document issuance solutions. The city of Illinois in Chicago, the United States, as well as the Brazilian Ministry of Population and Planning have also adopted blockchain to manage land ownership certificates.

Furthermore, currently, the blockchain system also comes in its multiplicity, with different programming logic. Therefore, it is essential for programmers to familiarize themselves first with the platform they are working on for document management in order to be able to enhance the platform’s security and integrity.

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