How blockchain is transforming business processes like contracts and agreements
Across the globe, blockchain is fundamentally reshaping how businesses operate. Trailblazers are embracing the technology for everything from the sealing of financial deals to carbon trading – using it to solve the world’s problems one immutable ledger at a time.
One area we’re particularly excited about? Blockchain for smart contracts, naturally.
As a shared, unchangeable ledger for recording transactions, blockchain is transparent, tamper-proof, trustworthy and super-fast. All these traits make it perfect for companies that deal with complex, mission-critical agreements day-to-day. And it’s why DocuSign has been busy exploring ways to weave the best of blockchain into our own digital offerings.
Our blockchain story started in 2015
In the earliest days of blockchain, DocuSign engineers took notice of its huge potential for digital contracts. The year was 2015, and our collaboration with Visa saw the creation of one of the first public prototypes of a blockchain-based smart contract.
Since then, we’ve continued to innovate and explore opportunities to leverage blockchain across our platform. In 2018, we announced an integration with the Ethereum blockchain to allow evidence of DocuSigned agreements to be written to Ethereum.
It’s an ideal arrangement for organisations that want the evidence of an agreement to exist in a neutral environment. On blockchain, an agreement isn’t ‘owned’ by anyone – rather, everyone can check it against the blockchain-stored evidence to verify integrity against the original DocuSigned file. Even better? The content of the agreement isn’t recorded on the blockchain or exposed publicly – it’s just the intent that’s captured.
Here’s how it works
For every completed transaction, DocuSign computes a one-way cryptographic hash fingerprint and publishes it to the Ethereum blockchain. The fingerprint hash is a unique string of text and numbers. This fingerprint hash can be used to validate completed transactions on the public blockchain and acts as a record of immutable third-party evidence for the transaction. The hash can’t be reversed to get documents or data.
Putting the smarts into contracts with blockchain
Apart from the transparency and security aspects, blockchain is paving the way for exciting transformations in the world of agreements and contracts. The possibilities are huge – think of a digital contract on the blockchain ledger, with every step in the agreement process programmed to generate alerts at key moments in the contract’s lifecycle. These ‘self-executing contracts’ have the potential to transform key business processes.
For example, say an insurance company has an agreement with farmers to pay a pre-determined amount if the weather causes crops to fail. Using blockchain, they set up a smart contract that uses a trusted feed of weather data to monitor temperatures near the farm. If things heat up – and the temperature exceeds a pre-agreed level for three days in a row – the smart contract automatically triggers a crop insurance payout to the farmer.
It all happens automatically, no to-ing and fro-ing between farmer and insurance company required. The process eliminates ambiguity, saves huge amounts of time and effort, and delivers a much more streamlined experience for all involved.
Watch this space
The fields of blockchain and smart contracts are evolving fast, and today’s possibilities could become tomorrow’s reality. One thing’s for sure. DocuSign will continue to invest in exploring their potential to help solve our customers’ challenges.