Electronic Document Circulation: Gravity Extended Contract

in blockchain •  last year  (edited)

One of our most important missions for broader business adoption is to develop a full solution that includes technical, legal and financial infrastructure and enables users to create and sign legally binding documentation within the blockchain. In order to achieve this, there must be transparency as well as the ability to track down the contract at any stage from the signing of an agreement to the transaction stage. For that, we’re going to implement a full solution based on Gravity blockchain using something called Extended Gravity Solutions Contracts.

While large organizations have teams of legal professionals, small and medium-sized Enterprises lack such resources, so they require a framework that addresses all of the standard business processes that are part of standard operations as well as the ability to conduct agreements with other counterparties.

The Problem Of Legal Significance

The term smart contract was first defined in the late 20th century by Nick Szabo in eponymous paper. The thought on smart contracts has advanced significantly since then, and currently it is a dynamic entry in a distributed ledger, that can cause more entries to be created when specified conditions are met. Usually, this means that a smart contract is something that records and automatically executes predefined agreements in a secure and impartial fashion. This kind of usage of the distributed ledger technology was even discussed around the time of the release of Bitcoin’s Whitepaper, but was popularised by Vitalik Buterin and Ethereum project. Currently, it is believed to be the dominating feature of blockchain technology.

Let’s assume we have a digital document (a file), and our challenge is to protect it from modifications as well as clearly record the fact of its existence and ownership by someone at some point in time. Traditionally, one would bring the papers to a notary who would legally verify it. In blockchain, this is done by a smart contract, which easily accomplishes all these things. It may seem that now there is no need for the notary. However, there is still a problem: the smart contract is just an executable code, and as of yet there are no legal standards for a contract fulfillment with and by code that is acceptable by legal authorities.

Ricardian Contracts

Ricardian contracts were introduced in late 20th century by Ian Grigg (@iang) to make a contract valid for both machines and humans .

The Ricardian contract is a single document or legal agreement that contains machine-readable markup language and has the following attributes: It must be parseable (easy readable by both programs and people), digitally signed, carrying information about keys belonging to the parties, and have a unique and secure identifier.

Ricardian contracts also have a key of a higher-level document, which enables an ability to check the chain of the contract’s signatures in one automated sequence. This check ensures full transparency of document circulation, excludes spoofing attacks and provides quick search functionality. Here is an excellent article that explains what Ricardian contracts are and the difference between them and smart contracts.

It’s worth touching on the parsability feature of Ricardian smart contracts in more detail. According to Ian Grigg’s concept, the contract describes natural and legal relations between persons and legal entities. Therefore it should firstly be comprehensible to people, and then to the machines according to markup language principles. Typed settings in the contract template enable the automatic monitoring of contract facts and prevent their misinterpretation. You can see more detailed information about Ricardian markup language here & here.

The concept of the Ricardian Contract is being developed by projects such as Mattereum with the aim to match smart-contracts and legal standards of certain jurisdictions.
Mattereum’s ultimate goal is to create an Internet-of-Agreements, a worldwide ecosystem of legally-valid smart contracts.

Acknowledging the importance of the bridge between legal framework and smart contracts, Gravity Solutions cooperates with the projects like Matereum and develops the Legal Framework that will make the smart contracts use, legally compliant.

Digital signature

In order to make an agreement legally valid, a Ricardian contract has to be signed with parties’ Digital signatures. In any blockchain protocol, the combination of private / public key is already a form of digital signature that allows for the identification of an owner of an account. However, in order to make it valid for the legal space, the KYC procedure should be executed to identify the human or organization behind the public key.

Gravity Solution’s identification is built on 3rd party KYC providers that verify the accounts and blockchain AUTH component which makes sure that the private keys have identified persons or entities behind them.

AUTH Component provides user authentication through public protocols such as OAuth, OpenID, and is the gateway to KYC plugin services, which implement a required depth of authentication for physical and legal persons, from decentralized solutions to state-approved providers of digital signatures as well as any other better solutions which may come along in the future.

Users will be able to create accounts with various levels of identification, from fully anonymous (incl. Stealth transactions) to fully confirmed because some tasks are impossible to solve without such confirmations. Some business apps that we are going to implement on our blockchain will require identification. For example, a documentation circulation system that requires legally valid documents.

Extended Gravity Solutions Contracts

As a complex solution to the problem of implementing the electronic document circulation to Gravity Protocol, blockchain offers the system of Extended GS Contracts. An Extended Contract is a combination of the Ricardian Smart Contracts concept as well as a decentralized infrastructure that handles their execution. Gravity Solutions develops a freely extensible Extended Contract template library for users, covering all standard business processes, e.g. purchases, rental, leasing, refit and employment contracts, fiduciary management, loans, delayed delivery, agency agreements, cessions, investments and so on. Every economy agent can use this library to choose the purpose and specifications of the contract, which will become a full agreement after some modifications.

Let us consider the type-case of contract creation with the Extended Contract system.

In order to formalize the Extended Contract, participants choose a template from the legal templates library and change it to suit to their business situation. After successful approval of the resulting contract, the contract is uploaded to storage, creating the relevant transaction with the hash of this contract in the blockchain. Then it is signed with the electronic signatures of all participating entities. One of the confirmations of compliance with the contract’s obligations is the fact that all off the contractors signed the transaction with the hash of the related documents (acts, consignment notes and so on), contained in the storage.

Documents are stored off-chained in external storage with the help of the Data Storage Component of Gravity Business Framework, which addresses the problem of limited block size and blockchain bloat. We’ve already written about IPFS implementation on protocol level in Gravity blockchain in this article "Gravity IPFS: Off-chain Data Storage". The key feature here is that not only decentralized databases like IPFS can serve as the external storage, but classic RDBMS i.e. PostgreSQL, Oracle, SQL Server and others as well.

One of the issues of extensive business integration of blockchain technologies is the lack of user-friendly interfaces and use cases which do not require a staff of highly trained specialists. Another requirement is that the documents generated by the blockchain solution comply with international legislative standards. The use of an Extended Contract system allows the creation of a dynamic electronic document circulation environment, and with the help of Ricardian contracts is both easy to use and has legal significance.

by Yuri Parsamov

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Gravity Protocol Intro
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Gravity: Ecosystem Participants
Gravity: Stablecoin Solutions
How the Gravity Protocol Team Implements a Security Development Lifecycle

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interesting ..
You know that man curiosity of science in the era of those civilizations is the same as this man now
I think it makes us humble on what we do not know
Thanks for sharing..

Is it not the concept of block-chain that transparency is the government of the block-chain? So why do we need 3rd party legal bots? Is that not what kills the Internet over and over again: Legislations and rights?
Freedom should be easy and each person in the world should have the right to govern free space on the Internet. It's in the declaration of human rights.

And you don't think the legality of documents adds degrees of freedom to the business?

Here in India our government is still thinking that we should legalize or accept blockchain or not . I am really proud of the countries who have reached to this point of development .

It can be assumed that eventually the entire state documents will on a blockchain.

Truly said, blockchain is the future trend which everyone will adopt.

Lets just hope for the best .

Indian govt. Will legalized because
he support digital India
Election 2019
Commitee fevar in crytocurrency
Only RBI take action against cryptocurrency

Hi... i think in India government has legalized block-chain technology...

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Procedure of KYC is already being adopted by multiple Cryptocurrencies however in my opinion at present there will be only few who will like to have KYC because most of the users of digital currency would like to be anonymous but I must say that digital currency with approved KYC will rule in future.

Blockchain is the future of document management. So no KYC not do. But Gravity will not require KYC without having to use legal documents, and accounts can be anonymous without problems. Anonymous accounts will be able to enjoy all the benefits of the blockchain, including governance. But if you need to use the legally significant document flow, you can create an identified account.

  ·  last year (edited)Reveal Comment

Informative post

govt should take a look on this issue

You have recieved a free upvote from minnowpond, Send 0.1 -> 2 SBD with your post url as the memo to recieve an upvote from up to 100 accounts!

Welcome to steemit. Follow me @gravity-protocol for crypto news and so on........

hi i will do :)

Here in India one of the biggest exchange announced that they may stop deposits and withdrawals due to Ban, but I am proud that how other countries are accepting, even installing Bitcoin Atm's. Great Article

super post. Mam nadzieje ze mi tez kiedys uda sie tak zarabiac jak tu kolega na swoich postach

All countries should accept blockchain technology even though some are skeptical they should observe the others see the advantage and they they should venture of their own

NICE

Thank you

Good friend publication! Congratulations!

HELLO THERE!!!
THAT IS A GREAT IDEA, NICE PROJECT. WE ALL NEED TO GET INVOLVED INTO NEW TECHNOLOGY.

GOOD LUCK!!!
HAVE A NICE DAY!!!!

The Problem Of Legal Significance, Ricardian Contracts and Digital signature and explained very nicely any layman can also understand the the post in a very simple manner.

Quite Interesting

blockchain and bitcoin will legal in india and wiil be increase bitcoin trader or investors.
just need to approve in india. bitcoin investors and crypto co founder should discuss with our govt. bcz many investors wait for approve, when its totally legal in india bitcoin investors will increase.

bank also will adopt blockchain all over the world blockchain is safest thanks to him who creates this kind of technology which is helping to get digital world and saving time in banks transaction stying in ques i think around 10 years whole world will be digital

The problem I see is that blockchain takes a huge toll on the energy infrastructure of a country. If we can have better sources of energy that is both cheaper and renewable, I can see blockchain being a major financial institution in the future.

  ·  last year (edited)

such a interesting idea will help the people and Government to solve the problem in Blockchain and will be safe Transaction!!

Hey @gravity-protocol, good to see your nice sharing information.. how it will work on decentralized digital coin which is full of transparency.

Every new technology has some good and bad effect. Now we have to fix the loopholes, and support and encourage the trending smart technology.

Good post 👏

You got a 54.31% upvote from @postpromoter courtesy of @gravity-protocol!

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great article....Must read!!

Well written addressing the legal perspective of it. Many countries have yet to legalize cryptos.

Sriously India is way behind from allcother countries.

Muy interesante.

So where smart-contract stands exactly as compare to this one ?...

REALLY HELPFUL POST.THANKS FOR IT

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so much to learn more

Thanks @gravity-protocol

such a fascinating thought will encourage the general population and Government to tackle the issue

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images (1).jpeg

It will b super kul if all countries should accept blockchain technology

I want to,
I give you 1,000 votes, But in stemthis system did not keep it.
This is not because I can not give it.

Good night steemit friends wherever you are ... On this occasion I will try to discuss about the dangers of bitcoin. As cited by the international financial institutions of the international monetary fund (IMF) in recent days ...
where the IMF provides information that we should be careful with this currency because it has no legal certainty and is also vulnerable to fraud and keeps a negative risk to the financial system itself. how not, with its form of digital assets, cryptocurrency is easily misused for the crime of the financial system such as money laundering crime.

besides, the lack of a clear system, makes cryptocurrency vulnerable to malfunction that ultimately harms people who use this instrument.

In this case Andrian one of the employees explained:
"Crypto assets have potential for financial crime (fraud), security breaches and operational failures," he explained.

for that, Adrian said, governments and policymakers in various countries should begin to establish a clear policy related to cryptocurrency so that potential problems that will arise in the future can be prevented.

so for comrades who have already bought digital assets bitcoin or the like to be careful .... And who has not bought should undo your intention, before you regret in the future ...

BITCOIN MANY DECEPTING AND I AM ONE OF THE VICTIMS ...

Crypto gets Amazing ,but some countries not allow

muy interesante

Every thing will fall in place for good as the blockchain technology is future.What actually required is that every country of the world legalize crypto currencies and embrace it and within no time all loopholes and shortcomings will be taken care off within no time. Its will take time but it will happen the same way.Just wait and watch.

Blockchain technology is the best technology in today's time. More miracles will be seen in the comming future. Let's see what with gravity extended contract do in future.
@gravity-protocol

Quite an interesting article. For me I beleive crypto is here to stay and will continue to gain massive adoption because of so many workable solutions that it provides. A platform trying to advance the crypto frontier is Seele. I wrote a piece on Seele's amazing Blockchain 4.0 here https://steemit.com/airhawk-project/@foley/seele-blockchain4-0-vs-existing-blockchain-technology an upvote from you would be nice. Thank you

Thanks for posting the expansion of our country from an electronic device

The genius of the contents are well written, Success!

Cryptocurrencies has come to stay.