Can Blockchain Replace Notaries?
Blockchain technology using smart contracts is creating new alternative processes for many applications, but can blockchain replace notaries?
First, we must understand the notary function and the blockchain function and then determine if part or all of the notary public function can be replaced by using blockchain technology.
Common Law Notary Functions
In most states and territories of the United States, except Louisiana and Puerto Rico, notary laws are originally derived from English common law. Notaries in these jurisdictions are commissioned government officials, serving within its geographic boundaries, usually for a renewable term of four years.
About half of the states require notaries to complete an approved notary training course and/or notary exam to demonstrate knowledge of the state’s notary laws. The notary takes an oath of office before serving the public.
Notary laws vary by state, but they always include the basic functions of administering an acknowledgment and a jurat.
In these common law jurisdictions, notaries are not trained lawyers and are prohibited from practicing law without a license, known as the unauthorized practice of law (UPL).
For an acknowledgment, the signer must meet with the notary and show a form of satisfactory identification. Identification may be made by personal knowledge of the notary, a government-issued photo ID, or a credible witness.
The notary verifies the identification, and if the required conditions prescribed by law are met, administers a verbal ceremony in the basic form of:
“Do you acknowledge that you are signing this document knowingly and willingly for the purposes intended?”
The notary observes for signs of coercion, duress, mental awareness, and sobriety and may decline to notarize if the required conditions are not met. The notary completes a notarial certificate with the wording for an acknowledgment notarial act. It includes the venue (state and county), date, name of the signer, the notary’s name and signature, the notary’s official stamp, and the notary’s commission expiration date.
The notary does not prepare, read, verify, approve, copy, or store the contents of the document. The notary scans the document for blank spaces and asks the customer to fill in the blanks so the document is complete before notarization. The notary is a ministerial agent for the government and does not provide legal advice or legal opinions to customers since the notary is not licensed to practice law.
For an acknowledgment, the customer may sign the document before meeting with the notary or in the notary’s presence.
An acknowledgment is not a sworn statement. It is typically used on an agreement, contract, lease, power of attorney, bill of sale, real estate deed, permission form, assignment, living will, release, settlement, transfer, garnishment, or lien.
After notarization, the notary returns the document to the customer and the customer delivers the document to the destination.
For some documents, such as an affidavit, the customer is making a statement under sworn oath or affirmation, under criminal penalty of perjury, that the information in the document is true and correct. The notary verifies the identity of the witness and observes for signs of coercion, duress, mental awareness, and sobriety.
The notary administers a verbal ceremony in the basic form of:
“Do you solemnly swear or affirm that the information in this document is true and correct, under penalty of perjury?”
The notary completes a notarial certificate with the wording for a jurat notarial act, including the venue (state and county), date, name of the signer, the notary’s name and signature, the notary’s official stamp, and the notary’s commission expiration date.
The notary does not prepare, read, verify, approve, copy, or store the contents of the document. The notary scans the document for blank spaces and asks the customer to fill in the blanks so the document is complete before notarization. The notary does not provide legal advice or legal opinions to customers.
For a jurat, the customer must sign the document in the notary’s presence.
After notarization, the notary returns the document to the customer and the customer delivers the document to the destination.
Other Notarial Acts
In addition to an acknowledgment and jurat, notary laws vary by state and may include making a certified copy, witnessing a signature, administering an oath to a witness giving live testimony, administering an oath of office for a public official, performing a marriage ceremony, verifying a vehicle identification number (VIN), verifying the contents of a safe deposit box, making a marine protest, and making a protest for presentment and dishonor of a negotiable instrument.
Notary fees vary by state, but the average cost of notarizing one document is $5. Many banks offer free notary services to their customers. There are about 4.5 million notaries in the United States.
Notaries also may be required to show or make copies of entries in their notary journal. The entry describes the date and time of notarization, type of notarial act, name, address, and signature of the signer and any witnesses, type of identification used, document description, document authentication number (if any), notary fee, notes, and place of notarization (optional). In some cases, the notary journal includes a required or optional thumbprint of the customer.
Most states require or recommend that the notary keep a permanent, bound, chronological notary journal or register with numbered pages of all notarial acts completed or denied. Some states allow the notary to keep an electronic notary journal rather than a paper notary journal. The notary must keep the notary journal and notary stamp secure.
A blockchain notary journal could allow interested parties to look up and verify hash values and timestamped dates of notarized documents, other completed notarial acts, and notes of any additional information, special circumstances, foreign language, or declined notarizations.
Once a document is notarized and electronically sealed, the hash value of the document may be computed and entered in the document description field of the notary journal. As a timesaver, only the last 8 of 64 hexadecimal digits of the document’s hash value need to be recorded in the journal, representing over 4.3 billion (16^8) possible hash values. For privacy, the actual document does not need to be published on the blockchain.
If a legal dispute occurs, the notary may be summoned to appear in court as a witness and must be prepared to answer questions about a completed transaction or notary procedures.
When the notary resigns, retires, or dies, the notary journal is usually kept for 10 years or delivered to the notary regulator or state archives for recordkeeping.
Civil Law Notary Functions
In many countries, the notary laws originate from the Roman Empire. These notaries, known as civil law notaries, attend several years of law school, may require a master’s degree in notary law, and are licensed to practice notarial law.
In addition to basic notary services, they also provide legal services including legal document preparation, review, approval, legal advice, and legal opinions.
Civil law notaries keep originals or copies of the documents they prepare in an archive, or protocol, a notarial register or journal, and make periodic reports to the government of their completed transactions, known as notarial acts or deeds.
In the United States, the notaries in Louisiana and Puerto Rico are civil law notaries, since their laws originate from France and Spain, which were once part of the Roman Empire.
Other Legal Systems
In countries with a significant or majority Muslim population, lawyers and notaries follow Islamic Law, or strict Sharia Law, based on the Quran and interpretations by scholars.
Vatican City uses a combination of civil law and canon law of the church.
As we embark on space exploration, space law will be used.
In the United States, there are over 600 federally recognized Native American Indian tribes that operate as sovereign nations. They write their own tribal notary laws, that are similar to the laws of most common law states.
There are also federal notaries in the military that follow the U.S. military code and in the U.S, State Department at foreign embassies and consulates that follow the foreign service code.
Some countries use a combination of common law and civil law or native law. There is no uniform harmonized international law or procedure for becoming a notary or for notarization.
This list shows the current 193 members of the United Nations, the legal systems they use, and which countries have agreed to abide by the Hague Convention on the legalization of notarized documents using an apostille.
Blockchain Functions: Can Blockchain Replace Notaries?
A decentralized blockchain network is very useful for recording immutable peer-to-peer transactions using cryptocurrencies and tokens and the timestamps and hash values of written content, data, audio, video, and photo files.
For storage efficiency, security, and privacy, the actual written text content is not stored on the blockchain, but instead, a unique hash value of the content is stored, representing a digital signature, fingerprint, or message digest of the content.
Timestamps and hash stamps create useful permanent records and evidence, but they are not government-authorized notarial acts.
Comparing Notary Functions with Blockchain Functions
Notaries work as impartial trusted public officials to verify identification and prevent document fraud, forgery, coercion, and duress at legal document signing. Some documents contain information and statements made under sworn oath or affirmation, to tell the truth.
If the document is written in a foreign language, the notary should also use reasonable care to determine that the signer can read and understand that language without using an interpreter.
Blockchain technology does not help in the creation or review of legal documents, providing authorized legal advice, administering the notarial verbal ceremony, providing human observation for coercion, duress, mental awareness, language comprehension, or sobriety, or replacing a government-authorized human public official in witnessing, signing, and applying an official notary stamp to authenticate the signature on a document.
Mobile notaries also visit hospitals, nursing homes, prisons, the sick, injured, disabled, and dying customers who may be experiencing pain, fear, worry, stress, or depression due to their difficult circumstances and hardships.
A human notary can provide words of encouragement, a friendly smile, compassion, storytelling, and humor to help another person in a time of need. Human emotions, senses, and interaction cannot be completely replaced by blockchain technology, computers, and software.
The notary also needs to serve all of the public, making reasonable accommodations for signers who may have a disability affecting speech, hearing, vision, or signing.
A human notary can perform notarial acts using paper documents, an ink pen, a rubber stamp, and a paper notary journal. No computers, software, internet access, technical knowledge, or electricity are required. So, a mobile notary can notarize documents off-grid in a remote or rural area, for customers who do not use computers, or following a disaster when equipment is damaged or utilities are not working.
Some legal documents including a last will also require the signatures of one or more witnesses in addition to the principal signer and the notary.
Blockchain timestamps and hash stamps show the proof of existence of a document, prevent repudiation, show proof of content expressed by a unique hash value, and provide proof of change evidence of document editing or tampering by timestamping document revisions.
If a document originates from a website or blog, a proof of URL origin may be included. An author’s name may be included in the document content or metadata. Tamperproof digital IDs are becoming available for proof of identity, but laws must be updated to authorize the use of digital IDs in addition to legacy identification cards.
These blockchain functions are useful in a wide range of applications, including business, academia, and publishing, and are not limited to legal documents.
Conclusion: Can Blockchain Replace Notaries?
Trained notaries, lawyers, paralegals, and government agencies can use blockchain for tamperproof recordkeeping of legal documents and records.
Can blockchain replace notaries?
Blockchain timestamps cannot replace notaries under current notary laws. A notary is an authorized public official who prevents fraud by following notary laws to perform notarial acts. A civil law notary also checks documents for compliance with the law.
Official notarial acts are presumed by courts to be prima facie evidence, valid without any further proof unless convincing contradictory evidence proves otherwise.
The blockchain serves a different purpose. Timestamping and hash stamping are not notarizing.
Individuals and businesses who are not lawfully authorized by the government may not impersonate, offer, or provide notary services. A person may not notarize their own documents. Many articles written by blockchain advocates who do not understand the function of a notary public contain incorrect or misleading information not based on the reality of current laws.
Notarized documents need multi-signature capability, to show the signatures of the principal(s) and the notary, and maybe one or more witnesses.
Blockchain can detect electronic file editing or tampering and provide online verification of an electronic file’s existence, hash value, and date/time of stamping. Blockchain is an additional useful tool for increasing trust in the integrity of notarized documents.
An official notary stamp and a blockchain timestamp are not equivalent, interchangeable, or mutually exclusive, but should be used together for more thorough protection against fraud and tampering.
Notarized paper documents may be scanned to create secure password-protected PDF files and native electronic documents may be timestamped on a blockchain. Electronic documents and media files may be stored on decentralized blockchain storage networks such as Sia, Storj, and the InterPlanetary File System (IPFS).
Notaries and lawyers should learn how to use blockchain cloud storage and the WordProof blockchain timestamping and hash stamping tool as value-added services.
Trusted blockchain-friendly professionals can train or serve customers and clients to encrypt, record, backup, archive, log, verify, deliver, and retrieve important legal and confidential documents, evidence, and records. They may offer document scanning, password protection, Web3 cloud storage, and blockchain registrar services as optional business services.
They can create a Web3 blockchain domain website. They can use a Web3 browser and search engine.
They may also choose to use crypto wallets and offer to accept payment by cryptocurrencies.
Contracts, laws, and rules are being updated to accept blockchain records as immutable evidence and to accept signed smart contracts as legal documents.
1. oil painting of a civil law notary, circa 1510, by Flemish painter Quentin Massys, public domain, Wikipedia
2. oil painting of Turkish notary drawing up a marriage contract outside the Kilic Ali Pasha Mosque, Tophane, Constantinople, 1837, by Danish painter Martinus Rørbye, public domain, Wikimedia