Recently the new NEM Apostille White Paper was released, a document which explains and demonstrates the technology behind a brand new notarization and timestamping system natively implemented in the NEM Blockchain.

NEM is one of the top 10 blockchains (by marketcap) worldwide and has been recognized by the Chinese government as one of the most secure blockchains examined.

Blockchain Notarization

One of the core functionalities of any Blockchain system is immutability. This prevents hackers or malicious individuals from acting in an illegitimate manner and tampering with historical records. This functionality is highly disruptive, as up until the birth of Blockchain technology, maintaining immutable records has been a massive headache (if not impossible) for computer scientists, system administrators and auditors, companies, governments and individuals alike.

In mid-June 2014, Factom introduced the concept of Blockchain notarization to the Blockchain scene, inspired by some previous initiatives built on top of Bitcoin. However, development of Factom has not yet reached the production phase. Factom separates the Data Layer (notarizations) from the Value Layer (coin, funds). This allows anyone to notarize documents in a separate system, one which anchors its records to the Bitcoin Blockchain. This ensures the immutability of the data.

To make this possible, Factom requires Federated Servers, blockchain nodes, which run all of Factom’s operations and submit the results to the Bitcoin Blockchain every 10 minutes. But this process is not the most atomic nor transparent of solutions. Federated Servers are re-ranked every 4 hours by an election of the users, who have voting power dependant on the Entry Credits they’ve bought and used in the last six months.

Logically, this system of Federated nodes is not the most secure. They were amazingly innovative in 2014 when even Ethereum wasn’t yet released. However, Factom simply cannot compete with the technological advances of the last two years. Factom’s software is still in its Beta testing phase, so it is currently very risky to use, and companies may need to wait before it is a proven, stable solution.

A Holistic Blockchain Notarization System

The need for cheap and secure notarization and timestamping is crucial for the core operations of lots of the companies and governments on Earth. Until now, however, the solutions weren’t strong enough for production in our day to day transactions.

Following its commitment to build Blockchain business solutions natively on their platform, the NEM team has developed Apostille, a holistic blockchain notarization system. In this system, notarizations are not static one-time timestamps, but instead can now be dynamic, moving, changing, and updatable values on the blockchain. Companies or applications using and building upon this service can determine how their Apostille accounts are made and interact with the authority given by namespaces, the value and status represented by digital assets sent to that account, and the information sent as memos. Furthermore, they can optionally customize the open-source Apostille system to make an application convention framework to best utilize the above features.

The key innovation of the Apostille blockchain notarization service is not to just make a one-off timestamp of a fingerprint of a document, but instead to also take that document and combine it with the user’s account information to make a special and unique private key just for that file. That file’s dedicated private key is used to make an hierarchical deterministic (HD) account. The system then makes a fingerprint of the document by hashing its contents and then signing that hash with the private key of the user. That signed fingerprint is sent in a transaction to the HD account created from the file’s private key. This HD account now contains both file metadata and its fingerprint, so it can be said to be “colored” with that file.

Another thing about NEM Apostille is that these functionalities are native on the blockchain, so no trust is required, just like transactions. NEM Apostille is in the production stage, so you don’t have to worry about risky Beta software breaking and can be used via the NanoWallet available here.

Apostille for Mijn

Another advantage of NEM technology is that it is also used on the Mijin permissioned chains made by Tech Bureau. Mijin chains use the same APIs as the NEM chain and take advantage of the same core features of NEM and therefore can also run the Apostille service, but offer the advantage of high throughput up to 1000’s of transactions per second with no transaction fees to the consumers. Since a mijin chain is run by a private business, the consumers must trust the company providing the chain, but if anchored to the NEM public chain, it can provide full auditability and users can trust that the history hasn’t been altered.

Final Thoughts

As a summary of this article, Factom has been a good first approach for Blockchain notarization of documents, but its implementation is not prepared for real industry problems. It also relies on different protocols which have to be strongly coordinated, leaving more to go wrong.

NEM, on the other hand, has developed an integral solution in its core, offering extra features used to build Apostille, in a native, efficient and tested way.

The NEM team would like to thank Andreu Rodríguez from Atraura Blockchain for contributing this blog and Nicholas for reviewing it.

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