I was recently traveling in eastern Europe leaving a country that was a former member of the Soviet Union. Before boarding the plane, I was stopped by that country’s immigration officers. They asked to see my travel itinerary, and I showed it to them on my United mobile app.

What followed could only be described as a scene from an old Abbott and Costello movie where we went back and forth, me showing my app and the officer demanding to see my “papers”.

Why this comedy of errors? Because while the travel and airline industry has evolved to trusting data without paper, the rest of the world has not. We believe in the expression “put it in writing”. We want to see it on paper because that makes it true and unchangeable.

Paper Mindset

Currently, the mindset is that data must be attached to a “physical” piece of paper - whether that be a PDF, a printed pay stub, or a scanned image of a document, to make it “true”. As technology moves forward, this mindset will no longer be valid. Data will be collected directly from the source without paper support ever existing.

Many parts of the process in consumer services (lending, credit cards, insurance, etc.) involve collecting data from various sources and using it to make decisions. While we have moved to receipt of that data in pure data form, we still have it followed up with paper (PDF or images) to “support” it.

That is because these industries have grown accustomed to having to recreate the truth in case of a dispute over accuracy or authenticity of documentation. Whether you’re dealing with audits, foreclosures, lawsuits, or regulatory reviews, it’s always better to have the proof already than to be forced to try to recreate the truth. But the real question we should be asking is why don’t we trust data alone? The answer is simple:

Because data can be changed … In fact, it is designed to be changed, updated, and dynamic.

Blockchain as a source or truth

A popular critique by blockchain naysayers is that just because data is on the blockchain doesn’t make it true, but only ensures that it is in the same format and unchanged from when it was originally written.

We are still faced with the core problem that data written to the blockchain doesn’t make it “true”, it just makes it permanent or immutable. So, how do you know the information that you are inputting onto the blockchain is correct? Human nature (with ill intent or not) is prone to make mistakes.

What makes this powerful use of immutability so valuable is that even the errored data is documented. Over time you can track the errors along with the corrections in a timeline of data provenance. The more data you collect associated with previous data, the more it becomes validated/authentic.

The Proof is in the Blockchain

Sure, it sounds well and good, but why would you give up that physical piece of paper for something you can never touch or feel?

I’m going to try and break it down in the easiest way possible:

Documents A, B, and C live inside the centralized, firewall-safe database of Company X.

Documents A, B, and C are then used to create a cryptographic proof (or hash) with minimal metadata and information about the original document used for search purposes. Think of the cryptographic proof or hash as a digital fingerprint that is created from a one-way algorithm developed by the U.S. NSA.

This hash is then placed on a blockchain. Recreating documents from a hash is computationally impossible. But the power is in the fact that only the original document can be used in the algorithm to recreate the hash.

The original documents A, B, and C are still stored in Company X’s database.

If document A, B, or C are changed in any way, they will not match the original hash. If you think you have the original document but it doesn’t match the hash, then you have immutable proof that you do not have the original.

Being able to track which exact item had changed, whether a word, comma or entire paragraph, is dependent on an individual company’s business processes.

If document A, B, or C are ever lost, you still have a proof that they existed at some point in time.

This will be the future of data: 1) verifying your data or documents against an immutable, decentralized, third-party source, and 2) allowing for others to whom you may sell or transfer the documents to also validate, providing authenticity multiple times over, and thus giving a stronger defense for lost documentation.

As time moves forward, data is only going to become increasingly more valuable. Where the proofs of that data are stored will also become more valuable because we are migrating away from paper. Original sources of truth will never be irrelevant.