New Legal Theory: How Do We Test It?
By Joseph Mark Haykov
June 13, 2024
Preface
Before we delve into the concept of notaries, we should note the following. From a legal perspective, fraud is defined as making false claims about financial transactions, including double-spending Bitcoins. This is equivalent to knowingly and purposefully (not accidentally) bouncing a bank check, which is illegal and akin to passing counterfeit money. The security of a blockchain is established by a set of collected digital signatures, where a witness effectively attests to the truth of a claim by digitally signing it with their private key, matching the public key that uniquely identifies the signatory. So, what digital signatures are collected by the Bitcoin blockchain?
Two sets of digital signatures are collected, collectively ensuring the security and authenticity of a blockchain. First, the debits to spending accounts are authorized by having the owners of spending wallets sign the spending requests with their private key, matching the public key of their wallet. This first set of digital signatures ensures that no unauthorized funds are spent.
The second set of digital signatures is collected as the miners digitally sign the hash value of the update blocks they generate, using the private key matching the public key of the miner’s wallet. This ensures the immutability of the blockchain, as nobody can go back and modify any transactions in old blocks and re-compute the subsequent hashes without knowing the private keys of all Bitcoin miners who added all the subsequent blocks to the blockchain.
Here, TNT is provably more secure than Bitcoin, simply by virtue of the fact that we collect the same set of digital signatures as Bitcoin, and then many additional ones. The additional signatures fall into two separate categories:
In addition to digital signatures authorizing the debits, we also collect separate digital signatures authorizing the incoming credits.
In the case of Bitcoin, only the miner’s wallet digitally signs the hash value of the entire block update. However, in TNT, every single wallet must digitally sign the hash value of the block update for it to be considered valid and accepted into the TNT blockchain.
On account of the fact that the TNT blockchain collects additional digital signatures and stores them in the TNT True-NO-Trust blockchain log file format, valid block updates are defined as those that contain all the mandated additional signatures, as specified above. In a TNT blockchain, just as in the Bitcoin blockchain, only the block updates that have collected all the necessary mandated digital signatures are considered valid and appended to the TNT blockchain, making it provably more secure than Bitcoin or any other competing alternative with fewer gathered witness signatures.
Introduction
The Transparent Network Technology payment processing system mandates that the creator (or owner) of each and every single TNT wallet, or TNT bank account—both terms having precisely identical meaning in this context—must, upon creating the account, provide two public keys. The first public key corresponds to a private key that must be used to digitally sign all valid debits (authorizing the spending or expenditure of funds). The second public key, called the credit dual-approval key, corresponds to a private key that must be used to digitally sign incoming credits (allowing the recipients to decline unwanted credits by not digitally signing the incoming payment).
Of course, if every single wallet, regardless of receiving or sending any payments, was required to digitally sign the cryptographic hash of every update block in the blockchain with its credit dual-approval private key in order for the update block to be considered valid, accepted, and added to the blockchain, then this requirement would make the blockchain file provably immutable. Any modification of a historical block would require every single wallet to digitally re-sign the modified block’s adjusted cryptographic hash. However, we can make the system even better by including multiple public notaries as bank clients, providing real-time independent auditors/verifiers.
A notary public is a public officer constituted by law to serve the public in non-contentious matters usually concerned with estates, deeds, powers-of-attorney, and foreign and international business. Their primary functions include:
Authentication: Notaries authenticate the execution of documents, ensuring that the signatories are who they claim to be and that they have signed the document willingly.
Attestation: They attest to the genuineness of signatures on documents. This includes witnessing the signing of documents and providing a notarization seal to confirm that the signatures are genuine.
Certification: Notaries can certify copies of original documents, confirming that they are true and accurate reproductions of the originals.
Acknowledgment: They take acknowledgments, which means they verify that the person signing the document has done so freely and understands the content and implications of the document.
Legal Theories and Concepts
In legal theory, the notary public serves as an impartial witness to the signing of documents, ensuring the integrity of the transaction. This is based on the principles of:
Impartiality: Notaries must be neutral and have no personal interest in the transactions they oversee.
Reliability: Their certification is relied upon by individuals and entities to confirm the validity and honesty of the transaction.
Preventing Fraud: By verifying the identities of the parties involved and ensuring that they understand and voluntarily sign the document, notaries help prevent fraud and coercion.
Jurisdictional Variations
The specific duties and authority of notaries can vary widely between jurisdictions:
Civil Law Systems: In many civil law countries (such as those in Continental Europe and Latin America), notaries have a more significant role and greater legal authority. They may draft and keep the original versions of legal documents, ensuring their legality and proper execution.
Common Law Systems: In common law countries (like the United States, Canada, and the UK), the role of notaries is generally more limited to certifying signatures and administering oaths.
Practical Applications
Real Estate Transactions: Notaries are often used to oversee the signing of real estate transactions, ensuring that all parties are properly identified and that the transaction is recorded correctly.
Affidavits and Statutory Declarations: Notaries can administer oaths and affirmations, which are used in legal proceedings and official statements.
International Transactions: For documents that will be used in foreign jurisdictions, notarial services are often required to ensure that the documents are recognized and accepted.
Summary
In summary, the legal theory and practice surrounding notaries involve their role as trustworthy, impartial witnesses who authenticate and certify the honesty and integrity of transactions, thereby enhancing the legal certainty and reliability of the documents they notarize.
By including a sufficiently large number of public notaries (such as JP Morgan, the local city hall, or even the US government in a dual role as AML custodian) as bank clients, every single transaction becomes notarized in addition to being approved by each and every single bank client. This provides more security and certainty of immutability than any competing alternative proof of authenticity of any other payment system or fractional ownership system in general, under the existing concept of law. In this sense, there is no possible competing cryptocurrency blockchain system that provides more proof of immutability than the TNT true-no-trust file system, where each bank account must digitally sign the cryptographic hash of each and every single blockchain update block. This exceeds the immutability of competing alternative systems like Bitcoin, which requires the digital signature of merely one wallet—the Bitcoin miner—as proof of authenticity, a provably and clearly far less stringent security requirement than the one mandated by TNT, where all wallets, not just one single wallet that happens to belong to some random wealthy or lucky unknown miner, must sign the hash.