An interview with Daniel Bigos, Gabriel Dymowski, Marcin Lorenc and Piotr Żelazko, members of the DoxyChain team (formerly DigiDocs), which took second place in the Polish phase of the Global Legal Hackathon.
Justyna Zandberg-Malec: Your project took second place in the Global Legal Hackathon. What is your solution all about?
Marcin Lorenc: We proposed basing powers of attorney for litigation, and in the future also other documents, on the secure blockchain technology. Using our application, which we are now perfecting, it will be possible to appoint or dismiss an attorney, as well as manage the circulation of powers of attorney and access the history of operations. The principal will know where his authorisation was used and who is the actual attorney in the given case. Lawyers in Poland use the right of substitution, passing on the representation of the principal to a colleague, which means that the principal doesn’t always know for sure who is actually representing him. In turn, the attorney may not remember all the cases where he was appointed to represent the client. Our solution comprehensively resolves the problem of such documents.
Gabriel Dymowski: We observed that this is a real problem. Once a power of attorney is issued, the principal essentially loses control over the document. The principal doesn’t know where the authorisation he issued has been used, where it has been submitted. With blockchain this process can be streamlined and secured.
Does this also resolve the problem of forged powers of attorney?
Piotr Żelazko: Obviously. Thanks to the use of blockchain technology, cryptographic primitives, it would be much harder to forge such a document. It would no longer be just an ordinary signature on paper or a stamp certifying a copy as authentic. The security of our system is much higher.
Gabriel: Our platform also enables a power of attorney to be revoked if the attorney acts against the principal’s interests. And that information will be immediately visible to all users.
Marcin: Moreover, the application can respond in real time, for example when a street name changes. Now in such situation it is necessary to issue a new power of attorney. In our approach it would suffice to enter the relevant change in the system.
But does this mean that for it to function, everyone would have to use your application? In other words, you would have to monopolise the market?
Marcin: Not necessarily. We are capable of integrating with other systems. Authentication could occur using cryptographic primitives, which we are also considering now, but also using an electronic signature or a trusted profile on the ePUAP system. Implementation of such solutions will be the next stage in development of our application.
But I understand that such a power of attorney will be purely digital. It can’t be printed out.
Gabriel: It can be printed out, but the printed document will have no weight. The electronic solution is also more convenient. When the lawyer goes to court, he will not have to carry a briefcase full of documents, but can just present his phone to show that he has power of attorney in the case.
So such solutions would first have to be accepted by the courts?
Marcin: In any cooperation with public entities, certainly. That’s why at first we would like to implement our solution in private entities, such as law firms, who can use it to better administer their base of powers of attorney. Only at a later stage do we want to approach public entities and show them how this can make life easier for public and commercial entities as well as ordinary citizens.
Would implementation of this solution require a change in law?
Marcin: As we know, the law does not keep pace with technology or commerce, and thus at some moment a change would be necessary, but at this stage it is not essential. The law does not prohibit solutions like the one we are offering now.
How advanced is your work?
Piotr: For purposes of the hackathon we created a project in MVP form (minimum viable product), containing key functionalities. Now we are seeking partners with whom we could launch a pilot solution. We have had several talks so far.
Krzysztof Wojdyło: Why did you decide on powers of attorney specifically?
Gabriel: We found that there was a need. It is a common document which is quite often abused, poorly monitored, and so far has not undergone any technological improvements.
In that case, what do you want to improve using technology, and why is blockchain needed? It’s a typical question blockchain startups are asked.
Piotr: Why blockchain? On one hand—and certainly most startups would say the same—it’s an interesting technology. On the other hand, its use here makes sense. First, in this particular instance it will not be expensive. Second, an ordinary database isn’t so accountable if something were to happen. Today if someone wanted to hack into a system, for example of a trusted profile, and temporarily alter a few signatures, it would suffice to hack into one firm. If I wanted to alter something on blockchain, I would essentially have to make changes to all of the nodes. And it would be much more noticeable. So at a small cost we add lots of security. And if we begin to commit states to a public blockchain, we have guaranteed immutability. Every change will be visible immediately. It will be sufficient to see whether a given node, a given entity, is acting according to the protocol. If not, we know that it must be rejected.
Gabriel: So from a business perspective blockchain replaces the trust that doesn’t always exist between different entities. It provides grounds for believing that what is created will be immovable and uniform.
So as I understand, by the very fact of placing something on the blockchain that is strongly linked to a power of attorney, we obtain security that a traditional system does not provide. And the security comes from the fact that it is easy for us to catch a change.
Gabriel: Exactly. We have guaranteed immutability of data.
Daniel Bigos: And we can trace how the state has changed step by step and how it was at any given moment. This can also be useful.
So let’s talk about the technical side. What kind of blockchain are you using at this stage?
Piotr Żelazko: A “permissioned blockchain,” on which consensus is ensured by “proof of authority,” that is, one where only selected entities, selected nodes, can create new blocks. We operate on the open Tendermint project. Tendermint is served by a peer-to-peer network and ensures consensus. We contribute the entire protocol on which the project is based. This is our minimal operative version. Now we are planning to swap out Tendermint for something else. We have been considering whether to use the Hyperledger Fabric project, to write something of our own (which would probably not pay off), or using Ethereum or Bitcoin code.
Why did you decide on Tendermint?
Daniel: That was a decision for purposes of the hackathon. Tendermint is a lot simpler to use than Hyperledger, which has huge documentation and you have to write smart contracts. We weren’t sure we would manage to hook up to the system in such a short time. And we had worked with Tendermint in the past, when writing an engineering work, so we determined that this application would work. And it did.
What do you insert into the blockchain?
Piotr: Transactions. We add successive blocks, i.e. sets of transactions, to the blockchain. There are several types of transactions. The first is adding a new user. We must somehow confirm that Jan Kowalski, with a certain PESEL identity number, can take part in the blockchain. And guarantee that if he signs something, it is actually him. We do not disclose any personal data in doing this. In other words, Jan Kowalski, designated as an institution or citizen, is a public key. That is the first thing. The second type of transaction is adding a power of attorney, that is, inserting information in some form—not a form that discloses the entire document—that a power of attorney was issued between two parties. The power of attorney was issued, but we don’t disclose the scope of the power or the parties. We are speaking only of public keys. The third type of transaction is exercising the power of attorney. Thus if the attorney begins to exercise the power, information on this appears in the system. Such a transaction must be signed both by the attorney and by the person who accepts the action. The fourth type of transaction would be revocation of the power of attorney. The principal or the attorney transmits information that the given power of attorney has been terminated and is no longer in force. Powers of attorney could also expire on their own. The protocol would ensure this. At the moment we are talking about powers of attorney, but we intend to expand to a much larger quantity of types of documents. But only when the law allows us to do so.
So you assume automation of the termination of a power of attorney?
Marcin: Yes. The system simply will not allow exercise of the power of attorney. When adding a power of attorney, we can define the time of its expiration. Or we can add another type of transaction. We can specify that the power of attorney will expire after it is used three times, or when the actions expressly defined in the scope of authority have been performed.
I also understand that your solution is abstracted from the specific legal system and how the forms of powers of attorney or related declarations of will are regulated in that system. So your system is not geographically limited?
Piotr: Exactly. The only thing limiting us is the possibility of inscribing information in the form of bits, bytes and so on. And we are in a position to record all of that in this form.
And I understand that the nodes may differ? In other words, both private and public entities?
Piotr: Definitely. A basic issue is which type of node may be entered in the blockchain. Which has the authority to create new blocks and which does not. To be sure, anyone can create a “lightweight node,” that is, a node that looks at what is happening on the blockchain, looks to see whether the state agrees, but does not hold the entire state. It may hold for example only the state of the transactions (the powers of attorney) that are of interest from their point of view.
How would describe the practical business benefits of your solution?
Marcin: Primarily to save time. It sometimes happens that someone must revoke a power of attorney in several places, or even dozens of places. This is a laborious process, but in our system it take just a few seconds. It’s similar with powers of attorney granted at a distance. If a client in Australia wants to send us a power of attorney quickly, with this technology they can do so instantly, without making scans or transmitting confirmations.
Daniel: The parties also have the certainty that the power of attorney hasn’t been revoked. Because if it were revoked, that would be visible immediately in the system. This increases safety and trust.
Gabriel: The principal can also see what is happening in his case. In the application he can check where the power of attorney has been submitted, and what the attorney has done in the case assigned to him.
Piotr: Besides that, our system can be helpful in ordinary, everyday activities. Now, for someone to pick up my mail, I have to submit authorisation at the post office. But I could insert this authorisation into the system, even when the person is already at the post office. It’s like with bank transfers: we make a transfer with the Blik system and we can pay immediately. The convenience is incredible. So we’re thinking not just about the world of lawyers, but also ordinary people who need to pick up the mail.
Justyna Zandberg-Malec: If someone wanted to implement such a solution, how quickly could you provide it?
Piotr: That depends on how developed a product we have in mind. But we estimate it would take 6 months to a year.
Who might be interested in this solution?
Marcin: Certainly big firms, corporations, where many repetitive documents are issued within a short time. In the future also public offices and various institutions, but at first we are talking about private entities. The market will obviously test us. We will see whether the market is mature enough to use such a solution. That will be apparent when we enter the market with this product.
Daniel: In the future this could be integrated with state systems, such as ePUAP. It would be awesome to do something like that.
Returning to the Global Legal Hackathon, how do you recall it a month later?
Daniel: I didn’t sleep at all on Saturday night.
Marcin: But that’s because we didn’t know if we would win first or second place.
Gabriel: We had a lot of fun. For a long time we wanted to take part in something like this, but we only decided a few days before the competition. We had some trouble putting together a team. Lots of our friends were unavailable because we didn’t find out about the event until quite late.
Piotr: There wasn’t much time and there was a lot to do. We applied scrum solutions, but slightly adapted. For example, we made summaries not once a day, but every few hours, to know who is at what stage. We developed our own working style, which fortunately was effective. It was a great help that we already knew each other. Our team of four had already cooperated on several recognised projects, so we trusted each other and worked together well. The organisers provided a lot, including interesting training.
Daniel: Piotr and I, as technical people, learned a lot about business things. How to sell a product, how to prepare for public appearances. That is very helpful knowledge for a startup.
Piotr: We met lots of positive people. The mentors approached and talked with us, suggested development paths to us. For example, to make the main product an entirely different segment than we originally had in mind. That completely changed our vision. So we are grateful to the mentors for their help.
Marcin: The rivalry as such was maintained at a quite high level. There were a dozen or more teams that were truly strong. Such healthy competition drives us to work even harder.
Gabriel: The encounter of people from different worlds—technical, business, legal—was also interesting. Usually it is only tech people that take part in hackathons.
Daniel: And the food was good. Overall, the event was excellently organised. It was all about hard work and developing cool projects.
Piotr: That’s why we encourage anyone who has some concept to join the next edition.
Gabriel: And we are taking up the hard work of completing the project, of course not restricting ourselves to powers of attorney. Anyone who is interested in our solution should visit our website, www.doxychain.com. We strongly believe we will succeed.
Interview conducted by Krzysztof Wojdyło and Justyna Zandberg-Malec