How do you actually store sales contracts on blockchain?

[utdrmac]

I've been "around" bitcoin for several years now and one thing has always puzzled me. One of the things I tell people new to BTC on why it is so great is when I describe the purchase/sale of a car, and how that contract goes on a ledger that cannot ever be changed.

I give this example, but I have no idea how this would actually work. Can someone describe the process to me? In order for it to be legal, all the documents would have to be signed and sent to the state (I live in TX) to properly transfer ownership.

Would I scan all those documents into 1 PDF and somehow "attach" them to the block containing the transfer of 5 BTC to my address (assuming I'm selling the car)?

If I had to go to court to prove that I sold/bought said car/property to/from person X, how would the blockchain be useful to me in proving my case?

[AgentofCoin]

I've been "around" bitcoin for several years now and one thing has always puzzled me. One of the things I tell people new to BTC on why it is so great is when I describe the purchase/sale of a car, and how that contract goes on a ledger that cannot ever be changed.

I give this example, but I have no idea how this would actually work. Can someone describe the process to me? In order for it to be legal, all the documents would have to be signed and sent to the state (I live in TX) to properly transfer ownership.

Would I scan all those documents into 1 PDF and somehow "attach" them to the block containing the transfer of 5 BTC to my address (assuming I'm selling the car)?

If I had to go to court to prove that I sold/bought said car/property to/from person X, how would the blockchain be useful to me in proving my case?

Basically,

(1) You would scan all finalized signed agreements into a PDF or JPEG and then hash that file.
That file and all of it's contents are now representable as that hashed string.
If I change that hash string by a single character, the contents of the file would not match.

(2) You then either use the Bitcoin blockchain or an altcoin blockchain and when making a
transaction, you add that hashed string as one of the outputs (which the Bitcoin blockchain
will not recognize as a standard output). You do not need to transfer 5 btc with this TX, it
could be as low as a dust transaction, and you could pay or already have, for the property
in cash. In theory, when you signed the document, you would then or have already exchanged
the property/money. You would then add this file's hashed string after that exchange, thus you
would only pay the dust limit, plus a miner fee to add this hash string to the blockchain in
memorialization.

(3) After so many blocks pass and in the future, you could use that block number and TXID,
(its non-standard output which is the hashed representative) as proof that the original finalized
signed agreements were added to the blockchain around that date, allowing the ability to prove
that the document is not a modern day fabrication, but did exist at that point in time.

(4) You are not adding the file(s) to the blockchain itself, but only an anchoring citation. If you
or another party to the agreement no longer possesses the fully executed agreement, and the
document does not exists in any governmental record, then the "anchoring citation" that you
performed in the blockchain is worthless. It is dependent on the original documents still being
retained in their physical form or the PDF/JPEG form.

---

The reality is that this part of record keeping/registering in conjunction with law and property
is very insufficient. Ultimately, no matter the circumstance, a trusted third party, such as a
governmental/judicial body, will need to intervene at some point. Most property can not be
exchanged between humans on a blockchain system without governmental registration,
unless that blockchain is maintained by a governmental office itself. All physical property
is normally registered and regulated by your government.

This system of data being anchored in the blockchain can only be useful for personal
agreements between people/entities that do not wish to register with governments or file
with judicial record systems, such as employment agreements or agreements to perform
work and etc. If later in the future, you wish to litigate one of the parties due to a breach,
this blockchain anchoring system only proves it was added to that blockchain at that date
the block incorporated your TX. It will not prove that your agreement is legally sound or
binding or etc. As I said prior, a third party, such as the Courts, will still need to intervene
and interpret the terms and decide the matter.

The truth is that the blockchain, used in this manner, is inefficient and worthless in
many use cases. If you wish to prove you created something novel like a new innovation
or a piece of art, that is interesting and helpful. But human health records, property
settlement agreements, marriage/divorce/birth records and etc is not at all necessary
whatsoever. This anchoring system is only necessary if governments do not exist.

The blockchain was only really designed for unregulatable currency. Using it
for "unregulatable documents of regulation" is really quite amusing.

[utdrmac]

Interesting. I even just watched this presentation by Goldman Sachs, http://www.goldmansachs.com/our-thinking/pages/blockchain/, and they too gave the example of buying/selling a car and some concert tickets.

I'm curious how they think the blockchain will be used to immutably assure sales, accounting, and transfer of ownership.

[AgentofCoin]

Interesting. I even just watched this presentation by Goldman Sachs, http://www.goldmansachs.com/our-thinking/pages/blockchain/, and they too gave the example of buying/selling a car and some concert tickets.

I'm curious how they think the blockchain will be used to immutably assure sales, accounting, and transfer of ownership.

Immutability in a blockchain system only actually exists through the
decentralized and independent node network. Immutability is only a by-
product manifestation of that properly functioning validation system. Through
enforcement of the rules by a true decentralized node network (verifying
nodes) the blockchain can maintain a certain probability of immutability.
Without that independent verification of the miner's block work and
enforcement of current rules, immutability is always 0%.

If a cryptocurrency or a blockchain system is created and/or maintained by a
node network of banks, corporations, or government agencies, any belief of
immutability of this chain is always wrong and an illusion. Banks and
corporations are obviously legally regulated and mandated by law to comply
with valid court orders and governmental instructions. If a government deems
something as bad/illegal/confidential/national security interest/etc on a
blockchain that is maintained by the banks or corporations, obviously they
will be able to "undo valid block work". When this occurs, any illusions that
their chain was immutable falls away and they will then plainly see why it
was always 0%.

The "immutability probability" only comes about because the enforcement of
the rules are disbursed between all participants, even average citizens. Not all
participants need to perform this enforcement, but all that do willingly and
altruistically are protecting the network from many different forms of attacks,
whether internal or external to the network. They are the censorship-resistance.
These people are "Soldiers of Immutability" who stand watch to protect
everything that has been built and whats to come. By their voluntary acts,
Bitcoin exists today as immutable and secure. Without them, Bitcoin becomes
one of the greatest scam/tragedies of modern day, IMO. It transforms from a
"digital truth" into a OneCoin scam/ponzi immediately.

Thus, immutability of a blockchain that is created and maintained by a
corporation or bank is automatically not immutable since they are legally
compellable and responsible.


As for how to create a blockchain system for legal documents/property
exchange (ignoring immutability since I addressed that above), that is a
whole other issue. The truth is, ultimately a governmental registration
system needs to exist with this corporate/bank blockchain since legal
property is being recorded. For example, a blockchain can not replace a
court filing system or governmental vehicle registration system, but
could be used as an addition to it. The problem is that the addition is
redundant and brings no (new) value to the current system. Even if a
government had their own document blockchain, it serves no higher
purpose than the current systems they already use.

The blockchain was ONLY created to circumvent the law and disburse
liabilities among untrusted participants. It is that simple, yet so massively
misunderstood. The blockchain was the mechanism that needed to be crafted
in order to perform that which is not allowed and controllable under the law.
It is not a simple ledger. It provides for much greater things.

[BTCwoker]

In our system, contracts, documents, and transactions dealings are kept in proper and definite ways. These ways provide the complete security to the assets and boundaries of the organizations. Meanwhile, they verify and launch account event and identities. In addition, by growing interaction between communities, they guide social action. Furthermore, these are critical issues, and just like a rush-hour jam tricking a formula one race car.
Whereas, blockchain technology is ready to solve this problem. This technology is a heart of each currency including Bitcoin. An open ledger who keeps the record of the transactions between two parties. The ledger has the ability to perform itself.
Accordingly, with the blockchain, we are able to store our data in digital form. Basically, this is the digital world everything including data, task, agreements, contracts, and signatures are the store. You have complete authority to keep safe this data or share it with others. This is the vast potential of the blockchain that machines and algorithms are free to maintain a system who keep the things managed. In that scenario, future of banks, brokers, and lawyers is not looking bright.
This is clear that blockchain redefines the infrastructure of the system. Whereas, it shares the potential. It is not only security issues but blockchain insurgency will be the cause of fall of other managing systems. The blockchain adoption process is slow, because it takes a long time may be decades.
Pattern of technology
What is the blockchain technology’s strategy and transformation process. Let’s have a look at an example of TCP/IP (transmission control protocol and internet protocol). TCP/IP first introduce in 1972 and as the basics for the email on ARPAnet.  TCP/IP twisted the circuit switching system to its head. Whereas, the new protocol digitalizes the information first then break it into small separate packets with information and addresses. these packets of information decided their own way when they get into the network. In addition, receiving and sending of the nodes on edges has the ability to knock down or congregate these packets. Whereas, TCP/IP provide the platform where data is open with no middle authority.
Traditional communicators ignore the TCP/IP because of its open behavior. But, late in the 1980s and 1990s too many organizations had adopted this technology. In the late 1990s, companies emerge and introduce the new plat forms. Accordingly, sun drove the development of the Java is one of the examples.
Although, companies follow the trend of blockchain already. Such as communications changed by skype, google provide a wide data of information at one click only.
Complete framework
Blockchain technology is new in the market and will take a time period for transforming. We can’t predict that how much time blockchain will take for the transformation of the technology. Whereas, two dimensions are highly effected to this process. First is uniqueness in the system and second is its complexity.
A framework is planned to divide these related dimensions into the quadrant and every quadrant will represent the new stage of the development. This framework will also guide the process of the execution of the technology. Following are few quadrants.
Single use    
First quadrant is quite simple with low-novelty and focused solutions at low cost. Bitcoin is also fall in this quadrant. As, payment expectations of bitcoin in 2016 was $92 trillion, but this expectation exceeded
Localization
While you are promoting your idea among the target audience you need high novelty. In that scenario, by following the network process, blockchain has ability to set-in into the business. To create locality into the plan, companies are connected with the distributed ledger.
Initially, blockchain takes place in the financial sector. Like Nasdaq is working with chain.com... one of the providers of the infrastructure of the blockchain. Meanwhile, many other organizations like JPMorgan, the New York Stock Exchange and much more trying to adopt the blockchain technology.
Substitution
This quadrant is consisting on single-use and low novelty. But it is with the high coordination. These innovations face adoption barriers. A substitution that aims to provide easy and affordable services, is stellar. A substitute of the blockchain.
Transformation
This quadrant has the ability to manage all process of agreement, standards, and processes etc. Whereas, the adoption of this substitution required major changings like legal, political and social. Smart contact is the transformative example of the blockchain technology.
Conclusion
Each technology needs decades for its adoption. While blockchain technology acceptance is fast as compared to the other technologies.  

[utdrmac]

Accordingly, with the blockchain, we are able to store our data in digital form.

Explain this in more detail. Explain how, using the blockchain, I store the fact that I own a car, house, etc.

I want to sell you some concert tickets. Explain how the blockchain secures this transaction.

[AgentofCoin]

Accordingly, with the blockchain, we are able to store our data in digital form.

Explain this in more detail. Explain how, using the blockchain, I store the fact that I own a car, house, etc.
I want to sell you some concert tickets. Explain how the blockchain secures this transaction.

Majority of that user's statements are fluff that doesn't actually explain how the
system works. Most statements are obfuscating or are plainly saying nothing.

To answer since I assume BTCWoker will never actually answer your question directly,
it can not secure your transaction example. That is impossible and like saying "When I
exchange my car for concert tickets on Craigslist, how does Craigslist secure that?". The
answer is that it does not. A blockchain used for documents or property is not secure like
the Bitcoin network and any belief or assurity of security comes from guarantees of a third
party.

In the most simple terms, the only reasons why bitcoin tokens are secured through the
blockchain is because they are actually the same entity. For a blockchain to secure
documents or property in the same manner, that document or property needs to be
represented as a ledger correspondent that is not a monetized token. Since the answer
for a new ledger correspondent has not been envisioned or created yet, blockchains can
not be used for anything other than currencies (, in a novel purposeful manner).

Of course, you can use a "blockchain" for anything, but that doesn't mean it will work the
same way or with equal security as the Bitcoin blockchain. All improperly used blockchains
relies third party intervention. The blockchain was originally designed to circumvent this.

The "blockchain" only works because it is 1 part of a 3 part system. Without the other two
systems, the blockchain serves no higher purpose. The blockchain is more than a ledger.