A Distributed Network Model for Digital Contracts

Abstract

Signing documents using electronic signature services can pose security risks due to problems pertaining to signature tracing, forging, and identity verification. These services also rely on centralized networks, which require that the signing parties trust the provider’s ability to keep their documents and sensitive information safe. However, the shift to digital contracting remains essential, as the traditional contracting process is often complex and inefficient. This work proposes a distributed network model that allows any two parties to sign a legally binding agreement using verifiable digital signatures. This eliminates the need for third-party mediation, which results in a more cost-effective and time-efficient contracting process. Integrating a hybrid encryption scheme and full client-side processing in this model ensures the confidentiality of the contract and the privacy of the parties involved. This, in addition to the model’s emphasis on minimizing traffic and power consumption, results in a highly scalable and robust ledger, with the potential for integration with blockchain or other Distributed Ledger Technologies (DLTs). In conclusion, this work is a step forward towards the adoption of digital contracts and their integration with current legal frameworks. Eventually, it could aid in clearing the confusion that surrounds smart contract technology.