The Proof of Existence website shows recently uploaded files that have hashes on the block chain.This, in effect, uses the public and ledger-like nature of the block chain to store the proof of your file, which can later be verified should an issue of authorship or dating arise.“Basically, by inserting the cryptographic hash of the document in a transaction, when that transaction is mined into a block, the block timestamp becomes the document’s timestamp,” said Aráoz.As well as time-stamping, Proof of Existence is also a way to make sure that files are what they are supposed to be.As Proof of Existence says: “All we store is a cryptographic digest of the file, linked to the time in which you submitted the document. In this way, you can later certify that the data existed at that time.”Developers, for example, can use the service to later verify versions of their code, inventors can prove they had an idea at a certain time and authors can protect their works.And this is can be verified via the hash generated during a block chain transaction, said Aráoz:“You put the hash next to the download link and check the hash yourself. If someone compromises your server, a hacker cannot modify that.”No-output transactionsAráoz indicated that there are a number of potential applications for the service given its ability to prove that a document or piece of code was verified at a point in time and that the bitcoin ledger is perfectly designed for the task.Effectively, the scripting capabilities that exist within bitcoin’s block chain allow for transactions to have no output. This means that, while a small amount of bitcoin goes into the system (currently a 0.0001 BTC fee for miners to confirm the transaction within a block), no BTC needs to be sent to a recipient.Hence, the block chain has the built-in functionality to incentivize miners to carry out the necessary hashing to verify a document.This functionality is key to utilizing the block chain for reasons other than just moving BTC, and it is clear that this no-output design has potential to power innovative ideas beyond just virtual money. 
Could other ways of using the block chain help to create more transactions and thus mining incentives on the bitcoin network? Source: Blockchain.infoProtecting digital propertyGiven this potential, it’s possible that the implications of solutions like Proof of Existence might be even more valuable than the per-bitcoin price many investors are fixated upon today.Digital property can sometimes also be considered intellectual property, and block chain technologies could essentially prove ownership of such digital property, according to Aráoz, who explained:“For example, if you are writing a paper or you have an idea for a patent, in some cases you need to prove that you owned the idea or the paper before someone else.”Verification is example of the block chain’s potential outside of just monetary innovation.That’s something venture capitalist Fred Wilson is interested in, and recently said:“Right now you need someone to be the arbiter of identity – either Facebook, Twitter or Google [...] I think you could do the same thing with a block chain architecture.”The block chain could help to better prove digital identity and property, giving people more ownership of personal data.Companies like Google, for example, promote the ability for users to control data from its services. Facebook recently added the option to login to services anonymously to reduce the possibility of user data being spread out among third-party applications.However, the fact of the matter remains, those services are centralized and always will be, while block chain technologies are better suited for distributed cryptographic trust systems.Legal backing neededThe question raised by the service, however, is how quickly institutions such as the US legal system will adopt this new type of public validation and identity.Given that the implications of bitcoin in the world of finance are difficult for many to comprehend, realizing the power that the block chain holds as a record of fact might be even harder. Aráoz understands this is currently an issue and said:“So you can either pay for a notary, or you can use Proof of Existence. In practice, [the block chain] proves it. The thing is, it is not yet widespread enough so that it can hold [up] in court.”However, all it would take for acceptance is a favourable ruling in one case where the block chain certifies that something happened at a particular time.When (or if) that happens, it might allow bitcoin’s general ledger to be used as a mainstream method of verifying document authorship and contents or software versioning.Court rulings in the US have made headway in making bitcoin as a currency more tangible, at least from a legal standpoint.Last year, a Texas Court ruled that bitcoin is a form of money, which then gave the Securities and Exchange Commission (SEC) the means to justifiably prosecute a man in a purported bitcoin-based Ponzi scheme. 
The block chain’s use as a verification system will require regulatory clarity. Source: CoinDesk Q1 2014 ReportThere will be more court rulings like this, and if courts around the world start to look favourably on distributed systems like bitcoin that can offer undeniable verification of existence, that will ultimately validate this concept as something that has real-world and mainstream applications.Digital information image via Shutterstockblock chaindigital identitydigital propertyProof of ExistenceverificationOriginal author: Daniel Cawrey