First-ever qualified electronic signature for blockchain
Till now, conducting secure transactions using blockchain technology was impossible because there was no way to send a legally binding electronic signature. To remedy the situation, ZHAW and Swisscom have collaborated to develop the first application capable of entering a qualified electronic signature on the blockchain, making it possible for legally valid contracts to be concluded and assets transferred.
Blockchain technology is changing how goods are exchanged on the Internet – by allowing transactions to be processed transparently and independent of a centralised organisation (e.g. a bank). Up to now, however, entering a qualified electronic signature on the blockchain was impossible. Yet: only a qualified electronic signature can replace a physical signature for contracts and other legal transactions that generally have to be concluded in writing and signed by all parties. The written form serves as legal proof, prevents impulsive decisions and provides information for the counterparty.
Smart contract does away with signatures
In the past, the inability to submit a valid written signature posed an obstacle to many parties who wished to use blockchain technology to conclude legal agreements. Now, an interdisciplinary team made up of lawyers and engineers at ZHAW have collaborated with Swisscom to develop the prototype for a «smart contract» that satisfies the requirement of the written form. Smart contracts are computer programs that execute the exchange and transfer of assets. The application developed at ZHAW runs on the Ethereum blockchain and has an interface linking it to Swisscom’s service for signatures, where qualified electronic signatures can be appended to blockchain transactions in compliance with legal requirements. After the signature has been authenticated, the requested action – for instance, transferring an asset or concluding a contract – is processed on the blockchain. According to ZHAW expert Harald Bärtschi, the technology eliminates the legal uncertainties surrounding such transactions. «This is especially important in Switzerland, because we require the written form in claims and other legal transactions. Until now, it was often unclear whether transactions on the blockchain were legally valid.»
Easy to integrate into blockchain systems
With the new smart contract, parties can conclude valid contracts and transfer assets on the blockchain. «This solution combines the advantages of the de-centralised blockchain infrastructure with the security and reliability of a certified signature,» says Bärtschi. The solution can be fairly easily
integrated into existing blockchain systems such as Ethereum, Hyperledger or Corda. The technology supports signatures in accordance with Switzerland’s requirements as well as with the eIDAS regulation of the European Union. «This opens up a number of possible international applications,» says Peter Amrhyn from Swisscom.
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Prof. Dr. iur. Harald Bärtschi, Director of the Center for Corporate and Tax Law, ZHAW School of Management and Law, phone 058 934 76 60, email firstname.lastname@example.org
Prof. Dr. sc. Jörg Osterrieder, Institute of Data Analysis and Process Design, ZHAW School of Engineering, phone 058 934 45 94, email email@example.com
ZHAW Corporate Communications, phone 058 934 75 75, email firstname.lastname@example.org