This interview is part of our new Blockchain In The Legal Industry series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and the legal industry.
In this interview we speak with Ignacio Bermeo, CEO and Founder TRATO, to understand how his company is using blockchain and what the future of the industry holds.
1. What’s the story behind TRATO? Why and how did you begin?
IB: I am a lawyer / programmer / entrepreneur that envisioned a secure and hassle-free environment with contracts due to the current state of business with technology: the way of closing a business have evolved in so many ways, but the legal support of that business was left behind with lawyers still using old ways of delivering and handling contracts. As a practicing corporate lawyer, I witnessed how companies lost opportunities and litigations due to lack of documentation and information they could have easily obtained on each contract when they initiated the commercial relationship. Using my self-acquired computer programming and as part of the 2014 generation of the Founder Institute (a program of Silicon Valley), I proposed myself to solve this issue by programming a solution. Since the idea, TRATO received an investment to start working on a mobile prototype and finally, a working version was released on the year 2017 that was easily adopted by big banks and corporations including BBVA, SAMSUNG, Rappi, Cabify among many others.
2. Please describe your use case and how TRATO uses blockchain:
IB: Now that most new deals are made electronically, there is a high risk on identifying the original contract vs the last version signed on a digital platform, increasing the possibility of documentation being tampered. Tampered documents can cause irreparable damage to governments and businesses. It can be impossible to determine how the document has been tampered, opening up the whole system for large losses due to fraud. Mitigating document fraud and document tampering should be a top priority for any business system. We created a framework which can be used to keep track of all document activity and changes, while at the same time allowing verification across a distributed system. This eliminates document fraud and document tampering by providing an easy way to perform document verification among all users of the framework. The framework is based on cryptographic hashes and blockchain for persistence. Each hash is mapped to a physical document stored inside a document repository. If a document's hash isn't present on the framework's blockchain, it has been tampered and can be disregarded. Our framework provides a starting point for enterprise document verification based on known blockchain principles and best cryptographic practices.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
IB: One of our clients handles a lot of negotiations with the contracts they sign with their suppliers. Most in-house lawyers are used to using non-specialized text processors to observe the changes made on those documents by anyone involved in the negotiations. Versions got lost on emails and that would delay the delivery and execution of each contract. With TRATO, by modifying documents already tracked by the blockchain, allowed them to confidently make amends to them. Amending documents is more space efficient since TRATO tracks only the changes on the document, not the whole new document. When modifying, TRATO uses the blockchain to track the hash value of the patch which is applied to the document. A patch represents a set of changes needed to evolve a document from one state to another.
4. What other blockchain use cases in the legal industry are you excited about?
IB: A distributed ledger helps companies comply to their original agreement. Most contracts are vulnerable for the ambiguity they entail and handling them in a traditional way only helps to keep this ambiguity present each time a problem arises. I am excited that this type of technology will help avoid many of the problems that are created as a consequence of misinterpretation as technology will provide the exact information that was created and delivered in some point of time. Besides, by all parties sharing the same information, there will be no way that this information will be altered. Once we can control this information, it will become easier for contract to auto execute, but not before that, since parties need to first be confident that everything was duly revised and approved.
5. Where will TRATO be in 5 years?
IB: TRATO will be the trusted Contract Blockchain where 1/3 companies will deliver and execute their contracts. Companies want to avoid a poor judgement in any part of the business since that would represent losses and inefficiencies. By adding all the activity related to a contract in a place that is naturally immutable and inalterable, they are sharing an act of trust to all and each of their clients or suppliers. TRATO is currently growing internationally by first analyzing each market and regulation regarding blockchain. In 5 years, TRATO will be present on 60% of the countries worldwide receiving the trust of the most innovative companies of the world.