Summary: Turning business documents into non-fungible tokens can reduce costs by providing document verification, permanent on-chain storage, and integration with other systems.
One of the most costly problems in business is managing contracts and other important documents, which account for nearly 10% in lost revenue.
Document management is important because companies need to know which version of a contract, invoice, and other documents are final or verified. Companies also need to know whether a document was approved or is the original version for compliance and payment purposes.
However, it is often difficult to locate and verify documents and share document data with the right parties. These difficulties lead to delays in delivery and payments, and prevent automation.
NFTs for Documents
Many of the problems of document management can be solved by assigning documents unique digital identifiers and permanently storing the document and its data on a globally accessible network. This can be done by creating a non-fungible token (NFT) from a PDF and storing the PDF on blockchain.
Minting an NFT from a document assigns a unique token ID to the PDF. Storing a PDF file on blockchain provides storage that does not rely on any single company or service to maintain. Likewise, storing the text and data from a document as NFT metadata enables the document to integrate with existing platforms and software.
Fig. 1 Minting and storing documents on blockchain.
Benefits of Document NFTs
A primary benefit of document NFTs is that the unique token ID can be used to easily confirm that the document is approved or verified. This is because a company can show that they control or approve of the unique token ID assigned to the document. The token ID serves as a digital certificate of authenticity or a signature that only authorized parties can provide. For example, here is an NFT of a Letter of Credit between Baker Hughes and JP Morgan.
As a result, delays and confusions about which documents to use for governance and meeting contract obligations can be eliminated.
Another benefit of document NFTs stored on chain is that they provide a permanent repository for PDF files. This not only eliminates the risk of document deletion but also the need to change where documents are stored. There is never a need to update systems on the basis that documents have moved locations.
The text and data of document NFTs can also be stored on chain in any format. This enables document NFTs to integrate with contract management software, document collaboration platforms, infrastructure providers such as SWIFT, and initiatives to standardize trade documents such as those being led by the International Chamber of Commerce.
Minting business documents as NFTs and securely storing them on blockchain is now available using ICME. Because ICME enables users to mint and store NFTs on the path-breaking Internet Computer blockchain, there are no gas fees and on chain storage is cheap (about $5 per gigabyte).