The Bitcoin Blockchain – The next step in cloud based eWarranty


01 Sep The Bitcoin Blockchain – The next step in cloud based eWarranty

The Problem with Warranties:

Imagine your refrigerator malfunctions. It is relatively new (you think..), so maybe it’s still under warranty? You are not sure so you start looking for the receipt and the warranty papers around the house. Did you remember to activate the warranty by going online or sending the papers to the seller (or importer, or manufacturer)? Was the refrigerator covered for 1 or 5 years?

Or, you buy an iPhone on eBay. Can you trust the warranty that comes with it? will you be able to use it when the time comes? Maybe this iPhone already has a rich history of warranty claims?

It turns out that a surprisingly small percentage of buyers keep track of their product’s warranties or are able to activate them when the need arises.

Moreover, there is currently no easy way to track down the warranty history of an item or to transfer a warranty when an item under active warranty is sold.

Warranteer – A cloud based eWarranty platform

Warranteer provides a fully automated solution to some aspects of these problems. New product receipts are scanned, uploaded and securely stored in the cloud. Users can easily access the list of products along with their receipts and warranty expiration dates, from anywhere. Warranties are automatically activated, and various after-sale services (such as product information or contacting the seller) are provided. On top of that, users are prompted by the application if a warranty is about to expire and are provided with an easy way to extend it.

Can we do better?

While the solution currently provided by Warranteer solves much of the hassle around warranty management, several challenges remain:

  • Trust: Users of the platform need to trust that Warranteer keeps its database secure and that database entries are immutable (the warranty I uploaded today is going to be there 5 years down the line).
  • Tradability: There is no way to transfer the warranty when a product is resold.
  • Traceability: There is no effective way to track the warranty history of a product.


The next step – Blockchain Technology

The Bitcoin Blockchain is a new technological innovation that can provide the infrastructure needed to take eWarranties to the next level, by providing a way to store, track and trade eWarranties in a trustless and highly secure way.


What is “Blockchain technology”?


A blockchain is a decentralized ledger (database of transactions) powering Bitcoin-like digital currencies.

This ledger is public and duplicated across a “peer to peer network” while still maintaining a coherent state (agreed upon by all participants) without requiring trust or a central authority. The inherent redundancy of duplicating the entire ledger on every node of the network removes the single point of failure common to traditional databases.

Transaction validity is ensured cryptographically. Every so often (10 minutes on average on the Bitcoin network) incoming transactions are bundled into a new “block”. The chain of blocks (hence “blockchain”) constitutes the agreed upon state of the ledger.

Changing a historical block becomes exponentially harder the deeper it is in the chain. A given blockchain security is tied to the amount of computer power securing the network through the process of “mining” new blocks. Attempting to manipulate the state of the ledger requires harnessing enough computational resources to overwhelm the rest of the network.

A new database paradigm

In stark opposition to traditional databases, blockchains can be viewed as promoting a new paradigm for data storage, that is based upon:

  • Transparency: All the data is public, no one can manipulate the data out of sight.
  • Redundancy: Everyone holds all the data, no one owns it or can “take it offline”, no single point of failure.
  • Permissionless, global & open: Anyone and everyone can participate.
  • Immutability: Changing record history is prohibitively difficult.

The Bitcoin Blockchain

The Bitcoin blockchain, being the forerunner and most widely used cryptocurrency, is currently the most secure blockchain by far. By being the most powerful distributed network of computers on earth, any attack on the Bitcoin blockchain is impractical and formidably expensive.

On top of that, the Bitcoin ecosystem attracts most of the development effort and capital investments in this space and as such is the most market ready blockchain platform.

Blockchain applications

While originally designed as the backbone for a digital currency, it was soon realized that one can use the Bitcoin blockchain for other purposes. Due to the fact that the underlying software is open sourced, a vibrant ecosystem of entrepreneurs has emerged, all developing decentralized applications running on top of it.

For example, colored coins are a novel way of manipulating digital assets on top of the Bitcoin blockchain. The basic trick is to associate metadata with Bitcoin transactions that unambiguously represent the creation or transfer of assets, whose value is backed by a promise of the issuer to redeem them for something of value in the real world.

The colored coins protocol supports adding unlimited amounts of metadata to a digital asset. This metadata is stored in a decentralized fashion using torrents, and referenced on the Bitcoin blockchain.

Multisignature addresses and smart contracts

The Bitcoin blockchain supports more than just sending value over the internet.

One interesting ability, is a multisignature (or “multisig” for short) address which splits ownership between multiple parties (like a safe deposit box that needs more than one key to be opened). More generally, blockchains can support smart contracts. Smart contracts (or self enforcing contracts) are programs that execute a contract, without the need of an outside party to enforce them. Because the Bitcoin blockchain is decentralized and immutable, everyone can trust a smart contract that runs on it. For example, one can create a contract describing an eWarranty that can only be transferred 3 times and has an expiration date of, e.g. 5 years.

What Blockchains can do for eWarranties

Blockchain based technologies (and colored coins in particular) can solve the Trust, Tradability and Traceability challenges of the eWarranty space


Once eWarranties are recorded on the Bitcoin blockchain (for example by being issued as digital asset using colored coins) a highly secure, trustable and public record of that warranty becomes available. Vendors reluctant to trust a company to handle their warranties may be more forthcoming to use a public platform that doesn’t requires trust. Companies like Warranteer can provide a service of recording eWarranties on the blockchain that even they cannot erase or tamper with. A standardized format for warranties can naturally arise (most likely to be determined by early adopting companies like Warranteer).


The Bitcoin blockchain is first and foremost a backbone of a currency. Thus, blockchain applications natively support secure and efficient transfer of value over the internet. Digital tokens representing eWarranties can be easily and securely traded upon selling a product that is under warranty. Blockchain backed digital assets (like bitcoins) cannot be counterfeited or spent more than once.


Once warranty records are available on a public, trusted and secure database, all being approved by the warranty supplier and conforming to a standard it will be straightforward to enable instant and complete tracing of a product’s warranty history (service history, critical issues, amount of previous owners, etc..)

An example of an eWarranty on the Blockchain

Below we present an example of the type of JSON object that can represent eWarranty Metadata on the Bitcoin blockchain. Please note that this is only a broad-brush example and actual implementation details may be slightly different.

Bitcoin 2.0 Code Example

Summary and Conclusions:

The Bitcoin blockchain decentralized ledger can solve many of the open issues with eWarranty management. Using currently existing blockchain based technologies we can increase the security, enhance the traceability and provide easy tradability of eWarranties. By being an early adopter of blockchain technology for signing and securing eWarranties, Warranteer set the standard for the entire modern eWarranty industry.