Keeping accurate time on a network is more than just a technical issue—it is also a legal one. That’s because time is used as a basis for making contracts. In the real world, people receive receipts, sign agreements, and audit performance. These documents, signatures, and transactions all include time references that make them legally binding. Recently, both the United States and the European Union have passed laws making digitally signed documents legal. As contracts executed in cyberspace become more commonplace, parties to an online agreement or transaction will increasingly be called upon to prove that what was alleged to have occurred actually did occur, and when. Nowhere is that more true than the brokerage business. Take the National Association of Security Dealers (NASD), a network consisting of 5,500 members and 82,000 branch offices. NASD requires its members to time stamp each stock trade to within an accuracy of three seconds. Furthermore, members must be able to prove that the time in the time stamps came from a recognized time source, specifically the National Institute of Standards and Technology (NIST). For transactions to be legal, their time stamps must be accurate, and the accuracy must be proven. In digital commerce, merely synchronizing your own network clocks won’t be good enough; they must also be synchronized with an external Coordinated Universal Time (UTC) source.
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