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How is this better than hashing a txt document with a claim which has a timestamp in it?

shasum -a 512 filewithtimestamp.txt

It's verifiable. Your approach is just "trust me bro".

echo I totally made this file five years ago > filewithtimestamp.txt

This approach uses LE as a trusted third party. The date on the cert is valid if you trust letsencrypt.

You can hash the text document, upload the hash to some trusted third party, e.g. if archive.org indexes your website.