Blockchains are more than just Bitcoin – they’re a whole new way of looking at cyber security, writes Vijay Michalik, research analyst for digital transformation at Frost & Sullivan
Blockchains are a nebulous concept. You’ll have heard of Bitcoin already, and may understand that a blockchain, in the technical sense, is the foundation. Blockchains don’t just encompass this breakthrough technology, but a spectrum of business models, organisational structures and radical ideas.
Bitcoin is the first truly successful blockchain application, a digital currency, and it occupies an important space within this spectrum. Its technological capabilities are matched with a carefully balanced incentive structure. It also fosters a community around its open-source development, and third-party businesses creating applications and integrations.
Blockchains are built on a history of security research
Far from being an unprecedented breakthrough, with unintended consequences, the blockchain technology stack is a culmination of decades of cryptography and security research.
The 1970s cryptography breakthrough of the Merkle tree and the distributed hash tables of the 1990s combine to create autonomy, fault tolerance and scalability for distributed systems. They’re the tools that built famous decentralised applications like BitTorrent, Napster and Freenet.
Bitcoin’s most impressive contribution is recognising the synergies between this field of distributed communications and file sharing systems, and digital currencies, which had seen many false starts prior to Bitcoin’s success since 2009.
The key was Hashcash, a system proposed in 1997 to limit and suppress email spam and denial-of-service attacks. Hashcash is an algorithm that requires the sacrifice of processing power as a security mechanism. This proof-of-work creates the incentive structure and network verification that now powers cryptocurrencies.
The final step is the addition of smart contracts to the blockchain stack, a name coined by Nick Szabo as early as 1993. Smart contracts are algorithmic; a type of self-executing code which enables more complex asset transfer and the automated exchange of rights. These are the building blocks of a complete programming language, and the more advanced blockchain applications such as those envisioned by Ethereum.
What we get is a set of security tools that are very good at coordination between mutually unknown actors and secure data or value transfer. We think of blockchains as having four key characteristics to this end: they’re cryptography-based, distributed, peer to peer, and, in many cases, open source.
Innovative blockchain applications in security
As with many open source movements, we’re seeing the different stages of the blockchain ecosystem build out in waves: first the core protocols (Bitcoin, Ethereum and other platforms); now middleware, from Consensys; and then applications.
There’s been some degree of consolidation on blockchain development around Bitcoin and Ethereum over the past year, although Ethereum isn’t the second biggest token by market capitalisation.
Bitcoin’s first mover-advantage and financial specialisation has granted it momentum and early market interest, while Ethereum’s Turing-complete programming capabilities enable many other truly disruptive opportunities.
Guardtime’s security solution runs on a private blockchain, and features a cross-vertical solution replacing RSA digital signatures: its KSI (Keyless Signature Infrastructure), which uses only hash-function cryptography for signing. This prepares digital identity systems for the security necessities of the future – where quantum computers make factorisation problems like those that RSA relies on trivial.
Inter Planetary File System (IPFS) is a new core internet protocol that is designed to supplant the Hypertext Transfer Protocol (HTTP). IPFS can address some of the most difficult security challenges that the HTTP-based internet faces: centralised hosting and distribution, and weak application of content-signing protection.
Using context-driven storage, self-certification and an incentivised blockchain mechanism, IPFS becomes a secure, permanent web, resilient against server failure.
MIT’s Enigma, based on the Bitcoin blockchain, enables any code to be run on encrypted data. In its model, data can be stored, shared and analysed without being fully revealed to a single third party, enabling trustless sharing of data and distributed computation without resorting to full transparency. This grants blockchains, even in a permissionless setup, access to the full spectrum of data visibility from fully private to public.
The Latest on: Blockchains
via Google News
The Latest on: Blockchains
- Bloomberg Editor: BTC ‘Is for Making Transactions The Man is Against’on October 18, 2019 at 10:48 am
Joe Weisenthal, editor of news for Bloomberg Digital, said that blockchains are essentially inefficient and that “Bitcoin is for making transactions The Man is against.” The comments come from ...
- Bitcoin’s Irreversibility Challenges International Private Law: Legal Scholaron October 18, 2019 at 10:38 am
Professor Matthias Lehmann has proposed an approach for applying private international law to Bitcoin and other blockchains A German law professor has argued that permissionless networks such as ...
- Here’s How Much Bitcoin Is Currently Locked Up in Sidechainson October 17, 2019 at 1:28 am
Sidechains are separate blockchains tied to a cryptocurrency’s regular blockchain, i.e. mainchain. Users can interact with it via a pegging mechanism; they send funds to and from the sidechain, with ...
- Transylvania Crypto Conference 2019: The Transition to Bitcoin-Onlyon October 16, 2019 at 6:26 pm
For instance, Tom Trevethan’s presentation, titled “In Defense of Blockchains,” turned out to be an advocation for Bitcoin sidechains, while Felix Crișan (CEO of payments processor Netopia) cited ...
- Bermuda allows tax payments in USDC, commissions blockchain-based national ID systemon October 16, 2019 at 5:18 pm
If Bermuda Premier David Burt has his way, the country's residents will soon be paying taxes with cryptocurrency and using blockchains to exchange personal data. Bermuda today unveiled agreements with ...
- Blockchain is promising but it can't save the worldon October 16, 2019 at 11:15 am
Pascal Gauthier: That it can save the world, and that you can use blockchain for everything. I think this is actually probably the biggest myth. I think blockchains are good for some things, not for ...
- Five hurdles blockchain faces to revolutionise bankingon October 16, 2019 at 6:00 am
There are many versions of public blockchains in existence, but the majority of them share a basic premise: they offer a secure, decentralised infrastructure to maintain a “single version of the ...
- HighCastle partners with Archax to bring liquidity to digital securitieson October 16, 2019 at 4:05 am
Unlike public blockchains, such as Ethereum, PrimeNet is a secure permissioned distributed ledger built in accordance with the capital markets industry’s standards and accessible for issuance and ...
- Fernley will be 'epicenter' of future development in Northern Nevada, Gilman sayson October 15, 2019 at 4:04 pm
Technology titans such as Blockchains, Google and Switch -- plus large manufacturers such as Tesla -- have located there, bringing jobs, population growth and new money to Northern Nevada. Yet with ...
- SimplyVital Health receives grant to study integrating blockchainson October 14, 2019 at 9:21 am
Brighton, Mass.-based SimplyVital Health has earned a $225,000 grant from the National Science Foundation's Small Business Technology Transfer to research blockchain protocols. With the funding, ...
via Bing News