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
- Circle CEO Says Public Blockchains With Financial Applications Are Just Emergingon July 5, 2019 at 2:33 pm
Jul.05 -- Jeremy Allaire, Circle chief executive officer, discusses Facebook's Inc's plan to start a new cryptocurrency and the landscape for digital coins with Bloomberg's Joe Weisenthal and ... […]
- Facebook fights back against Libra criticismon July 5, 2019 at 3:39 am
On decentralisation — we totally get the point — fungibility of nodes to ensure they can always be replaced over time is a fundamental principle of blockchains, and that’s why we’re ... […]
- Blockchains.com Founder Buys Community Bank to Finance Crypto Dreamson July 2, 2019 at 5:07 pm
Jeffrey Berns, eccentric founder of blockchain incubation and investment firm Blockchains.com, purchased a small community bank in Las Vegas, Nevada in order to secure financing as he manifests his ... […]
- Blockchains CEO buys Las Vegas bank for $28Mon July 2, 2019 at 1:34 pm
The investor behind a proposed “smart city” in Northern Nevada has bought a small Las Vegas bank. Blockchains LLC founder Jeff Berns acquired Kirkwood Bank of Nevada for $25 million and agreed to ... […]
- Blockchains CEO Jeffrey Berns buys Kirkwood Bank of Nevadaon July 2, 2019 at 9:00 am
Jeffrey Berns, the CEO of Blockchains, LLC is purchasing Kirkwood Bank of Nevada. The news was reported in a Monday joint press release from JBNV Holding Corp., and Kirkwood Bancorporation of Nevada, ... […]
- Blockchains CEO Acquires Kirkwood Bank of Nevada for $28 millionon July 1, 2019 at 3:41 pm
The CEO of Blockchains LLC bought a bank in Nevada, citing financial inclusion, running a regulatory sandbox and issuing blockchain-based banking tools as motivations. Blockchains CEO bought a ... […]
- Huobi Unveils ‘Finance Chain’ For Building Enterprise Blockchainson July 1, 2019 at 7:08 am
Huobi Group partnered with Chinese blockchain startup Nervos to enable firms to deploy their own blockchains. Huobi develops a public blockchain to enable companies to deploy their own blockchains ... […]
- Let’s Be Clear: Blockchains Needs Interoperability To Become Widely Adopted At Laston June 27, 2019 at 10:05 am
Face it: blockchain isn’t that new, mysterious thing it used to be anymore — at this point, some companies even deliberately try to use alternative terms like DLT because they think that the ... […]
- New Research Targets a Big Worry for Some Blockchains: Double-Spent Transactionson June 18, 2019 at 10:30 am
A trio of researchers say they’ve discovered a way to detect and punish dishonest blockchain participants, according to a paper published at the end of May. “The (virtual) gold rush is on, and as in ... […]
- World’s First E-Money License for Blockchains Issued to Moneriumon June 15, 2019 at 1:37 am
REYKJAVIK, Iceland--(BUSINESS WIRE)--Monerium ehf. has received a license from the Financial Supervisory Authority of Iceland to issue e-money on blockchains through its subsidiary, Monerium EMI ehf. ... […]
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