Category: blockchain

15 Sep 2019
You Can Now Prove a Whole Blockchain With One Math Problem – Really

You Can Now Prove a Whole Blockchain With One Math Problem – Really

The Electric Coin Company (ECC) says it discovered a new way to scale blockchains with “recursive proof composition,” a proof to verify the entirety of a blockchain in one function. For the ECC and zcash, the new project, Halo, may hold the key to privacy at scale.

A privacy coin based on zero-knowledge proofs, referred to as zk-SNARKs, zcash’s current underlying protocol relies on “trusted setups.” These mathematical parameters were used twice in zcash’s short history: upon its launch in 2016 and first large protocol change, Sapling, in 2018.

Zcash masks transations through zk-SNARKs but the creation of initial parameters remains an issue. By not destroying a transaction’s mathematical foundation – the trusted setup – the holder can produce forged zcash.

Moreover, the elaborate ‘ceremonies‘ the zcash community undergoes to create the trusted setups are expensive and a weak point for the entire system. The reliance on trusted setups with zk-SNARKs was well known even before zcash’s debut in 2016. While other research failed to close the gap, recursive proofs make trusted setups a thing of the past, the ECC claims.

Bowe’s Halo
Speaking with CoinDesk, ECC engineer and Halo inventor Sean Bowe said recursive proof composition is the result of years of labor – by him and others – and months of personal frustration. In fact, he almost gave up three separate times.

Bowe began working for the ECC after his interest in zk-SNARKs was noticed by ECC CEO and zcash co-founder Zooko Wilcox in 2015. After helping launch zcash and its first significant protocol change with Sapling, Bowe moved to full-time research with the company.

Before Halo, Bowe worked on a different zk-SNARK variant, Sonic, requiring only one trusted setup.

For most cypherpunks, that’s one too many.

“People we are also starting to think as far back as 2008, we should be able to have proofs that can verify other proofs, what we call recursive proof composition. This happened in 2014,” Bowe told CoinDesk.

Proofs, proofs and more proofs
In essence, Bowe and Co. discovered a new method of proving the validity of transactions, while masked, by compressing computational data to the bare minimum. As the ECC paper puts it, “proofs that are capable of verifying other instances of themselves.”

Blockchain transaction such as bitcoin and zcash are based on elliptic curves with points on the curve serving as the basis for the public and private keys. The public address can be thought of the curve: we know what the elliptic curve looks like in general. What we do not know is where the private addresses are which reside on the curve.

It is the function of zk-SNARKs to communicate about private addresses and transactions–if an address exists and where it exists on the curve–anonymously.

Bowe’s work is similar to bulletproofs, another zk-SNARK that requires no trusted setup. “What you should think of when you think of Halo is like recursive bulletproofs,” Bowe said.

From a technical standpoint, bulletproofs rely on the “inner product argument,” which relays certain information about the curves to one another. Unfortunately, the argument is both very expensive and time consuming compared to your typical zk-SNARK verification.

By proving multiple zk-SNARKs with one–a task thought impossible until Bowe’s research–computational energy is pruned to a fraction of the cost.

“People have been thinking of bulletproofs on top of bulletproofs. The problem the bulletproof verifier is extremely expensive because of the inner product argument,” Bowe said. “I don’t use bulletproofs exactly, I use a previous idea bulletproofs are built on.”

In fact, Bowe said recursive proofs mean you can prove the entirety of the bitcoin blockchain in less space than a bitcoin blockhead takes – 80-bytes of data.

The future of zcash
Writing on Twitter, Wilcox said his company is currently studying the Halo implementation as a Layer 1 solution on zcash.

Layer 1 solutions are implementations into the codebase constituting a blockchain. Most scaling solutions, like bitcoin’s Lightning Network, are Layer 2 solutions built on top of a blockchain’s state. The ECC’s interest in turning Halo into a Layer 1 solution speaks to the originality of the discovery as it will reside next to code copied from bitcoin’s creator himself, Satoshi Nakamoto.

ECC is exploring the use of Halo for Zcash to both eliminate trusted setup and to scale Zcash at Layer 1 using nested proof composition.

— zooko (@zooko) September 10, 2019

Since the early days of privacy coins, scaling has been a contentious issue: with so much data needed to mask transactions, how do you grow a global network?

Bowe and the ECC claim recursive proofs solve this dilemma: with only one proof needed to verify an entire blockchain, data concerns could be a thing of the past:

“Privacy and scalability are two different concepts, but they come together nicely here. About 5 years ago, academics were working on recursive snarks, a proof that could verify itself or another proof [and even] verify multiple proofs. So, what [recursive proof composition] means is you only need one proof to verify an entire blockchain.”

To be sure, this isn’t sophomore-level algebra: Bowe told CoinDesk the proof alone took close to nine months of glueing various pieces together.

A new way to node
A further implication of recursive proofs is the amount of data stored on the blockchain. Since the entire ledger can be verified in one function, onboarding new nodes will be easier than ever, Bowe said.

“You’re going to see blockchains that have much higher capacity because you don’t have to communicate the entire history in one. The state chain still needs to be seen. But if you want to entire the network you don’t need to download the entire blockchain.”

While state chains still need to be monitored for basic transaction verification, syncing the entire history of a blockchain–over 400 GB and 200 GB for ethereum and bitcoin respectively–becomes a redundancy.

For zcash, Halo means easier hard forks. Without trusted setups, ECC research claims, “proofs of state changes need only reference the latest proof, allowing old history to be discarded forever.”

When asked where his discovery ranks with other advancements, Bowe spoke on its practicality:

“Where does this stand in the grand scheme of things in cryptocurrency? It’s a cryptographic tool to compress computation… and scale protocols.”

Source: https://www.coindesk.com/you-can-now-prove-a-whole-blockchain-with-one-math-problem-really

12 Sep 2019
3 Blockchain Improvements That Will Lead to Its Mainstream Adoption

3 Blockchain Improvements That Will Lead to Its Mainstream Adoption

Amazon, Walmart, Facebook, IBM: These are among the household names using blockchain to change business. In fact, according to a recent Deloitte survey, more than half of companies say blockchain is a critical priority for their organization. And 83 percent say there’s a compelling business case for the innovation.

Distributed ledger technology (DLT) has arrived, but the question is whether it’s scalable to match the marketplace’s high expectations. Consumers want real-time transactions while having assurance of security from validating nodes. Businesses also want high throughput for their global operations, with zero downtime. But it doesn’t always work that way, especially with new tech. There are glitches, bugs and design flaws. Moreover, regulators often force organizations (or networks) to change how they operate.

Here are three critical features that a blockchain network must have to achieve wide adoption.

Speed
Fast speed is essential to help enterprises in practical, day-to-day use. MetaHash is a network based on blockchain 4.0 technology that’s applicable to a wide variety of industries. Aiming to supplant traditional infrastructure, it’s one of the fastest such networks in the world.

In the past, even the largest networks ground to a halt when they saw spikes in traffic. Slow speed leads to frustrations and some users returning to traditional solutions. When there’s a ton of traffic, it’s not uncommon for Bitcoin settlements to take longer than 30 minutes. Two years ago, the CryptoKitties game went viral and clogged the Ethereum network, where MetaHash processes 50,000 transactions per second and validates settlements in three seconds or less.

Sustainability
To an extent, blockchain is already seeing large-scale adoption from global enterprises. Walmart uses it to track food from farm-to-plate to ensure safe products. Facebook is rolling out Libra, a digital token, and pharmaceutical giant Merck is creating a pilot program to fight counterfeit drugs. But at this stage, those DLT initiatives are still new and experimental.

What happens when immutably stored data accumulates to huge files? Can a network sustain its performance when a ton of viewers (business partners, regulators and other stakeholders) join? In the future, experts think some DLT systems will see performance issues from what’s called “blockchain bloat.” It occurs when trillions (or more) of blocks are permanently stored on-chain, causing wallets to take weeks to download and causing a system to become less reliable.

Sharding is a proposed solution, but many systems, including Ethereum, have been unsuccessful at implementing it. It partitions databases so that individual “shards” store different chunks of data. As blockchain matures, sharding will become more critical as the amount of permanently stored data increases to gargantuan sizes.

Combining DLT with other innovations, such as artificial intelligence (AI), will also help to bring mainstream adoption. AI-assisted tech is being embedded in mobile, smart home devices, vehicles and wearables, and blockchain can be used to store all the captured data. One example is DeepCloud AI, which is using both blockchain and AI to decentralize cloud computing (DCC). The DCC platform enables businesses and individuals to monetize idle storage and computing capacity. AI can match nearby computing resources with real-time customer demand. This approach improves speed, reduces cost and prevents clogged networks.

Privacy
Last but not least is privacy. Data security has received national attention due to breaches at Equifax, Yahoo! and Marriott, as well as congressional hearings on Facebook and Google selling personal data of millions of users. Blockchain’s selling points include privacy, data security and an anonymity network. This is all fairly compelling given strong user preference for privacy, as well as governmental inability to hold big tech accountable for selling everyone’s data.

To gain mainstream adoption, networks must feature significantly favorable economics. Financial institutions have invested a fortune in their infrastructure. Blockchains can make a compelling case that makes consumers want to switch by making transactions extremely inexpensive and fast in comparison. Cost efficiency, data security, smart contracts, frictionless cross border settlements — these are very real advantages. Due to growing adoption and scale of use, blockchain ventures must solve scalability issues to eventually achieve mainstream adoption.

 

Source: https://www.entrepreneur.com/article/338715

27 Aug 2019
Why blockchain, despite some early success, remains a corporate enigma

Why blockchain, despite some early success, remains a corporate enigma

While the benefits of blockchain seem straight forward, the nuances around implementing it – including adding business partners to a network, integrating it with legacy systems and navigating uncertain regulatory waters – make its future uncertain.

While blockchain is moving beyond pilot projects and proofs of concept testing in some industries, companies still struggle to justify development spending and continue to have concerns around security, interoperability, bandwidth and regulatory uncertainly.

Earlier this month, research firm IDC published its semi-annual blockchain spending guide; it showed blockchain spending this year is forecast to be $2.7 billion, up 80% over 2018.

By 2023, spending on blockchain hardware, software and services is expected to reach $15.9 billion, according to IDC. Adoption of blockchain for financial services, identity, trade, and other markets “is encouraging,” IDC stated.

Global blockchain spending will be led by the banking industry, which will account for roughly 30% of the worldwide total in IDC’s five-year forecast, which runs from 2018 through 2023. Discrete manufacturing and process manufacturing will be the next largest industries, with a combined share of more than 20% of overall spending.

Process manufacturing will also see the fastest rate of spending growth (68.8% combined annual growth rate), making it the second-largest industry for blockchain spending by the end of the 2023. (Overall, IDC expects blockchain spending to grow at a combined annual growth rate of 60.2% through 2023.)

In a recent survey of enterprise executives by IDC, the results of which have yet to be published, 62% of respondents indicated they’re considering blockchain in the long run, are currently deploying it in production or evaluating it, according to IDC Research Director James Wester. That number is up slightly from last year when 55% indicated they were involved with blockchain projects, or 2017 when 51% said they were deploying or considering it.

Blockchain, Wester said, has reached a “tipping point” across multiple use cases, such as cross-border payments and settlement and supply chain management and tracking, and many companies in those areans are quickly moving from pilots into production.

 

Read more: https://www.computerworld.com/article/3434067/despite-growth-in-some-industries-blockchains-future-remains-cloudy.html

25 Aug 2019
The Real Benefits of Blockchain Are Here. They’re Being Ignored

The Real Benefits of Blockchain Are Here. They’re Being Ignored

Introducing as many people as possible to the benefits of decentralization is a cause almost everyone in this industry shares. The issue is that, in making the technology more accessible, many developers are sacrificing the benefits of decentralization for the sake of convenience.

A decentralized product should keep three key promises to its customers:

Censorship-resistant: your stuff is safe and can’t be tampered with
Self-sovereign: you own and control your assets, identity, and data
Open ecosystems: everyone gets value from new contributions
Dapper Labs has a few horses in this race: we started with CryptoKitties, still the most popular blockchain game by transaction volume, and recently announced NBA Top Shot, a new blockchain-based ecosystem being developed in partnership with the NBA and NBPA. We also shipped Dapper, one of the first ‘smart wallets’ for ethereum.

The value of censorship resistance and customers owning their own data is relatively well understood. Less attention is being paid to the other big benefit of crypto that centralized approaches compromise: open ecosystems.

Open ecosystems are the cornerstone
Open ecosystems enable anyone to contribute to a platform or someone else’s work on the platform and receive rewards for their work. On ethereum, we’re seeing open ecosystems appear in the realm of decentralized finance (DeFi).

MakerDAO’s DAI, an algorithmic stablecoin, is used by dapps like Dharma, Compound Finance, and many others. These decentralized lending applications provide competitive rates using Dai to attract borrowers while enabling lenders to earn from assets they already own.

Compound Finance and Uniswap make MakerDAO stronger when combined together as opposed to existing individually. These open ecosystems are even multi-layered, using smart contracts from multiple primitives to create infinite possibilities. For example, Opyn is a non-custodial trading platform built on top of Ethereum, Compound, Uniswap, and MakerDAO’s DAI.

Without Compound or Uniswap, Opyn wouldn’t be able to exist.

“The combination of Primitives will enable the creation of protocols and systems that weren’t possible prior to their existence. These emergent systems will be greater than any of the individual primitives on their own.” — The Emergence of Cryptoeconomic Primitives by Jacob Horne

Turning creators, users and developers into stakeholders
In an open ecosystem, users, developers, and the original creators can all capture value.

Users get more choice (because anyone can add features on anything), and users ultimately decide what’s important. The speed of software innovation increases because developers can use each others’ code like lego blocks.

Developers who build on existing code are, in many ways, marketing the original creator’s product for them, further increasing the reach of the brand. In return, developers tap into an existing and qualified user base.

As a result, trust is built through a cyclical relationship between all participating parties.

“I feel like we’re in a unique position where the users of the platform have an incentive to work hard to see the platform succeed, and if given the opportunity, we would move mountains.”

– kabciane, a KittyVerse developer creating numerous utility contracts

In the context of MakerDAO’s DAI, every developer using DAI in their dapp is preaching what MakerDAO has done for the decentralized finance ecosystem.

Why aren’t there more blockchain games?
Open ecosystems have significant long-term benefits, but as CoinDesk’s Brady Dale recently pointed out, they’re difficult to create in games. By using sidechains or centralizing the data that matters most to third-party creators, dapp developers are inhibiting potential open ecosystems tied to their experiences.

Developers are building full-stack games, with most of the data existing off-chain, resulting in less composability, less shared data, and effectively closed ecosystems.

One of the major design decisions for CryptoKitties was to compute and store the genes on the ethereum blockchain. It would have been far easier not to do so, and the resulting experience would have been more accessible — but many of the things that make CryptoKitties interesting or valuable to this day would not have been possible.

Developers need access to these genes to make third-party games like KotoWars and Mythereum, both of which create more utility and value for specific genes (i.e. certain cats are more valuable because these experiences exist).

If CryptoKitties had decided to reduce the decentralized value of the game for the sake of accessibility, The KittyVerse wouldn’t exist, the game wouldn’t be as trustworthy, and the tokens wouldn’t have nearly as much value or utility to players as a result.

Open ecosystems are important outside of DeFi
Cheeze Wizards, Dapper Labs’ newest game, attempts to leverage as many lessons as possible from CryptoKitties.

It’s specifically designed as an open ecosystem: third-party developers can utilize the Cheeze Wizards API and art assets before the game launches its first official tournament later this summer. Cheeze Wizards is further encouraging developers to play in the open ecosystem via a month-long hackathon, with $15,000 in cash prizes and a whole host of other rewards as incentives.

Cheeze Wizards itself is composed of “tournaments” hosted by either Dapper Labs or third-party developers. The contract and logic for these tournaments are entirely on-chain, which means any developer can create their own tournament and take a percentage from the amount raised.

The tournament contract is a built-in business model for developers to build on top of existing IP, something that has never been possible before with second-layer experiences.

Acknowledging the reality that ethereum doesn’t scale today, CheezeWizards is really by and for the crypto community.

Blockchains and dapps can be designed so developers can earn their fair share in contributing to an ecosystem. Rewarding developers for maintaining or improving a network is the hidden treasure that’s yearning to be discovered by open ecosystems.

Read more: https://www.coindesk.com/the-real-benefits-of-blockchain-are-here-theyre-being-ignored

22 Aug 2019
Unlocking the future of blockchain innovation with privacy-preserving technologies

Unlocking the future of blockchain innovation with privacy-preserving technologies

The origins of blockchain as many are familiar with it today can be traced back to the Bitcoin whitepaper, first published in 2008 by Satoshi Nakamoto, which offered a vision of a new financial system underscored by cryptography and trust in code.

Throughout the past decade, iterations of this technological infrastructure have gradually built out a diverse industry ecosystem, allowing for use cases that extend beyond cryptocurrencies and peer-to-peer transactions. From smart contracts to asset tokenization, across industries ranging from gaming, supply chain, Internet of Things (IoT), real estate, and many others, the proliferation of use cases across verticals are a testament to the technology’s inherent versatility.

Yet, while projects remain fixated on addressing calls for mainstream adoption and enterprise implementation, existing infrastructural flaws continue to hinder these efforts. Beyond the criticisms directed at today’s open source, decentralized, public blockchains pertaining to scalability, there’s also the matter of privacy.

In most public chains today, transactions and on-chain data exchanges are fully visible to all nodes in the whole network, allowing for greater auditability and transparency. Across industries where the sharing of sensitive data is crucial, this transparency comes at a cost, posing a critical risk that far outweighs the benefits.

The tipping point of transparency
Amid the throes of digitalization, the importance of data protection schemes cannot be overstated. Throughout the years, the rise of data as a bonafide asset has led to its prominence as a key driver of economic growth across a myriad of sectors.

Historically, whether internally or to external third-parties, data has been shared across centralized networks, leaving systems vulnerable to devastating breaches and security risks. To mitigate concerns pertaining to misuse, legislators have looked to stringent regulations and privacy compliance frameworks. Though regulations are a starting point, they certainly fail to address fundamental infrastructural weaknesses.

In turn, blockchain provides an alternative, with decentralization as an added security measure that eradicates that threat of a single point of failure across a distributed network.

Simultaneously, the immutability of these permission-less networks preserves the provenance of data shared on the network, mitigating risks of tampering. As companies, big and small, transition to blockchain in the hopes of benefiting from efficient data sharing and ease in information transfer, the question of privacy in blockchains is often overlooked, forgotten amid demands for greater transparency and accountability.

To address this, many projects are now looking to employ privacy-preserving mechanisms on their infrastructures, ranging from non-interactive zero-knowledge proofs (zk–SNARKS) to encryption algorithms such as secure Multi-Party Computation (MPC). In aggregate, these technologies encrypt data as it’s shared and only reveal the specific elements that are pertinent to a specific purpose.

A collective force
Data can be perceived as a historical record of behaviors – human, mechanical, or otherwise. From the personal details we voluntarily input into forms, to driving patterns transmitted from ride-sharing vehicles to train driverless cars, or the GPS coordinates transmitted from our phones to servers, millions of data points are transmitted every day, each producing an ongoing trail of activity. In the age of automation, these granular details play a critical role in optimizing mechanized processes such as those in machine learning, strategic decision making, and identifying valuable behavioral patterns.

In healthcare, for example, optimization is a key benefit derived from data collaboration. One can see this in the training of artificial intelligence systems in order to make more precise diagnoses or the treatment of rare diseases with trained algorithms. In these cases, large quantities of sensitive data such as electronic medical records provide valuable insights for research.

Take a scenario where a hospital does not have sufficient data to perform sophisticated healthcare research using machine learning – a hospital would have the ability to access a larger pool of data if they could access it from other healthcare providers. With privacy-preserving encryption algorithms, the aggregation of patient information from several hospitals can be used to make a “collective” calculation without revealing the inputs from any hospital or the raw patient data.

This means that the information needed to conduct medical research is made available, and may be processed algorithmically to produce a result, without revealing it to anyone. With blockchain, this computational output could be transmitted over the network and users could access this with the necessary assurance that it has not been tampered with.

On the other hand, risk mitigation and fraud prevention is a prime benefit for the financial services sector, where industry-specific data privacy requirements often hinder the benefits of seamless data sharing. A potential use case would be in credit-rating investigations where there exists no current global standard for which institutions are responsible, ranging from third-party agencies to central banks. However, these institutions have a fragmented financial data profile of a given individual and often require additional information from other banks, leading to a lengthy, drawn-out process.

With a decentralized, blockchain platform equipped with privacy-preserving mechanisms, raw data can be securely encrypted by mathematically-provable cryptographic algorithms that are sent for cross-checking and computation – only the outcome of that computation would be shared and seen on the network, allowing banks to freely exchange only the relevant data required. These mechanisms help to encourage data collaboration across banks and other financial institutions efficiently and securely, without fear of unpredictable human factors that could potentially impact how the data is used.

The next chapter
With an increased emphasis on connectivity to allow for real-time optimization, risk mitigation, and personalization, data collaboration now serves as the backbone of today’s digital economy. While the advent of blockchain has largely improved the way in which information systems are able to share and transfer data, privacy concerns continue to stand in the way of maximizing the full potential of data exchanges. As incidents of misuse continue to shape public discourse and consumer confidence, a growing sentiment of distrust will only continue to fester unless critical changes are made on an infrastructural level.

The introduction of privacy-preserving mechanisms will ultimately result in benefits for businesses and users alike. Cost-efficiencies are gained as everyday processes are advanced and optimized, leading to a better understanding of consumer needs. Simultaneously, the reinvigoration of trust and value in the consumer-corporate relationship will come to underscore a greater emphasis on data ownership and sovereignty.

As we look to a future where data and privacy go hand in hand, we’ll come to see a modern data marketplace underscored by equitability and trust that has the potential to unlock new possibilities that enhance multiple areas of our everyday lives.

Source: https://www.helpnetsecurity.com/2019/08/22/blockchain-privacy/

30 Jul 2019
How Blockchain Will Change Construction

How Blockchain Will Change Construction

Blockchain technology is among the most disruptive forces of the past decade. Blockchain’s power to record, enable, and secure huge numbers and varieties of transactions raises an intriguing question: can the same distributed ledger technology that powers bitcoin also enable better execution of strategic projects in a conservative sector like construction, involving large teams of contractors and subcontractors and an abundance of building codes, safety regulations, and standards?

“Increasingly, we are thinking more carefully about when and where we need to compete and what can we share and collaborate on,” said David Bowcott, global director of growth, innovation, and insight in Aon’s global construction and infrastructure group. Using blockchain to automate the contractual processes and paperwork underpinning these complex projects could save money, free-up valuable resources, and speed up project delivery. (Unless otherwise noted, quotes are from interviews we conducted as part of our research.)

Blockchain-enabled real-estate development projects

In commercial real estate, Amsterdam-based HerenBouw is applying blockchain to a large-scale development project in Amsterdam harbor. According to Propulsion Consulting founder Marc Minnee, HerenBouw’s objective was to set up a blockchain-enabled project management system to make the building development lifecycle more efficient. Minnee’s blockchain application for HerenBouw focused on registering transactions at legally binding moments, where accuracy and an audit trail are essential. “Blockchain provides a platform for clearly cascading work products down the chain and holding everyone accountable for completing key tasks,” Minnee said.

The system’s benefits include timely information, unambiguous communication, and fewer mistakes. “Stakeholders have a clear and evenly distributed incentive to register these facts on-chain: either you won’t get what you ordered or you won’t get paid,” said Minnee. They also develop trust, which reduces friction in their mutual business processes. “Stakeholders spend more time discussing creative design and building method options.”

Blockchain pilots in construction achieve liftoff

Aon, global risk advisor to the construction industry, estimates that 95 percent of building construction data currently gets lost on handover to the first owner. Briq, a California-based blockchain firm, is demonstrating the potential to capture and secure a construction project’s documentation in a blockchain ledger that parties can navigate and give to the owner as a deliverable.

Working on behalf of Minneapolis-based Gardner Builders, Briq developed a “digital twin” of a new office construction with a room-by-room inventory of every asset. “When a product or specification needs to be found in a building, there is finally a place to go to simply search for what is actually in that building,” said Briq CEO, Bassam Hamdy. The blockchain-encoded specifications are granular—paint colors, ceiling fixtures, LED bulbs, door hardware—plus manuals, warranties, and service life in a countdown clock that building owners can monitor.

“Any improvements and refurbishments to the building can be documented, and the whole repository can be transferred to new owners if the asset is put up sale,” said Ellis Talton, Briq’s director of growth marketing. In other words, building owners get a living ledger of everything that has happened with the building.

Overcoming cultural obstacles

Engrained practices in the construction sector will likely prolong widespread blockchain adoption. “The construction industry is technologically advanced in many aspects of what it does,” said Talton of Briq. “But the industry is very relationship based. There are many family-owned firms and private companies. The selection of contractors and subcontractors can be based on relationships that have existed for decades.”

Talton also noted that very little money—less than one percent of revenues (versus 3.5 to 4.5 percent in aerospace and automotive)—is invested in upfront contracting and technology infrastructure for managing complex construction projects. “The vast majority of the projects costs are in the building process, including the people and materials,” he said.

Scott Nelson, CEO of Sweetbridge (where one of us — Don — is an advisor), finds construction a natural for blockchain-based project management: “Projects are well-structured and contract-based. Objectives are clear—be on-time, on-spec, and avoid rework. Classic project management techniques still work, but projects can benefit from a more decentralized and agile approach where transparency is high and parties can be compensated for outcomes as well as work performed.”

Identifying applications of blockchain in project management

Over time, blockchain will have breakthrough applications for project management. We encourage organizations to explore and capitalize on this potential. Here are a few next steps.

Identify use cases for blockchain adoption. Look where success depends on mobilizing resources across enterprise boundaries; where identities, contracts, and payments must be audited and protected; and where the provenance and ownership of assets must be tracked. Here are a few ideas:

  • A reputation ledger that tracked subcontractors’ deliverables could help to identify reliable subcontractors for a project.
  • Smart contracts that identified accountabilities and triggered milestone-based payments could automate agreements.
  • Blockchain-enabled applications that aggregated data into a shared project management dashboard could help to manage workflow.
  • A distributed ledger that chronicled the construction process end to end could record all building inputs and assets, including warranties and maintenance checkpoints.
  • Blockchain-enabled apps that tracked materials, testing, and results against building codes and standards could streamline inspections.

Develop prototypes and pilot projects. Do preliminary analysis: audit the systems in use, consult their users, and think about who would need to be involved in identifying viable options, selecting one to prototype, designing the pilot, and participating in testing.

Make a business case for investing in blockchain. Identify ways blockchain can increase project success, such as improving processes and organizational capacity to locate and share large quantities of data with specific individuals and entities.

Said Bowcott of Aon, “Collectively, we are all better off if we encourage data collaboration and use blockchain and machine learning to help us establish longer-term industry roadmaps for investments, and technologies that can boost productivity and efficiency and lessen risk.” While the fundamentals of project management will remain important, blockchain enables managers to focus their talents on solving problems and achieving better project outcomes.

Source: https://hbr.org/2019/07/how-blockchain-will-change-construction

18 Jun 2019

Ethereum Public Blockchain Favoured

A Polish bank has bucked the trend of companies and institutions experimenting with blockchain technology using private, permissioned ledgers. Warsaw-based Alior will reportedly use the Ethereum public blockchain to build a system to let customers check the authenticity of documents they receive from the bank.

By using a completely permissionless, public blockchain, the Alior authenticator feature is something of a world first. Previously, banks have been reluctant to work with any true crypto project and have favoured permissioned systems based on Ethereum or another blockchain platform.

Alior to Build Directly on the Ethereum Blockchain
The news of the Alior authenticator feature broke earlier today via Forbes. The publication described the use of a public blockchain as being “among the very first.”

According to Tomasz Sienicki, the blockchain strategy lead at the bank:

“Our mission is to be disruptive, so we want to provide innovative solutions, and we want other banks to follow us as well. We welcome if somebody copied our solution… We are showing that it’s possible to use public blockchain even if some people think it’s impossible.”

The decision to build such a feature using the Ethereum blockchain has been driven by financial regulations in Poland. The law states that the public must have access to all documents from a bank in a durable medium. In 2017, the nation’s Office of Competition and Consumer Protection ruled that a bank website was not an adequate way to deliver information to a customer since it could easily be changed.
This prompted Alior to explore how they could bring similar online banking convenience to their customers, whilst remaining compliant with regulations. Their experimentation led to the founding of what the bank calls its Blockchain Center of Excellence. Established last October, the department’s first implementation of blockchain technology so far is the bank document authenticator.
Public vs Private Blockchains
There has been a lot of debate over public and private blockchains in recent years. Many crypto naysayers hold the opinion that projects such as Ethereum will be ignored in favour of distributed, permissioned ledgers that the entities using them can control. However, many of those more learned on the subject of cryptocurrencies argue that a permissioned blockchain sacrifices almost everything remotely innovative about the technology.

Blockchain is great for removing the need for different parties to trust each other when doing a transaction of some kind. If you have to request permission from a central authority that created and controls the network to participate, then there is very little ground being broken by such a system.

Hopefully, more companies like Alior will see how much more powerful a tool for disruption a public blockchain like Ethereum is over those glorified, centralised databases that are being created by numerous companies trying to get their heads around this new technology, whilst not rendering their own business obsolete in the process.

Source:
https://www.newsbtc.com/2019/06/17/ethereum-public-blockchain-favoured-for-document-authenticator-feature-by-polish-bank/

10 Jun 2019
Is there a weak link in blockchain security?

Is there a weak link in blockchain security?

Recent research revealed that blockchain is set to become ubiquitous by 2025, entering mainstream business and underpinning supply chains worldwide.

This technology is set to provide greater transparency, traceability and immutability, allowing people and organizations to share data without having to be concerned about security. However, blockchain is only as strong as its weakest link. Despite the hails surrounding blockchain’s immutable security, there are still risks surrounding it that organizations must be aware of – and mitigate – prior to implementation.

It is important to understand that there are two types of blockchain – permissionless and permissioned. The most prominent example of permissionless blockchain is Bitcoin – a public blockchain network that anyone can participate in. Cryptocurrencies like bitcoin favor this type of blockchain technology because it enables all users to track, verify and confirm transactions, regardless of whether users choose to be anonymous or not.

The other blockchain model is permissioned (also known as private blockchain) – and is mainly used for business applications. These networks are only accessible to known entities such as partners, suppliers or customers. With permissioned blockchain, a company establishes protocols to achieve consensus, and verify and assemble blocks. This set up can deliver thousands of transactions per second and provide granular management and control over who sees and accesses the transactions.

In both cases, the main benefit is the trust and transparency that blockchain brings – all parties involved in the network have total visibility into the transactions recorded in the blockchain ledger and each block is tied to the block before it.

This transparency makes blockchain extremely difficult to manipulate at scale. While the blockchain platform itself may be secure, there is still some work to be done to ensure organizations are equipped to make their networks secure end to end. For true security, organizations must focus on the last mile connection between a physical event and the digitized record of this event.

If these points of entry to the platform are tampered with, the blockchain is rendered worthless. It is therefore imperative that organizations secure all points of entry, and assess the risks, before they consider deploying blockchain on a broad scale. They will need to consider security at all layers, most importantly:

Infrastructure
This starts with ensuring data and transactions entered in the blockchain ecosystem are adequately protected from manipulation. The infrastructure these networks resides on must also have the necessary protections in place. With blockchain, you are only as strong as your weakest link.

If integration points are compromised, the entire blockchain ecosystem could be at risk, meaning that blockchain credentials and data could be exposed to unauthorized users.

Identity and access management
To prevent unauthorized parties from accessing blockchain data, a combination of encryption and identity management tools are needed. Stolen credentials could potentially allow a cybercriminal to access the blockchain platform, regardless of how secure it is. Organizations must deploy identity and access management controls. Encryption should also be deployed to ensure that data is not stolen, manipulated or leaked in transit.

End users
The insider threat should be a focal concern when it comes to blockchain too. Organizations must consider that employees, partners and suppliers – be it unintentionally or maliciously – can cause security incidents that impact the blockchain.

To mitigate this, organizations should deploy security awareness training for employees and outline clear security parameters and responsibilities with partners. This will stop employees from making careless mistakes and may also ward off malicious insiders. In line with these requirements, blockchain can provide advanced security controls – for example, leveraging the public key infrastructure (PKI) to authenticate and authorize parties, and encrypt their communications.

Data governance
Blockchain-based networks are built on shared business interests creating a system of trust. However, as the network grows, participating entities could leave the network and new ones may join, leading to ambiguities around operational considerations around data sharing and data ownership. These could result in serious regulatory and reputational repercussions for organizations as data owners, unable to secure the customer data.

Interoperability
Organizations are multi-faceted and have multiple revenue streams, often linked to each other. One of the major challenges to blockchain adoption has been a lack of interoperability across different blockchain networks. There have been recent developments, with major players embarking on developing interoperable networks, which could boost blockchain interest to a different level, at the same time introducing additional levels of vulnerability.

Smart contracts
A key component of blockchain networks is the Smart Contracts, which are developed using different languages on the platform being used, like Solidity being used in Ethereum. These languages allow developers to make changes to the underlying blockchain networks, causing vulnerabilities. However, from an enterprise blockchain perspective, a solid governance mechanism using permissioned chain can establish a secure system in place to restrict the privileges to governing body.

To achieve the most value from blockchain, both now and in the future, organizations must take responsibility for their safety and security at all levels – application, Infrastructure, data and partners.

By conducting a blockchain risk assessment and addressing key risks, organizations can make sure they are well positioned to leverage the efficiencies, transparency and cost-effectiveness provided by blockchain without opening themselves up to unexpected risks. The most pragmatic way for organizations interested in blockchain is to test the concept through pilot programs. Pilots should be focused on the areas that offer organizations the most control and companies should take these weak links into consideration.

Ultimately, blockchain has the ability to solve business issues relating to traceability, responsiveness, and trust. By taking a carefully planned approach to implementation, and understanding blockchain’s weak links, organizations can unlock the true value of blockchain, creating new opportunities and reducing inefficiencies.

Source:
https://www.helpnetsecurity.com/2019/06/10/weak-link-blockchain-security/

21 Apr 2019
Blockchain and Law: Some Insights on Using Blockchain in Governance

Blockchain and Law: Some Insights on Using Blockchain in Governance

We all know by now that blockchain has the capacity to disrupt and transform the way we live. But, how much and to what extent? Given the recent trends, it is expected that blockchain will become mainstream by 2020. For now, let’s explore its surpassing impact on the legal industry.

With respect to blockchain in the blockchain industry, a majority of the disruption lies in a scripting language and a set of protocols commonly known as smart contracts. You can see them disrupting banking, financial services, payment industries for now, though these disruptions are not limited to merely these industries. In simpler terms, smart contracts use blockchain to facilitate transactions and their use is preferable over traditional modes because of their ability to save payment and transaction costs and facilitate the instantaneous clearing of transactions.  

Given the disrupting effects that blockchain has generated over the course of years, by delivering increased convenience, reduced risk, efficiency for service consumers and lower cost of operations for financial services providers, it has become almost essential for lawyers to understand how to communicate securely and protect their client data.

Let us look at some of these governance use cases and their use cases for a blockchain development company in the legal industry.

E-discovery and Evidence: Changing the Rules of the Game

Traditionally, e-discovery software is prevalent in India and other jurisdictions abroad and are used to search documents, emails and other artefacts in the litigation discovery process. Given the fact that blockchain is an immutable and virtually infinite log, it is natural to expect that a majority of legal procedures will be supplemented with blockchain in obviating most evidentiary issues. But this also raises several perplexing issues, for instance, treating blockchain data as evidence will be a crucial problem in making blockchain legally accessible. For instance, in the United States, the standard for admissibility of evidence is dependent upon whether a human has sworn under penalty of perjury that the information is true. Stand-alone documentary evidence such as blockchain records are usually not permissible and are categorized as mere ‘hearsay’.

In India, similar evidentiary principles apply. For example, to submit evidence from the government or other sources, we produce the artefact and attach an affidavit to attest that the artefact was kept in the usual course of business and that the information in the artefact is true, to the best of the custodian’s knowledge. Blockchain technology, an immutable log of events, will change these evidentiary rules and in the process, create a more efficient documentary evidence standard.

Information Governance

It has been seen from past instances that law firms are relatively weak in terms of information governance and employ control mechanisms that are easily subject to breach. For instance, data break-ins at large law firms outside India have resulted in stolen client information, apart from reputational damages. Blockchain can secure this privileged information held by large law firms, especially those pertaining to contracts and other information that is legally protected. Futurists and technology vendors are working on realizing this vision as to how the blockchain will change the way lawyers operate.

Changing Privacy laws

Like any formal ledger, blockchain has the ability to become an official record for tracking the validity of transactions and other information. Though this record is effectively visible to all, individual elements of the transactions are encrypted and not publicly visible. Let’s say that if information pertaining to your passport is put on such a ledger, only the proof of transaction could be used publicly on a blockchain to prove your identity for purposes of validating that transaction, while your passport or other identity information might be securely encrypted. Hence, the underlying private data is secured.

On the other hand, there also exists the possibility of severe misuse of blockchain in breaching privacy laws. Nefarious transactions such as the sale of illegal goods or supporting a ransomware payment model can be easily facilitated through public blockchains, due to its anonymous nature.

In order to avoid these, financial organizations may be required by law to be able to permanently remove data when required to do so by a court. In Europe, GDPR is already under scrutiny with respect to its “right to erasure”, which presents issues that need to be addressed when personal information is stored in blockchain-based storage systems like IPFS, primarily since the information stored in the blockchain cannot be altered or deleted once added. With the data protection bill of 2018 in India in sight, it will be interesting to see how the law tackles these perplexing situations.

Another risk that may exist is where blockchain applications are implemented across multiple jurisdictions without a single entity responsible for their operation in any jurisdiction. Applications like these will be required to resolve issues relating to cross-border data flows and also address wider legal questions concerning enforceability, liability, dispute resolution, discovery and extraterritorial application.

Read more:
https://www.entrepreneur.com/article/332538

13 Mar 2019
Asia-Pacific has a Great Potential To Lead in Blockchain Adoption

Asia-Pacific has a Great Potential To Lead in Blockchain Adoption

Putting all the blockchain hype into perspective, if we consider analogous examples of how revolutionary technologies have historically taken root in society – from early adoption to widespread global penetration – blockchain technology can be said to have reached the “early majority” phase. That is, the tech has begun to gain traction and spread exponentially, though we’re still way off from ‘full adoption.’

Even so, with a market size now expected to exceed $16 billion by 2024, we’ll surely witness blockchain changing our world in profound ways over the next decade. The question is how and who will take part in leading.

Findings from a Global Market Insights recent report corroborate many experts’ prediction that the  Asia-Pacific region is set to usher in a new era. With the region’s blockchain market set to grow by an estimated 87 percent over the next six years, blockchain innovation is surging forward in the region.

And while analysts argue over the scope and speed of the ‘blockchain revolution,’ here are the reasons we’ll likely watch part of the next chapter of blockchain adoption unfold in the East.

Blockchain Consumers By The Billions

One of the primary reasons the Asia-Pacific region looks poised to blaze trails in blockchain is its consumer market. Not only is it big – the size of Asia’s middle class is expected to reach 3.5 billion by 2030 – but it is especially eager to embrace new technologies.

The region’s enthusiasm for cutting-edge tech can be attributed to its uniquely young, tech-curious population. Sixty percent of the world’s youth is concentrated in Asia-Pacific. At the same time, a 2016 study by the Consumer Technology Association found that, relative to the US, a much higher percentage of consumers in Asian nations tend to identify themselves as early adopters of new technologies.

Read more: https://www.entrepreneur.com/article/330012