Blockchain: beyond trust
I. Trust has always been a prerequisite
The Trust Paradox
Trust is a paradoxical notion. In order to trust someone or something, you have to feel safe and secure when interacting with them / it. The notion of security can be rather subjective and hard to describe in explicit terms, but it nonetheless highlights the paradoxical nature of trust. Trust means believing that something is safe and reliable – however, once an optimal state of security is reached, there is no more need to ‘trust’, because you ‘know’ that the system is reliable. Therefore, absolute trust in a system actually means that there is no need at all to trust anything in this system. Such systems can be qualified as trust less. Blockchain, the core technological component of most Distributed Ledger Technologies, is designed to bypass the need for trust in a distributed network of computers coordinating information in order to create distributed applications.
The increasing need for information coordination
The 20th century’s intellectual vivacity, energized by previous industrial revolutions and above all by the major conflicts of this period, incentivized scientists to develop revolutionary theories and practices in science and engineering. This resulted in a need for a dramatic improvement in large-scale coordination, that quickly emerged amid nation states as a key requirement to sustain technological progress and economic growth through such agitated times. Therefore, information technology and computer sciences became a crucial tool to increase the efficiency of global information management.
An over-reliance on trust: the next barrier for information coordination
Today, forty years after internet was first introduced in the 1980s, big data flows almost freely and instantaneously across the world wide web. The free flow of information represented a step forward towards global coordination, but a new barrier soon emerged: an over-reliance on trust.
II. Information Security: an antidote to our over-reliance on trust?
It is easy to fake anything online. A well-designed website can mask a broken business. Well-written content produced by algorithms can influence readers and spread all manner of dubious and unqualified information. By and large, it is safe to say that anyone can engage in online interactions without being able to verify that the physical requirements of those interactions are effectively being met.
Take, for example, the infinite chains of media websites endlessly republishing the exact same content created months ago by a competitor, without ever mentioning it. Or even the last ad you saw online promoting the chance to buy haute couture collection pieces at a 90% discount.
Is it possible to be 100% sure, without even a shred of proof, that the article’s author’s intellectual property has been breached, and that the fashion collection wasn’t in fact what the ad said it was?
In other words, can we bypass the need for trust in the information we are exposed to, in order to know if the information is true?
Blockchain is not a silver-bullet solution to this problem. However, because it does, in fact, improve information security in trust less systems, it is the best shot we have at becoming less reliant on trust.
III. When is information secure?
Securing information centrally in a single database is a relatively straightforward task. Securing information in a database distributed among a network of many ‘untrusted’ computers (a distributed ledger) is another, far more challenging task.
People (peers) might try to mislead other peers: they might delete information, send a fake ledger to new participants, create content on behalf of another peer, fabricate conflicting information in order to blur the truth, or release information that was not intended to be revealed in the first place. In short, they can compromise information.
Solving the information security puzzle in a trust less distributed network requires the enforcing of four specific parameters:
- Integrity: Impossibility to delete an information or to lie about when it has been added to the ledger
- Authenticity: Ability to associate an information to an established identity
- Availability: Ability to avoid or to handle conflicting information in order to make it available
- Confidentiality: Impossibility to obtain details relating to a piece of information if not allowed in the first place
Various tools are used to ensure adherence to these four parameters. Blockchain technology, in the strictest sense, can only guarantee information integrity.
IV. To what extent can Blockchain secure information?
The term “Blockchain” comes from the architecture of the chronological chain of blocks containing the information. This chain of blocks fragments the ledger in such a way that trust-less peers can maintain an updated version of it into their respective computers, such that the information’s integrity is continuously ensured across the whole network. This happens regardless of whether a peer downloads the ledger for the first time, quits the network and doesn’t update the ledger for years and then comes back, or remains constantly connected.
In a nutshell, in a trust-less peer-to-peer system, the blockchain structure ensures that the information stored in the distributed database is immutable, and that no one in the network can bypass information integrity without being rejected by honest peers.
Of course, integrity does not mean complete security. For instance, if conflicting information exists in the ledger, there are no trust-less methods to say which piece of information is true simply through a blockchain structure. However, a more complete Distributed Ledger Technology can handle this issue.
Technologies combining Blockchain with additional solutions to solve the trust-less information security puzzle are generally referred to as Distributed Ledger Technologies (DLT).
For instance, distributed consensus systems are systems in which the integrity, authenticity and availability of information is guaranteed in a trust-less way. This is made possible by integrating additional technology on top of the blockchain infrastructure. Digital signatures and consensus algorithms are typically utilized, respectively, as a method to authenticate information and as a ‘truth filter’ that only validates information considered ‘true’ by the trust-less system.
V. Consensus governance
Using consensus algorithms as a gatekeeper, it is possible to set up any rules for a Distributed Ledger Technology. Distributed consensus is used to establish what the truth is based on a specific set of rules. Those rules are determined by the validator peers, generally at the launch of the blockchain, in the genesis block (the first, founding block of a blockchain). A DLT is defined before everything else by its rules.
Rules clusters can be described as follows:
- Right to read information stored in the ledger
- Right to write new information into the ledger
- Right to validate information waiting to be stored in the ledger
Validators are responsible for enforcing the rules among the distributed trust-less network: they collectively establish what is a valid piece of information by accepting it or not. They can establish rules at the launch of the DLT, or change the rules once the DLT is already operating by synchronizing with a majority of other validators. Therefore, the ‘immutability’ of information is in fact affected by the validators’ ability to synchronize and reach a consensus to modify previous information.
This notion of validating power introduces a slight nuance to the DLT’s ability to bypass trust: the degree of decentralization within a DLT’s governance. Across a spectrum of options, in more centralized governance systems (permissioned DLTs), peers need a special authorization to join the DLT network. In more decentralized governance systems (permission-less DLTs), any user can join the network.
VI. Permissioned and Permission-less DLT
The more decentralized a DLT’s governance is, the lower the probability that the DLT’s rules will change due to the synchronization of a majority of its validators.
This tradeoff between governance flexibility and decentralization is the key to understanding the versatility of DLTs. An application whose goal is to ensure the highest level of information immutability will have little interest in a DLT whose rules can be changed at any time by a consensus of peers in a more centralized governance. It will prefer to use a decentralized, permission-less consensus algorithm, where newcomers don’t require any prior authorization to join the DLT’s network as a simple user or as a validator.
For example, document anchorage (a technique to secure the proof of existence of a document at a given point in time) relies on Bitcoin’s blockchain, which is currently the permission-less DLT with the most stable rules and the most decentralized validator network.
On the other hand, companies implementing a DLT to track supply chain (in industries such as healthcare, food and automotive), to automate settlement processes (such as banks), or again to distribute private tokens (potentially every industry), would prefer a centralized network of validators (called a consortium) gatekeeping the DLT they rely on. A more centralized governance makes it easy to introduce flexible privacy, changes and updates into the DLT.
Therefore, such applications will be more compatible with permissioned DLTs like those offered by Corda (R3) or Quorum (Ethereum), whose governance is more centralized but whose rules are much more flexible.
VII. We can make the difference
Our brand new blockchain service offering is already making waves on the international market.
In June 2018, we were selected by the European Union Intellectual Property Office (EUIPO) to take part in the first EU Blockathon Challenge, a pan-European competition to stimulate innovation around blockchain technology. The aim of the competition was to develop a blockchain-based tool to prevent the spread of counterfeited goods across Europe, which can have particularly serious consequences in the pharmaceutical, secure hardware or food supply chains. We were among the top 3 solution providers in the Custom Authority category with “Trust Track”, a tool to help custom agents identify counterfeited goods and prevent them from entering EU borders. We also entered the final rounds of the 2018 Innovative Medicine Initiative’s (IMI) ‘Blockchain for Healthcare’ challenge. Our healthcare division created a consortium that brought together various stakeholders from the private and public sector (hospitals, pharmaceutical companies, insurance companies, etc.). The aim was to build a pilot product to enhance stakeholder data management and privacy, but also to optimize medical research and to facilitate patients’ access to new medicines.
VIII. Blockchain is a critical tool for progress
We believe that the world’s economy is being disrupted at a rate faster than ever before, impacting all of its stakeholders.
Because of our over-reliance on trust, we require information to be processed and verified by human intermediaries, meaning that there is someone in charge of checking whether the information is appropriate, reliable, etc. This results in high processing costs. Blockchain offers a solution to this problem and could disrupt the way we rely on intermediaries to process, validate and store information.
Activities and transactions such as online payments, order management or price discovery largely depend on trusted intermediaries like clearing houses and market makers to be correctly processed. Online bank transfers, for instance, can take days to clear. Blockchain’s intrinsic ability to secure transactions could reduce this lag time to just a few seconds.
Across multiple sectors, supply chains have become increasingly complex and expensive to track properly. As a consequence, counterfeited goods easily flood the market – according to EUIPO data, revenue from counterfeited goods rose to a trillion dollars in 2016 from $250 billons in 2008.
Meanwhile, there are people who are unable to provide proof of identity to open a bank account or access public services, and contracts require a mountain of paperwork to be signed by all the parties in order to be enforceable (not a very environmentally friendly practice). Blockchain can solve all these issues.
That is why our talent community, actively working to put technology at the service of humans, believe that Blockchain is one of the many game-changers that will contribute to making the world a better place to live, build and share.
Our mission is to share our expertise with our clients and partners, to innovate with them, and to provide strategic technology consulting for them to be ready for the next disruption wave.