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Emerging Technologies

Understanding the Impacts of Blockchain Technology on Identification and Cyber-Security

Examples of Blockchain Technology for Identity and Security: 

Blockchain technology could be described as tamper-resistant, distributed, shared databases in which every participant on a network can share, but no one can control. It could also be referred to as a database used to store digital records or assets. Such a database is shared by a group of people known as participants. These people can submit new records for inclusion. Take note that the records will only be included in the database based on the consensus, or agreement, of a majority of the group. Furthermore, once the records have been entered they cannot be erased or changed. 

Why Is Blockchain Technology Important?

There has always been the problem of reliably exchanging information in data science especially over an unreliable network where some of the users cannot be trusted. Blockchain technology solves this problem by effectively handling the challenge. The security model of a blockchain will assume some users will attempt to manipulate valid data and/or create friction by generating false data. Blockchain platforms ensure data integrity by using a variety of consensus and messaging techniques. It is achieved by preventing valid data from being deleted or modified secretly, and by rejecting invalid data. This type of technology is worthy as it offers three major advantages when combined with traditional cyber defence strategies.

  1. To begin with, blockchain platforms assume compromise from trusted insiders and adversaries, instead of trying to defend boundaries from compromise. The basis behind their design is to ensure data is protected in a contested cyber environment.
  2. Secondly, they embrace the overall power of the network in a bid to ensure effects of malicious actors are resisted. This simply means the system will take advantage of the asymmetry of many against the few.
  3. Lastly, security provided by blockchain platforms are not dependent on trust or secrets. There are no administrators to be trusted, or passwords to be exposed.

Blockchain platforms offer an inherent security function. Therefore, they are capable of operating securely and successfully on the open internet as a result of these advantages. This can be done while being fully exposed to hostile actors, and without a trusted central authority.

Source: PWC

Use-Cases of Blockchain Technology for Identification

Blockchain technology makes managing and tracking digital identities both efficient and secure. The end result is reduced fraud and seamless signons. It will not matter whether it is walking into a bar, online retailing, citizenship documentation, national security, healthcare or banking. Identity authorisation and authentication is an intricate process woven into culture and commerce worldwide.

Identity in the context of technology has faced significant hurdles. This is mainly caused by the often-unchecked cyberspace of personal information combined with the lack of common comprehension. Events like breached accounts and hacked databases are shining light on the never ending problems of a technologically advanced society. Blockchain technology, combined with biometric technology, offer solutions to most identity related issues. This allows identity to be authenticated uniquely in a secure, immutable and irrefutable manner. 

One example of this is Humaniq, they aim to use blockchain combined with biometric and artificial intelligence technologies to provide official identification to the 1.5 billion people around the world who cannot prove their identity. Furthermore, they want to bank the poorest 2 billion people in the world without access to financial services, providing them with quality digital education and affordable smartphones.

“Humaniq is much beyond crypto-currencies. This is a social good movement gathering the best people in the world focused on converting the most advanced tech for sustainable development in the undeveloped world. Now, with this enhanced advisory board, the Humaniq project will be able to address governments and global non-profit organizations. The technological tool to tackle down the main challenges facing the 2 billion unbanked people has arrived. Humaniq will create deep impact for social good on a global scale.” said Dmitry Kaminskiy, Executive Chairman of Humaniq

Derin Cag [Left] and Dmitry Kaminskiy [Right]
Identification methods used at the time of writing involve problematic password-based systems of secrets stored and exchanged on insecure systems. Blockchain technology uses encryption which would virtually take seven billion years for a hacker to crack using a brute-force attack. It is therefore inferred that the person using the private encryption key is the owner.

Another example a blockchain technology use-case for identification is IDChainZ, a proof of concept for identity storage and authentication built leveraging distributed ledgers. It allows people to securely add identity related files in any digital format. Furthermore, it permits multiple parties to exchange, certify and add AML and KYC documentation. IDChainz is a globally subject centered, scalable and available identity system.

Founder of IDChainZ, Michael Mainelli, when writing an article on Harvard Business Review about blockchain technology wrote;

2.4 billion poor people worldwide, about 1.5 billion of whom are over the age of 14 … are often excluded from property ownership, free movement, and social protection simply because they can’t prove their identity. They are more exposed to corruption and crime, including people trafficking and slavery.”

Effects of Blockchain Technology on Various Sectors

Initially, blockchain technology was associated with Bitcoin; an easily exchanged crypto-currency without the use of intermediaries such as banks or clearing houses. The unique selling propositions of Bitcoin include the ease of transfers, negligible exchange rates and secure storage along with transactions.

Nonetheless, blockchain technology has evolved since its debut as a crypto-currency and there are many other use-cases at the time of writing. For instance, professionals such as photographers have the ability to use it to verify the authenticity of each copyrighted photo on their portfolio. Therefore, all images without verification are deemed as pirated. The same also applies for titles, deeds, contracts and other documents usually exchanged between parties in a trusted network.

Similarly the same technology is useful for use by content producers and for creating verifiable digital records. The compelling security blockchain technology provides expedites transactions while making sure each approved party has a right to access the material. Whatever the case, blockchain technology may be public or private, with all the rules involving transactions being decided by the parties involved.

At the time of writing, there are blockchain technology related research and development initiatives in sectors including finance, insurance, energy, health, transport, legal, electoral, security, accounting, non-profit and government to name just a few.

Verdict

The ability for most organisations to prevail in highly contested environments in the years to come will be determined by their ability to effectively conduct data-fighting operations. This means, protecting the ability of an individual to exploit, analyse, process, disseminate, store and generate information while interfering with the ability of an adversary to do the same. It is clear that such a move will need a means of preventing compromise to cyber enabled systems.

Given the evolving cyber threat, traditional cyber defence is unlikely to improve and is faltering. This threat not only includes a growing array of embedded computing devices and malware, but also an adversary strategy which favours data manipulation more than simple data theft. Thus, for any organisation to prevail against any attacks or manipulation they need to come up with a cyber-defence model addressing the failings of current technology strategy and future threats.

Blockchain technology prevents data manipulation by design. Any digital data on the cloud and not on a blockchain ledger is susceptible to manipulation. Police data could be breached to add, remove or edit criminal records. Medical data could be breached to make a person appear to have cancer, possibly resulting in unnecessary and deadly treatments. Driverless cars or drones could be breached to take different routes, possibly resulting in “accidents“. Credit card data could be breached to steal billions of dollars from millions of people. Voting data could be breached to undermine democratic elections and referendums. National security data could be breached to compromise military decision-making, possibly resulting in wars with allies. And the compromised entity would most likely never find out their systems got breached and manipulated in the first place. It’s better to be safe than sorry.

Blockchain platforms break many of the flaws associated with traditional network security. First, they assume threats from outsiders and insiders. Secondly, they rely on cryptographic data structures instead of failure prone secrets. This in turn offers foundations on which to add security protocols. And lastly, they use algorithmic consensus mechanisms. Such properties render them fault tolerant and able to align the efforts of honest nodes to ignore fraudulent ones. When combined, these properties allow system designers to rethink and redesign the fundamental architectures of cyber networks and systems.

Disclaimer: Our founder Derin Cag is an Advisor/Shareholder of Humaniq.

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