A Practical Approach to Blockchain
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The slides aims to demystify the concepts of Blockchain, its common use cases and the security considerations around it what would need to consider when developing their own solutions leveraging a distributed ledger technology (DTL)
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A Practical Approach to Blockchain
- 1. A practical approach to Blockchain implementation 27th January 2019 $Shivanthan Balendra Head of Cyber Security Center Batelco - Bahrain
- 2. Key Objectives of this presentation • Lets talk Blockchain • What is the architecture? • What are the different types? • What a common use cases? • What does it take to build your Blockchain solution? • Key challenges and security issues? 2
- 3. What is Blockchain “ 3 Blockchain (Book) Block (Page) Transactions (Text) Blockchain is a consensus-based secure decentralized public or private database which stores information immutably over a peer-to-peer network”. (Distributed Ledger Technology – DLT) Book Analogy Easily detect removal of pages Easily identify dodgy activity Impossible to tamper entries
- 4. Key Characteristics of Blockchain 4 Once a transaction is written on Blockchain, it cannot be alteredImmutability1 You don’t have to trust anyone to trust the ledger’s dataTrust in Algorithm2 The transactions are verified by peers together through a decentralized collaborative algorithms Decentralized3 Employs cryptographic capabilities for unbreakable security across hundreds of participating nodes Confidentiality4 Entries can be verified by any one on the network based on a consensus algorithm Auditability5
- 5. Blockchain Architecture (RecordsKeeper Reference Model) Application Layer Tools Applications Incentive Layer Consensus Layer Network Layer Data Layer Platforms
- 7. Blockchain Use cases 7 Election Polling Credentials Verification Legal Agreements (aka Smart Contracts) Law Enforcement For Organizations For Governments Compliance Distributed Cloud Storage
- 8. How to build your own Blockchain solution 8 Decide if its suitable for the problem you are faced with Suitability Consensus . Type Build API Decide suitable type (Private/Public/Hybrid) 01 02 0304 06 0705 Decide most appropriate mechanism to be used Decide suitable platform to implement Blockchain Platform Design instance with attributes to support Design Instance Build or customize APIs to integrate with your systems User Interface Develop admin user interface to interact
- 9. An Illustration using the RecordsKeeper platform 9
- 10. Challenges and Limitation (not a silver bullet) 10 Add only list. Not a good fit for frequent data update/deleteirreversibility1 Based on a transaction model, storing small pockets of dataLimited Storage2 Technology is fairly immature and often misunderstood with Bitcoin Illiteracy3 Higher short term setup costs prevents its widespread useCosts4 High energy consumption and scalability is often deemed negative. Naysayers5 Lack of industry standards governing the entire processGovernance6
- 11. 51% Attack (Aim to double-spend affect the networks integrity) A 51% attack consists of a group of miners who temporarily control over 50% of the network's mining Hashrate Current Hashrate - 36.52 Exahashes/s (36,520,000,000,000,004,000 Hashes per second) Eclipse Attack Sybil Attack Hacking a Public Blockchain - Bitcoin 11 • Targeted at a single party • Attempts to double-spend coins • Targeted at the Network • Impersonates multiple identities. • Spam the network • Subvert the network's reputation
- 12. Thank you!
Editor's Notes
- Book example Quran.. Blockchain is a distributed database existing on various computers at the same time. It is a decentralized ledger tracking digital assets on P2P network. Blockchain is related to cryptocurrency, but its not cryptocurrency. It’s a technology that allows a distributed ledger to be shared across a P2P network. Transactions are digital assets, which can be a representation of something physical which is a house or a car or Digital such as virtual currency or data.
- Has not been established in a certain defined way because of the non standard nature of the technology. It’s a 5 layer approach. Starting at the bottom…Base layer.. Similar to a database Core to the data within the system. Which cryptography, hashing algorithms, size of the data blocks etc.. Network layer – networking between your blockchain. Connects the different nodes to each other. Consensus Layer – whether you opt for proof of work or proof of stake.. Incentive layer – its function does not affect the functioning of the blockchain. Its not a requirement within a blockchain. Any change you make within this layer doesn’t affect the blockchain at all. Smart Contract layer.. Similar to the 7 layers of the OSI model for network communication.. Data - It’s the base layer where all the cryptographic algorithms & protocols are present Network - peer-to-peer connections and also validates relay network and node validation. Consensus - POW, POS, DPOS etc and it also consist of the user and mining permissions. Insensitive - No have direct impact on blockchain but responsible for miner reward distribution and transaction fees Application - Front end, helps to interact with blockchain
- Private v/s public – like internet and intranet. Private is permission based, read can be public and write can be only granted to authorized nodes.. Consensus can be regulated and appointed to a few nodes. (most suitable for public sector use).. Scalability issue - Transactions per second/block size limitations etc.. block creation time of 10 minutes and the block size limit Transaction processing capacity maximum is estimated between 3.3 and 7 transactions per second Privacy issues - In fact, there are many ways a person’s identity could potentially be exposed in bitcoin transactions. Bitcoin have to divulge their personal information to that exchange to create an account.
- Election - fraudulent data to be entered into the system.. Transparency – Tamper proof… Auditability - every record, or vote, receives a date, timestamp, and hash of the previous block.. Accessibility - elections could be safely conducted online Credentials verification – Verifying qualifications, college degrees etc.. Cannot happen overnight.. Require a robust DLT ecosystem, with participation from every sector of society Legal agreements – smart contracts - By leveraging new technology, a legal service or law firm can implement a variety of contracts as self-executing programs on a blockchain. (Real Estate Deeds, Rental Contracts, Trusts Powers of Attorney, Sales Contracts) Law enforcement - blockchain holds the potential to completely transform how law enforcement stores, shares, and secures its data
- GDPR – Right to be forgotten.. Not possible without the implementation of additional capabilities/controls/measure Design - what things are you looking for inside your Blockchain) – Permissions, Assets, Key Management, Address formats etc
- Data storage – BC is a transaction based model meant for storing transactions in the form of hashes. It is not meant for storing data. Current block size is 1 Mb, with SegWit you can go up to 4 MB and the current size of the bitcoin blockchain is 200Gb.
- Hashrate - number of double SHA-256 computations performed in one second in the bitcoin network for cryptocurrency mining. Eclipse - An eclipse attack is particular useful when a payer has sent some bitcoins to you in some transaction, then decides to also doublespend the same bitcoins. The doublespender (or payer) will use the eclipse attack to prevent you from knowing that there is also a doublespend transaction Sybil -