This document summarizes a presentation about Bitcoin and blockchain technology in eGovernment. It provides a brief history of Bitcoin and blockchain development. It introduces Bitcoin and blockchain technology, discussing concepts like the blockchain structure, nodes, miners, and the Nakamoto consensus. It addresses some myths about Bitcoin and blockchain technology. It also explores potential use cases for government like authentication of documents, proof of ownership, and secure decentralized identity management.

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Bitcoin and blockchain in eGovernment
Svein Ølnes, Vestlandsforsking, eGov/ePart 2017
ITMO University, St. Petersburg, 04.09.2017

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Blockchain is a hot topic!

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 Located in Sogndal, by the Sognefjord, est. 1985
 Research areas:
 Climate change
 Tourism
 Technology and society
 Around 25 researchers
 Part of the research infrastructure in Norway
Western Norway Research Institute

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 Researcher at WNRI since 1996
 Main research field: eGovernment
 Discovered Bitcoin in 2011
 fascinated by the technology since then..
 my interest is primarily in the intersection of tech., economy and
society
 MSc in Digital Currencies (2017) at the University of Nicosia
 Disclosure: Own bitcoin and several other crypto currencies
About me

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Content
 Short history of Bitcoin and blockchain development
 Introduction to Bitcoin and blockchain technology
 Myths and facts
 Bitcoin/blockchain as a platform and possible infrastructure
 Use cases for public sector
 Q&A

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Bitcoin – «mother of all blockchains»
Published 31.10.2008 (Halloween Day)
Launched 03.01.2009
Running continually since

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Lukewarm reception, apart from..

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A classic innovation
 Building on decades of ground research in cryptography
 All components known on beforehand
 Put together in a novel way
 Solved decades of failed attempts to solve the double-
spending problem in a decentralized way
(the Byzantine Generals’ Problem)

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Bitcoin builds on
 David Chaum’s blind signatures and work with Digital Cash
 Adam Back’s HashCash and Proof of Work
 Hal Finney’s RPOW (Reusable Proof of Work)
 Wai Dei’s b-money
 Nick Szabo’s BitGold

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Content
 Short history of Bitcoin and blockchain development
 Introduction to Bitcoin and blockchain technology
 Myths and facts
 Bitcoin/blockchain as a platform and possible infrastructure
 Use cases for public sector
 Q&A

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Back to start: Distributed Internet
Paul Baran: «On Distributed Communications Network»
[Baran invented packet switching, together with (and ind.p. of) Donald Davies, UK]

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From client-server to peer-to-peer
Traditional web technology
Equal peers, no server

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Cryptographic underpinnings
 Public key cryptography and digital signatures
 Hashing algorithms
 Merkle trees (of hashes)

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Bitcoin definition
 Bitcoin is proof of ownership without the need for a third-party
 ownership of currency (bitcoin)
 ownership of any physical or digital object that this currency represents

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Bitcoin’s core architecture
 Peer-to-peer technology
 Blockchain as a storage structure
 Consensus mechanisms (Nakamoto Consensus)
 Nodes for validating transactions and blocks
 Miners with PoW for securing transactions (avoid double-spending)
 The Nakamoto Consensus is the real disruptive part!
(not the blochchain!)

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Nakamoto Consensus
 The process by which a number of computers come to agree
on some shared set of data and continually record valid
changes to that data (Van Valkenburgh, 2016)

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Cross-disciplinary

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The Bitcoin blockchain structure
Important! Tamper evident vs. tamper proof!

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Bitcoin i praksis

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Bitcoin constituencies
 Bitcoin users
 Full node: Those who download the whole blockchain and participates in
validation
 Lightweight nodes: Mobile apps
 Miners
 Secures the blockchain
 Developers
 Maintenance and further development of the open source software
 Exchanges
 Exchanging between crypto currencies and fiat money and betw. CCs
 Merchants
 Those who accept crypto currencies for goods and services

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Content
 Short history of Bitcoin and blockchain development
 Introduction to Bitcoin and blockchain technology
 Myths and facts
 Bitcoin/blockchain as a platform and possible infrastructure
 Use cases for public sector
 Q&A

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Myths about Bitcoin and blockchain technology
 «Blockchain» is a pretty meaningless concept by its own
 Need to specify what type of blockchain
 Open/Closed, security model
 Bitcoin only for criminals and shady affairs
 Recent research shows this is no longer the case (Tasca et al., 2016)
 Need to distinguish between open and closed blockchains
 Blockchain as a universal solution
 Blockchain techn. makes sense in many situations and scenarios
 However, must always ask: Why not a tradional (DB) solution?

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Open vs. closed blockchains
Open
(permissionless)
Closed
(permissioned)
Who can update Everybody with
enough resources
Selected people/org.
Who prod. data Everybody participat. Customers of org.
Incentive to follow rules Direct economic
(carrot & stick)
Reputation
Storing Distributed Centralized
Trust in central actors No Yes
Transaction costs - +
Speed (trans./sec.) - +
Immutability + -
Currency/»token» Yes No
Example Bitcoin, Ethereum HyperLedger, Corda (?)

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What is genuine with (open) blockchains?
 Immutability
 «tamper proof» vs. «tamper evident»
 .. but not in itself (ref. Ethereum and The DAO)
 Censor-ship resistant
 «unwanted» transactions will also be processed as long as they
follow the consensus rules
 Open for all and at the same time protect privacy

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Content
 Short history of Bitcoin and blockchain development
 Introduction to Bitcoin and blockchain technology
 Myths and facts
 Bitcoin/blockchain as a platform and possible infrastructure
 Use cases for public sector
 Q&A

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Bitcoin as a platform
Network/Protocol
layer
Currency/token
Application

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Blockchain layered structure

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Internet and blockchain technology stacks
Support infrastructures

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Content
 Short history of Bitcoin and blockchain development
 Introduction to Bitcoin and blockchain technology
 Myths and facts
 Bitcoin/blockchain as a platform and possible infrastructure
 Use cases for public sector
 Q&A

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Open or closed blockchains in public sector?
 Openness should be the main rule in public sector
 However, cannot rule out the benefits of closed/private BCs
 Blockchain technology should be perceived as a platform-
enabling technology
 as a platform technology for public sector, it should be open
 as an information infrastructure, it needs to be open
 Look at the development of blockchain technology the same
way as the development of the Internet
 gradually developed to an open network
 the web also developed into an open platform (remember the
extranets?)

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Bitcoin and blockchain technology in public sector
 Authentication of documents
 badges, course certificates, CVs
 other certificates and licenses
 ++
 Proof of ownership
 property
 +++
 Security and privacy
 secure, decentralized identity management
 enhanced privacy
 Think of Bitcoin/blockchain as a new Internet-based platform!

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Certificates (birth cert. ++) on the blockchain

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Domain name and password on the blockchain
 «One password to rule them all»
 Secure web (HTTPS)
 Domain names registered directly on the blockchain
(e.g. NameCoin)

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Relevant literature

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More literature..
 «Bitcon – A Peer-to-Peer Electronic Cash System»
Satoshi Nakamoto, 2008
 «Open Matters - Why Permissionless Blockchains are
Essential to the Future of the Internet”
Peter van Valkenburgh, Coin Center
 «Beyond Bitcoin – Enabling Smart Government Using
Blockchain Technology»
 Svein Ølnes, eGov 2016, Springer LNCS
 «Deja vú all over again: Thinking through law & code, again
Lawrence Lessig, https://vimeo.com/148665401

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Other resources
 News about Bitcoin and blockchain technology
 CoinDesk (www.coindesk.com)
 Coin Telegraph (www.cointelegraph.com)
 Bitcoin Magazine (www.bitcoinmagazine.com)
 + many more
 Bitcoin blockchain (and other BCs) in real time
 www.bitcoin.info
 www.tradeblock.com/bitcoin
 https://data.bitcoinity.org
 www.statoshi.info
 + many more

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Content
 Short history of Bitcoin and blockchain development
 Introduction to Bitcoin and blockchain technology
 Myths and facts
 Bitcoin/blockchain as a platform and possible infrastructure
 Use cases for public sector
 Q&A

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Thank you for your attention!
Email: sol@vestforsk.no
This presentation:
http://www.slideshare.net/sveino/eGov2017
Bitcoin-addresse:
171cQgAyEkrMn2xntQfARz4XFeWzNHK8iZ