What is blockchain? To begin with, picture a spreadsheet that's reproduced thousands of times across a network of computers. Then imagine that this system is designed to regularly update this spreadsheet and its shared and always reconciled database.
Now you have a pretty good idea of the way blockchain functions --but also why blockchain represents a revolution based on how information is shared and secured over the'net.
Since the blockchain database isn't saved in any single location, it implies its records may be verifiable. No centralized version of this information is present for a hacker to corrupt--and since the data is hosted by millions of computers simultaneously, it's accessible to anyone on the internet. Nevertheless, it's also protected because after each transaction inside the shared ledger; and after all the ledgers fit for each and every computer in the system; the trade is encrypted using the remainder in what's known as a block. The new block is subsequently added to present preceding blocks to produce a chain of cubes --hence blockchain.
Now, it's correct that blockchain receives a bad press because of its affiliation with Bitcoin, which finds itself under political and financial siege. Cryptocurrencies like blockchain because it allows all parties to track, verify and agree upon transactions, even if the individual participants remain anonymous. But that's just one of those uses of the blockchain. Besides Blockchain itself a rising number of companies such as Ethereum and Blockstack offer the same decentralized architecture to protect and authenticate all kinds of information. Microsoft, Walmart, and JPMorgan are already beginning to deploy their own personal blockchain networks in which just spouses, suppliers or clients allowed to engage while delivering tens of thousands of trades per second.
Experts predict blockchain-based technology will revolutionize the healthcare industry in addition to the financial sector, by protecting workers' and clients' records via a constantly upgraded but decentralized accounting system. The blockchain is being touted as the solution to the Pentagon's enormous logistics challenges--and also in December, President Trump signed a statement calling for the rest of the federal authorities to look into the possible benefits of the blockchain.
In his new book, Life After Google, George Gilder goes much farther. Since blockchain technology proliferates and simplifies older clumsier centralized systems for procuring and sharing data, he predicts the outcome will be what he calls the Great Unbundling, as transactions and information on the Internet become reconnected without Google and other middlemen, "radically reducing trade costs, turning [independent] firms to networks, distributing economic strength, and enabling wealth creation and a more prosperous future."
Gilder might be right. Before we get too excited, however, it's important to note there is a cloud looming on the blockchain horizon. It is called quantum technologies.
As we've noted in this space several times, tomorrow's quantum computers will be farther powerful than today's digital classical machines. Quantum technology is going to be capable of decrypting the complex algorithms that asymmetric encryption methods used to secure virtually all electronic data, including blockchain.
Since in the end blockchain technology still uses the exact same cryptographic building blocks which are in danger to quantum pc attack. More especially, blockchains rely on ECC -- Elliptic Curve Cryptography -- to get authentication which can be broken up by future quantum computers. So rather than the response to our cybersecurity vulnerabilities, blockchains can turn out to be just as exposed as internet browsers, VPN's, along with other programs.
Luckily, the issue --quantum technology--would be also the solution. Banks, governments, and private cloud carriers are already using quantum random-number generators (QRNG's) that shield point-to-point communications as economically as a spy one-time pad.
Even more important is creating and deploying quantum-resistant algorithms that may bolster blockchain's security defenses. Just as asymmetric encryption uses challenging mathematics problems into stump classical machines, quantum-resistant algorithms will use still harder math problems to stump a quantum computer. Now the National Institute of Standards and Technology is looking to place the national benchmark for all these next-generation algorithms. Many private organizations are already growing those calculations: and a few are taking up the struggle of earning quantum-resistant blockchain technology.
U.K.-based Quantum Resistant Ledger, by way of instance, is experimenting with methods to make a quantum resistant cryptocurrency, together with the "understanding that popular existing cryptographic signature approaches (for instance, ECDSA [i.e. a variant of ECC]) in the cryptocurrency distance are exposed to a sufficiently powerful quantum computer..." Another British company, Ubiquicoin, has declared its aim to"be the first blockchain immune to quantum computing cyberattacks."
Ultimately adding actual quantum keys to blockchain software, and all encrypted information will provide the next layer of security against the two classical computers and quantum computers. But even quantum keys aren't the silver bullet to end all upcoming cyber threats, any more than blockchain--and also retrofitting a classically-based blockchain to allow it to be quantum-resistant will require enormous time and cash. Governments and companies will need to begin recognizing today, that nobody wants a blockchain-based product that will be exposed to strike tomorrow, no matter how safe it might appear today.