The Panacea –
Blockchain, the underlying technology process that powers Bitcoin, is making rapid inroads into many areas of computing and computational problems. From healthcare to fincare, innovative companies and people are rushing to bring new solutions to market. Things are being invented and published daily that are different and unique. However, there are, of course, other things that make us question the universal use of block chain. For example, while the first handful of crypto-currencies seemed to expand our understanding and concept of what money is, each subsequent addition only added marginally to the initial innovation, market share, or mind share.
The Basic Blockchain Premise
Blockchains provide a global append-only log that is publicly writable. Writes to the global log, called transactions, are organized as blocks and each block packages multiple transactions into a single atomic write. Writing to the global log requires a payment in the form of a transaction fee. Nodes participating in a Blockchain network follow a leader election protocol for deciding which node gets to write the next block and collect the respective transaction fees. Not all nodes in the network participate in leader election. Nodes actively competing to become the leader of the next round are called miners. At the start of each round, all miners start working on a new computation problem, derived from the last block, and the miner that is the first to solve the problem gets to write the next block. In Bitcoin, the difficulty of these computation problems is automatically adjusted by the protocol so that 1 new block is produced roughly every 10 minutes.
At first glance it would seem counter-intuitive to assume that Privacy and Blockchain can work together well. As described, the objective of the Blockchain, which underlies Bitcoin, is to make all its history transactions public and verifiable to a connected network of people so they can check on the veracity of the content. Everything is a computational race and open for anyone to review at anytime and nothing can be forgotten. As a matter of fact, rewriting one historical bit changes the outcome of all future transactions drastically.
One of the key tenants of Privacy, on the other hand, is the right to be forgotten. Individuals want to be able to erase historical information and deserve to reinvent and redefine themselves. In short, our human need for privacy supersedes Blockchain’s need for history.
At XcooBee, we looked long and hard at using Blockchain. At first the opposites seemed large, but the more we reviewed the use cases, the more we found space for a different approach: the XcooBee Blockchain approach. We looked for and found use cases where there is need in the privacy and digital protection process to maintain a public ledger.
However, that was not all. Finding a use for Blockchain does not automatically identify which flavor of Blockchain to use. There are several issues to review:
Size of the Network: The size of the peer network has to be sufficient to prevent any one processor to control and take over the network. Without sufficient sizable peer network the network reliability is reduced and the chance of a single processor taking control is increased. If the amount of computational power under the control of a single miner is more than the rest of the network, called a 51% attack, then that miner has the ability to attack the network and rewrite recent blockchain history, censor transactions, and steal crypto-currency using double spend attacks.
Limits on Data Storage: Individual Blockchain records are typically on the order of kilobytes and cannot hold much data. Moreover, the Blockchain’s log structure implies that all state changes are recorded in the Blockchain. All nodes participating in the network need to maintain a full copy of the Blockchain, limiting the total size of Blockchains to what current commodity hardware can support.
Limited Bandwidth: The total number of transactions per block is limited by the block size of Blockchains. To maintain fairness and to give all nodes a chance to become leader in the next round, all nodes should receive a newly announced block at roughly the same time. Therefore, the block size is typically limited by average up-link bandwidth of nodes. For Bitcoin, the current bandwidth is 1MB per new block.
Performance: A theoretical maximum speed for Bitcoin that has been circulating online is seven transactions per second. However, in reality, the Bitcoin network is achieving maximums of 3 to 4 transactions per second. This is contrasted to 56,000 transactions that Visa Network is capable of transacting per second.
Cost of Audit: As we stated earlier, the integrity of Blockchains depends on the ability for anyone to audit them back to the first block. This cost is increasing every day as the ledger grows. This, in turn, makes it more time consuming to bring up new nodes into the network to ensure sufficient size of the network.
Given the above considerations, we were especially concerned with viability of smaller Blockchains and chose to focus on using the Bitcoin Blockchain for our work.
What can we do for Privacy and Digital Rights
As a result, we at XcooBee have looked to selectively bring the advantages together where they make sense and enhance the experience for our users. We are currently working on three areas for Bitcoin and Blockchain use within XcooBee.
Document Timestamp and Signing
Normally when we exchange documents or digital media, we are not concerned to prove that the data existed at a point in time. However, this is not always the case. Many times we also have to prove that a document was not altered or a digital media was created and shared at a certain point in time. This helps to prove ownership and/or avoids legal disputes. Using the Bitcoin Blockchain to store the existence of the document and/or media ensures that the timestamps can be independently verified. Similarly, since there is no single entity in control of the Blockchain, tampering attempts are futile and no single middleman can be persuaded to alter data. This is also removes costly Time Stamp Authority (TSA) intermediaries. Anyone can review the timestamp and can use publicly available tools to validate documents.
As part of our larger Consent Management Center, we allow users (subjects) and grantees (data-recipients) to negotiate how to use private data and for how long. Once both sides have agreed on the terms, the basic existence of the agreement can be recorded in the Blockchain. It is not alterable by either party while it can be easily reviewed by all parties. With the coming changes in EU GDPR privacy laws, we expect this to aid consumers and businesses alike. In addition, government agencies can also determine whether data has been misused or is being used in accordance to the agreed upon terms.
Though the Blockchain is a cryptographic masterpiece, the setup process to use it is not an act for technological neophytes. At this point in time, it requires a few contortions. Whether it be setting up your own node, wallet, and security and/or being subject to various trading platforms with a mismatch in terms, trading fees, and restrictions. Though the premise is that you prove ownership through private keys, in the end, these are as traceable as your electricity charge when growing illegal smoking materials.
At XcooBee, one of our values is to bring easy-to-use privacy tools to the common people. As such, we are working on making anonymous Bitcoin payments available with one click. There are reasonable limits, but there is no tracing, there is no two-week setup and there is the guarantee that you have the right to be forgotten even if the Bitcoin Blockchain cannot forget a bit. In short, we are working on making forgettable Bitcoin payments possible.
We at XcooBee are continuing to review other use cases and are having vigorous discussion on which could make a difference. We have a mission to protect the digital rights and privacy of consumers and businesses alike and all tools that can assist towards that goal are being actively researched. If you have something that you think is worthy of a deeper look, please contact us.