Blockchain Technology and its Magic
There is quite a buzz about Fintech and Bitcoin becoming a threat to the Banks. My article is aimed at creating awareness about Blockchain.
Key topics discussed in the article,
- Blockchain development and its importance in solving problems
- Applications of Blockchain in different domains.
Blockchain — the first thing which comes to my mind is the Fintech bubble and a domain of fraudsters. Though this definitely has been a minuscule deterrent to the adoption of technology. The ground reality is that the Government, Educational institutes, Enterprises, and startups have seen a sudden surge in the adoption of Blockchain across domains.
What is BlockChain?
Blockchain is a new technology of Trust redefining the way we transact. Blockchain has the potential to change the way we buy and sell, interact with government and verify the authenticity of everything from property titles to organic vegetables. It combines the openness of the internet with the security of Cryptography to give everyone a faster safer way to verify key information and establish trust. — Goldman Sachs
Dubbed as the “city of the future”, Dubai, which plans to have robot cops, flying taxis and autonomous vehicles on its roads in coming years and appointed a minister in-charge of Artificial Intelligence recently, is planning yet another transformation: to become the world’s first blockchain-powered government. By 2020, the Emirate wants all visa applications, bill payments and license renewals, which account for over 100 million documents each year, to be transacted digitally using blockchain.
As per the reports by Forbes — Dubai government is conducting government and private workshops to identify services which can be enhanced by Blockchain adoption, the strategy could save 25.1 million man-hours or 1.5 billion$ in savings per year for the Emirates.
“The aim is to unite all real estate and department services on a single platform using Blockchain”.
Breaking down further...
Blockchain, as it might appear, is not a complex system to understand. It is a public or a private decentralised ledger which contains a piece of simple information about “Person X transfers an Object to Person Y”. This object can be anything, ranging from Property titles to government records. Using this kind of ledger, the Blockchain can be used to store practically any kind of information and hence it can disrupt each and every sector in the world. But this can also be done in an excel sheet or a web database. Being a ledger alone does not make Blockchain a technology to spend time on.
Blockchain is a technology that gets rid of the central database or person controlling the database. The simple technology of Blockchain is that instead of having all the data go on one central server, every user who uses the database will keep a complete copy of the database on their machine and every transaction that is made by any person is updated to every computer in the network keeping the network in sync. This also can be achieved by any distributed system but Blockchain has more to it.
Forging a Bank Statement
Here is a simple example, Let’s assume we have to update/forge one of the records of our Bank statement. A typical bank statement looks like the image below —
To forge the first debit entry of the bank statement with debits, credits and balance, if we change the value of $57.48 to 60$, we will have to change all the corresponding values as well to keep the balance in sync hence making the process a bit difficult to complete. Keeping in mind the concept of decentralised technology, one can make this change without notice on a single machine but if this change has to be made on ‘N’ different machines, the complexity of the problem statement increases and it becomes more and more difficult to update any entry.
This is the next property of Blockchain — Each Block/Entry into the Blockchain is linked to its previous entry hence making it a huge record of digitally linked transactions. This property combined with the concept of hashing and digital signatures makes it impossible to add, remove or delete data in all the machines without being noticed by anyone else in the system.
Hashing and Digital signatures
Hashing refers to the concept of taking an arbitrary amount of input data, applying some algorithm to it and generating a fixed size output data called the hash. Input can be any number of bits that could represent a single character, an mp3 file, an entire novel, a spreadsheet of your banking history or even the entire internet.
Digital signatures like real signatures are a way to prove that somebody is who they say they are except that we use cryptography or math which is more secure than handwritten signatures that can be easily forged. A digital signature is a way to prove that a message originates from a specific person and no one else like an attacker.
Using the above two concepts, we can make it more difficult to update the bank transactions. Using hashing, along with each record, we store the hash of the complete transaction and this hash is used as an input to the next transaction.
Transaction 1 = Transaction + Hash(Transaction)
Transaction 2 = Transaction + Hash(Transaction + Previous Hash)
Using the above concept, forging the bank statement becomes more difficult and to add more toppings, each transaction is signed by a digital signature of the user authorised to make a transaction hence not allowing any unauthorised person/attacker to make a change. Even if an attacker is able to make a change in one of his copies, it is practically impossible to change it in the complete network. Also, the complexity of the problem increases as the size of the dataset increases.
Hence using Distributed nature of Blockchain clubbed with Hashing and Digital signatures technique — we get an immutable and irreversible solution for transactions.
We all have visited a doctor once in a while and if someone is suffering from a chronic disease, the case is worse. There have been a lot of improvements in healthcare but the way data is being handled is very old fashioned. We can use Blockchain, Hashing, and Digital signatures to help solve the data related problems we face today.
A medical chain is a blockchain application in healthcare. The medical chain uses Blockchain technology to create a user-focused electronic health record whilst maintaining a single true version of user’s data. Medical chain enables users to give healthcare professionals access to their personal health data. The medical chain then records interactions with this data in an auditable, transparent and secure way on the medical chain’s distributed ledger.
At all times, the patient privacy is protected and users can control who view their records, how much they see and what length of time.
In the current healthcare system, information spread over multiple systems, hospitals, networks, and potentially countries.
There are multiple fragmented records from the same patient, held at different institutions all with their own snapshot of the patient’s health at the point of their interaction with them, such as blood tests, imaging, and clinic letters. This system will chronologically arrange all of these records and filter them into the specific categories above to aid data handling. Such a categorization would make the records more accessible and understandable for patients and it will also facilitate researchers in searching for the information relevant to them.
The system provides the user, being the owner of their own medical records, full access and control over their data.
Blockchain in Sports
There is a sports body which has to make a decision of selecting a team of 15 players but it is only to be disclosed in 5 days from now. But the sports body has to prove to the upper management that the team disclosed 5 days ahead of the game is the one they had selected earlier. How can this example be solved using Blockchain? What type of Blockchain should we use for this?
Select the team, put their names in a file. Create a hash of that file and upload it on a public blockchain at a specific address signed by the digital signature of the sports body in an encrypted format(optional). Now whenever the team is disclosed, the upper management can make a hash of the similar document again and verify against the hash uploaded on Blockchain. They can verify whether the hash is concordant with the Sports Body using the digital signature verification. This way a blockchain can help in bringing transparency to the selection process while maintaining secrecy.
Blockchain in Education
When a University gives a degree to the student — university signs the hash of the Degree using the public key of the user which gets distributed across multiple nodes on the network. It creates an immutable and irreversible fingerprint on the Blockchain network for the degree provided. It can also be verified that the hash has been uploaded in my case by the university at a particular date. Whenever I want to share my degree with anyone, instead of getting notarized, I can simply share the PDF document and verify the same using document hash stored on Blockchain to justify the document is the same which was provided by the university and no one has tampered the document.
Assuming this is done for all the documents which I ever submit to get admission to an institute or get a job, it will remove all the third parties responsible for doing background checks for the individuals and the corporates and education institutes can trust easily that the document they are viewing is 100% authentic.
This is a very simple example of Open Blockchain and encryption for Documents sharing and removing the 3rd party notary service.
Is Blockchain Magic?
The article elaborately justified the efforts of governments agencies investing in adopting Blockchain Technology. Does Blockchain technology magically solve problems? The answer is NO. Blockchain is not a panacea to the world’s problems.
The blockchain is a digital ledger and it has properties such as being immutable and irreversible but if some data is corrupted at the source level, blockchain cannot magically fix that data. If we say Blockchain can be used to track fishes from source till destination and the farmer enters wrong data, even if we deploy a Blockchain solution for this, this problem cannot be solved.
Once a data is entered into Blockchain, it ensures that it cannot be changed without notice so Blockchain should be considered as a secure data store instead of a problem-solving solution of practically anything.
Blockchain alone cannot solve these problems and it is a way to help reduce the number of problems which we face with conventional database systems. Solving data entry problems are more of IOT problems to ensure either data is entered using sensors or minimum data entered by the users is properly validated before storing on Blockchain. For instance — to store temperature readings of Blockchain for a Pharma company, it makes more sense to deploy a temperature sensor sending periodic temperature readings to Blockchain instead of a person logging in temperature data manually.
It is topic worth exploring but it is not a magic wand to solve problems in multiple domains. With the cost of cloud storage coming down exponentially and with the increase in computing power, using Blockchain solution combined with IOT and ML makes sense in years down the line.
If you would like to discuss more on Blockchain and want to see if Blockchain can really solve your problem, feel free to write to me email@example.com or in the comments below. I would love to discuss and know your thoughts and experience using Blockchain.
P.S: The above are my thoughts and views on Blockchain.