Category: Cryptocurrencies

“The pool’s run dry” – analyzing anonymity in Zcash

Zcash is a cryptocurrency whose main feature is a “shielded pool” that is designed to provide strong anonymity guarantees. Indeed, the cryptographic foundations of the shielded pool are based in highly-regarded academic research. The deployed Zcash protocol, however, allows for transactions outside of the shielded pool (which, from an anonymity perspective, are identical to Bitcoin transactions), and it can be easily observed from blockchain data that the majority of transactions do not use the pool. Nevertheless, users of the shielded pool should be able to treat it as their anonymity set when attempting to spend coins in an anonymous fashion.

In a recent paper, An Empirical Analysis of Anonymity in Zcash, we (George Kappos, Haaroon Yousaf, Mary Maller, and Sarah Meiklejohn) conducted an empirical analysis of Zcash to further our understanding of its shielded pool and broader ecosystem. Our main finding is that is possible in many cases to identify the activity of founders and miners using the shielded pool (who are required by the consensus rules to put all newly generated coins into it). The implication for anonymity is that this activity can be excluded from any attempt to track coins as they move through the pool, which acts to significantly shrink the effective anonymity set for regular users. We have disclosed all our findings to the developers of Zcash, who have written their own blog post about this research.  This work will be presented at the upcoming USENIX Security Symposium.

What is Zcash?

In Bitcoin, the sender(s) and receiver(s) in a transaction are publicly revealed on the blockchain. As with Bitcoin, Zcash has transparent addresses (t-addresses) but gives users the option to hide the details of their transactions using private addresses (z-addresses). Private transactions are conducted using the shielded pool and allow users to spend coins without revealing the amount and the sender or receiver. This is possible due to the use of zero-knowledge proofs.

Like Bitcoin, new coins are created in public “coingen” transactions within new blocks, which reward the miners of those blocks. In Zcash, a percentage of the newly minted coins are also sent to the founders (a predetermined list of Zcash addresses owned by the developers and embedded into the protocol).

Continue reading “The pool’s run dry” – analyzing anonymity in Zcash

Incentives in Security Protocols

The 2018 edition of the International Security Protocols Workshop took place last week. The theme this year was “fail-safe and fail-deadly concepts in protocol design”.

One common theme at this year’s workshop is that of threat models and incentives, which is covered by the majority of accepted papers. One of these is our (Sarah Azouvi, Alexander Hicks and Steven Murdoch) submission – Incentives in Security Protocols. The aim of the paper is to discuss how incentives can be considered and incorporated in the security of systems. In line with the given theme, the focus is on fail-safe and fail-deadly cases which we look at for the cases of the EMV protocol, consensus in cryptocurrencies, and non-economic systems such as Tor. This post will summarise the main ideas laid out in the paper.

Fail safe, fail deadly and people

Systems can fail, which requires some thought by system designers to account for these failures. From this setting comes the idea behind fail safe protocols which are such that even if the protocol fails, the failure can be dealt with or the protocol can be aborted to limit damage. The idea of a fail deadly setting is an extension of this where failure is defended against through deterrence, as in the case of nuclear deterrence (sometimes a realistic case).

Human input often plays a role in the use of the system, particularly when decisions are required as in fail safe and fail deadly instances. These decisions are then made according to incentives which can aligned to make the system robust to failure. For a fail deadly alignment, this means that a person in position to prevent system failure will be harmed by the failure. In the fail safe case, the innocent parties should be protected from the consequences of system failure. The two concepts are really two sides of the same coin that assigns liability.

It is often said that people are the weakest link in security, but that is an easy excuse for broken protocols. If security incentives are aligned properly, then humans are the strongest link.

The EMV protocol, adding incentives after the fact

As a first example, we consider the case of the EMV protocol, which is used for the majority of smart card payments worldwide, as well as smartphone and card-based contactless payment. Over the years, many vulnerabilities have been identified and removed. Fraud still exists however, due not to unexpected protocol vulnerabilities but to decisions made by banks (e.g., omitting the ability for cards to produce digital signatures), merchants (e.g., omitting PIN verification) and payment networks not sending transactions details back to banks. These are intentional choices, aiming to saves costs and cut transaction times but make fraud harder to detect.

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“Wow such genetics. So data. Very forever?” – An overview of the blockchain genomics trend

In 2014, Harvard professor and geneticist George Church said: “‘Preserving your genetic material indefinitely’ is an interesting claim. The record for storage of non-living DNA is now 700,000 years (as DNA bits, not electronic bits). So, ironically, the best way to preserve your electronic bitcoins/blockchains might be to convert them into DNA”. In early February 2018, Nebula Genomics, a blockchain-enabled genomic data sharing and analysis platform, co-founded by George Church, was launched. And they are not alone on the market. The common factor between all of them is that they want to give the power back to the user. By leveraging the fact that most companies that currently offer direct-to-consumer genetic testing sell data collected from their customers to pharmaceutical and biotech companies for research purposes, they want to be the next Uber or Airbnb, with some even claiming to create the Alibaba for life data using the next-generation artificial intelligence and blockchain technologies.

Nebula Genomics

Its launch is motivated by the need of increasing genomic data sharing for research purposes, as well as reducing the costs of sequencing on the client side. The Nebula model aims to eliminate personal genomics companies as the middle-man between the customer and the pharmaceutical companies. This way, data owners can acquire their personal genomic data from Nebula sequencing facilities or other sources, join the Nebula network and connect directly with the buyers.
Their main claims from their whitepaper can be summarized as follows:

  • Lower the sequencing costs for customers by joining the network to profiting from directly by connecting with data buyers if they had their genomes sequenced already, or by participating in paid surveys, which can incentivize data buyers to subsidize their sequencing costs
  • Enhanced data protection: shared data is encrypted and securely analyzed using Intel Software Guard Extensions (SGX) and partially homomorphic encryption (such as the Paillier scheme)
  • Efficient data acquisition, enabling data buyers to efficiently acquire large genomic datasets
  • Being big data ready, by allowing data owners to privately store their data, and introducing space efficient data encoding formats that enable rapid transfers of genomic data summaries over the network

Zenome

This project aims to ensure that genomic data from as many people as possible will be openly available to stimulate new research and development in the genomics industry. The founders of the project believe that if we do not provide open access to genomic data and information exchange, we are at risk of ending up with thousands of isolated, privately stored collections of genomic data (from pharmaceutical companies, genomic corporations, and scientific centers), but each of these separate databases will not contain sufficient data to enable breakthrough discoveries. Their claims are not as ambitious as Nebula, focusing more on the customer profiting from selling their own DNA data rather than other sequencing companies. Their whitepaper even highlights that no valid solutions currently exist for the public use of genomic information while maintain individual privacy and that encryption is used when necessary. When buying ZNA tokens (the cryptocurrency associated with Zenome), one has to follow a Know-Your-Customer procedure and upload their ID/Passport.

Gene Blockchain

The Gene blockchain business model states it will use blockchain smart contracts to:

  • Create an immutable ledger for all industry related data via GeneChain
  • Offer payment for industry related services and supplies through GeneBTC
  • Establish advanced labs for human genome data analysis via GeneLab
  • Organize and unite global platform for health, entertainment, social network and etc. through GeneNetwork

Continue reading “Wow such genetics. So data. Very forever?” – An overview of the blockchain genomics trend

Coconut: Threshold Issuance Selective Disclosure Credentials with Applications to Distributed Ledgers

Selective disclosure credentials allow the issuance of a credential to a user, and the subsequent unlinkable revelation (or ‘showing’) of some of the attributes it encodes to a verifier for the purposes of authentication, authorisation or to implement electronic cash. While a number of schemes have been proposed, these have limitations, particularly when it comes to issuing fully functional selective disclosure credentials without sacrificing desirable distributed trust assumptions. Some entrust a single issuer with the credential signature key, allowing a malicious issuer to forge any credential or electronic coin. Other schemes do not provide the necessary re-randomisation or blind issuing properties necessary to implement modern selective disclosure credentials. No existing scheme provides all of threshold distributed issuance, private attributes, re-randomisation, and unlinkable multi-show selective disclosure.

We address these challenges in our new work Coconut – a novel scheme that supports distributed threshold issuance, public and private attributes, re-randomization, and multiple unlinkable selective attribute revelations. Coconut allows a subset of decentralised mutually distrustful authorities to jointly issue credentials, on public or private attributes. These credentials cannot be forged by users, or any small subset of potentially corrupt authorities. Credentials can be re-randomised before selected attributes being shown to a verifier, protecting privacy even in the case all authorities and verifiers collude.

Applications to Smart Contracts

The lack of full-featured selective disclosure credentials impacts platforms that support ‘smart contracts’, such as Ethereum, Hyperledger and Chainspace. They all share the limitation that verifiable smart contracts may only perform operations recorded on a public blockchain. Moreover, the security models of these systems generally assume that integrity should hold in the presence of a threshold number of dishonest or faulty nodes (Byzantine fault tolerance). It is desirable for similar assumptions to hold for multiple credential issuers (threshold aggregability). Issuing credentials through smart contracts would be very useful. A smart contract could conditionally issue user credentials depending on the state of the blockchain, or attest some claim about a user operating through the contract—such as their identity, attributes, or even the balance of their wallet.

As Coconut is based on a threshold issuance signature scheme, that allows partial claims to be aggregated into a single credential,  it allows collections of authorities in charge of maintaining a blockchain, or a side chain based on a federated peg, to jointly issue selective disclosure credentials.

System Overview

Coconut is a fully featured selective disclosure credential system, supporting threshold credential issuance of public and private attributes, re-randomisation of credentials to support multiple unlikable revelations, and the ability to selectively disclose a subset of attributes. It is embedded into a smart contract library, that can be called from other contracts to issue credentials. The Coconut architecture is illustrated below. Any Coconut user may send a Coconut request command to a set of Coconut signing authorities; this command specifies a set of public or encrypted private attributes to be certified into the credential (1). Then, each authority answers with an issue command delivering a partial credentials (2). Any user can collect a threshold number of shares, aggregate them to form a consolidated credential, and re-randomise it (3). The use of the credential for authentication is however restricted to a user who knows the private attributes embedded in the credential—such as a private key. The user who owns the credentials can then execute the show protocol to selectively disclose attributes or statements about them (4). The showing protocol is publicly verifiable, and may be publicly recorded.

 

Implementation

We use Coconut to implement a generic smart contract library for Chainspace and one for Ethereum, performing public and private attribute issuing, aggregation, randomisation and selective disclosure. We evaluate their performance, and cost within those platforms. In addition, we design three applications using the Coconut contract library: a coin tumbler providing payment anonymity, a privacy preserving electronic petitions, and a proxy distribution system for a censorship resistance system. We implement and evaluate the first two former ones on the Chainspace platform, and provide a security and performance evaluation. We have released the Coconut white-paper, and the code is available as an open-source project on Github.

Performance

Coconut uses short and computationally efficient credentials, and efficient revelation of selected attributes and verification protocols. Each partial credentials and the consolidated credential is composed of exactly two group elements. The size of the credential remains constant, and the attribute showing and verification are O(1) in terms of both cryptographic computations and communication of cryptographic material – irrespective of the number of attributes or authorities/issuers. Our evaluation of the Coconut primitives shows very promising results. Verification takes about 10ms, while signing an attribute is 15 times faster. The latency is about 600 ms when the client aggregates partial credentials from 10 authorities distributed across the world.

Summary

Existing selective credential disclosure schemes do not provide the full set of desired properties needed to issue fully functional selective disclosure credentials without sacrificing desirable distributed trust assumptions. To fill this gap, we presented Coconut which enables selective disclosure credentials – an important privacy enhancing technology – to be embedded into modern transparent computation platforms. The paper includes an overview of the Coconut system, and the cryptographic primitives underlying Coconut; an implementation and evaluation of Coconut as a smart contract library in Chainspace and Ethereum, a sharded and a permissionless blockchain respectively; and three diverse and important application to anonymous payments, petitions and censorship resistance.

 

We have released the Coconut white-paper, and the code is available as an open-source project on GitHub.  We would be happy to receive your feedback, thoughts, and suggestions about Coconut via comments on this blog post.

The Coconut project is developed, and funded, in the context of the EU H2020 Decode project, the EPSRC Glass Houses project and the Alan Turing Institute.

Smart Contracts and Bribes

We propose smart contracts that allows a wealthy adversary to rent existing hashing power and attack Nakamoto-style consensus protocols. Our bribery smart contracts highlight:

  • The use of Ethereum’s uncle block reward to directly subsidise a bribery attack,
  • The first history-revision attack requiring no trust between the briber and bribed miners.
  • The first realisation of a Goldfinger attack, using a contract that rewards miners in one cryptocurrency (e.g. Ethereum) for reducing the utility of another cryptocurrency (e.g. Bitcoin).

This post provides an overview of the full paper (by Patrick McCorry, Alexander Hicks and Sarah Meiklejohn) which will be presented at the 5th Workshop on Bitcoin and Blockchain Research, held at this year’s Financial Cryptography and Data Security conference.

What is a bribery attack?

Fundamentally, a wealthy adversary (let’s call her Alice) wishes to manipulate the blockchain in some way. For example, by censoring transactions, revising the blockchain’s history or trying to reduce the utility of another blockchain.

But purchasing hardware up front and competing with existing miners is discouragingly expensive, and may require a Boeing or two. Instead, it may be easier and more cost-effective for Alice to temporarily rent hashing power and obtain a majority of the network’s hash rate before performing the attack.

Continue reading Smart Contracts and Bribes

Systematizing Consensus in the Age of Blockchains

We are at a crucial point in the evolution of blockchains, and the biggest hurdle in their widespread adoption is improving their performance and scalability. These properties are deeply related to the consensus protocol used—the core component of the blockchain allowing multiple nodes to agree on the data to be sealed in the chain. This week we published a pre-print of the first comprehensive systematization of blockchain consensus protocols. This blog post discusses the motivation for this study, the challenges in systematization, and a summary of the key contributions.

Consensus is an old well-studied problem in computer science. The distributed systems community has studied it for decades, and developed robust and practical protocols that can tolerate faulty and malicious nodes. However, these protocols were designed for small closed groups and cannot be directly applied to blockchains that require consensus in very large peer-to-peer open participation settings.

The Bitcoin Consensus Protocol

Bitcoin’s main innovation was to enable consensus among an open, decentralized group of nodes. This involves a leader election based on proof-of-work: all nodes attempt to find the solution to a hash puzzle and the node that wins adds the next block to the blockchain. A downside of its probabilistic leader election process, combined with performance variations in decentralized networks, is that Bitcoin offers only weak consistency. Different nodes might end up having different views of the blockchain leading to forks. Moreover, Bitcoin suffers from poor performance which cannot be fixed without fundamental redesign, and its proof-of-work consumes a huge amount of energy.

Improved Blockchain Consensus Protocols

Because of these issues, over the last few years a plethora of designs for new consensus protocols have been proposed. Some replace Bitcoin’s proof-of-work with more energy-efficient alternatives, while others modify Bitcoin’s original design for better performance. To achieve strong consistency and similar performance as mainstream payment processing systems like Visa and PayPal, another vein of work proposes to repurpose classical consensus protocols for use in blockchains. As a result of these various design proposals, the area has become too complex to see the big picture.

Systematization Challenges

To date there exists no systematic and comprehensive study of blockchain consensus protocols. Such a study is challenging because of two reasons. First, a comprehensive survey of blockchains would be incomplete without a discussion of classical consensus protocols. But the literature is vast and complex, which makes it hard to be tailored to blockchains. Second, conducting a survey of consensus protocols in blockchains has its own difficulties. Though the field is young, it is both high-volume and fast-paced. The figure above shows the number of papers published on blockchains each year since Bitcoin’s inception in 2008 (sourced from CABRA).  One might consider only accounting for work published in reputable venues, but this approach is not feasible in the case of blockchains because the bulk of the work is published in non peer-reviewed venues and as white papers for industrial platforms.

Systematization of Blockchain Consensus Protocols

To fill this gap, this week we published a pre-print of the first comprehensive systematization of blockchain consensus protocols—mapping out their evolution from the classical distributed systems use case to their application to blockchains. After first discussing key themes in classical consensus protocols, we describe: (i) protocols based on proof-of-work, (ii) proof-of-X protocols that replace proof-of-work with more energy-efficient alternatives, and (iii) hybrid protocols that are compositions or variations of classical consensus protocols. We developed a framework to evaluate their performance, security and design properties, and used it to systematize key themes in different protocol categories. This work highlighted a number of open areas and challenges related to gaps between classical consensus protocols and blockchains, security vs performance tradeoffs, incentives, and privacy. We hope that this longitudinal perspective will inspire the design of new and faster consensus protocols that can cater to varying security and privacy requirements.

Chainspace: A Sharded Smart Contracts Platform

Thanks to their resilience, integrity, and transparency properties, blockchains have gained much traction recently, with applications ranging from banking and energy sector to legal contracts and healthcare. Blockchains initially received attention as Bitcoin’s underlying technology. But for all its success as a popular cryptocurrency, Bitcoin suffers from scalability issues: with a current block size of 1MB and 10 minute inter-block interval, its throughput is capped at about 7 transactions per second, and a client that creates a transaction has to wait for about 10 minutes to confirm that it has been added to the blockchain. This is several orders of magnitude slower that what mainstream payment processing companies like Visa currently offer: transactions are confirmed within a few seconds, and have ahigh throughput of 2,000 transactions per second on average, peaking up to 56,000 transactions per second. A reparametrization of Bitcoin can somewhat assuage these issues, increasing throughput to to 27 transactions per second and 12 second latency. Smart contract platforms, such as Ethereum inherit those scalability limitations. More significant improvements, however, call for a fundamental redesign of the blockchain paradigm.

This week we published a pre-print of our new Chainspace system—a distributed ledger platform for high-integrity and transparent processing of transactions within a decentralized system. Chainspace uses smart contracts to offer extensibility, rather than catering to specific applications such as Bitcoin for a currency, or certificate transparency for certificate verification. Unlike Ethereum, Chainspace’s sharded architecture allows for a ledger linearly scalable since only the nodes concerned with the transaction have to process it. Our modest testbed of 60 cores achieves 350 transactions per second. In comparison, Bitcoin achieves a peak rate of less than 7 transactions per second for over 6k full nodes, and Ethereum currently processes 4 transactions per second (of a theoretical maximum of 25). Moreover, Chainspace is agnostic to the smart contract language, or identity infrastructure, and supports privacy features through modern zero-knowledge techniques. We have released the Chainspace whitepaper, and the code is available as an open-source project on GitHub.

System Overview

The figure above illustrates the system design of Chainspace. Chainspace is comprised of a network of infrastructure nodes that manage valid objects and ensure that only valid transactions on those objects are committed.  Let’s look at the data model of Chainspace first. An object represents a unit of data in the Chainspace system (e.g., a bank account), and is in one of the following three states: active (can be used by a transaction), locked (is being processed by an existing transaction), or inactive (was used by a previous transaction).  Objects also have a type that determines the unique identifier of the smart contract that defines them. Smart contract procedures can operate on active objects only, while inactive objects are retained just for the purposes of audit. Chainspace allows composition of smart contracts from different authors to provide ecosystem features. Each smart contract is associated with a checker to enable private processing of transactions on infrastructure nodes since checkers do not take any secret local parameters. Checkers are pure functions (i.e., deterministic, and have no side-effects) that return a boolean value.

Now, a valid transaction accepts active input objects along with other ancillary information, and generates output objects (e.g., transfers money to another bank account). To achieve high transaction throughput and low latency, Chainspace organizes nodes into shards that manage the state of objects, keep track of their validity, and record transactions aborted or committed. We implemented this using Sharded Byzantine Atomic Commit (S-BAC)—a protocol that composes existing Byzantine Fault Tolerant (BFT) agreement and atomic commit primitives in a novel way. Here is how the protocol works:

  • Intra-shard agreement. Within each shard, all honest nodes ensure that they consistently agree on accepting or rejecting a transaction.
  • Inter-shard agreement. Across shards, nodes must ensure that transactions are committed if all shards are willing to commit the transaction, and rejected (or aborted) if any shards decide to abort the transaction.

Consensus on committing (or aborting) transactions takes place in parallel across different shards. A nice property of S-BAC’s atomic commit protocol is that the entire shard—rather than a third party—acts as a coordinator. This is in contrast to other sharding-based systems with cryptocurrency application like OmniLedger or RSCoin where an untrusted client acts as the coordinator, and is incentivized to act honestly. Such incentives do not hold for a generalized platform like Chainspace where objects may have shared ownership.

Continue reading Chainspace: A Sharded Smart Contracts Platform

Creating scalable distributed ledgers for DECODE

Since the introduction of Bitcoin in 2008, blockchains have gone from a niche cryptographic novelty to a household name. Ethereum expanded the applicability of such technologies, beyond managing monetary value, to general computing with smart contracts. However, we have so far only scratched the surface of what can be done with such “Distributed Ledgers”.

The EU Horizon 2020 DECODE project aims to expand those technologies to support local economy initiatives, direct democracy, and decentralization of services, such as social networking, sharing economy, and discursive and participatory platforms. Today, these tend to be highly centralized in their architecture.

There is a fundamental contradiction between how modern services harness the work and resources of millions of users, and how they are technically implemented. The promise of the sharing economy is to coordinate people who want to provide resources with people who want to use them, for instance spare rooms in the case of Airbnb; rides in the case of Uber; spare couches of in the case of couchsurfing; and social interactions in the case of Facebook.

These services appear to be provided in a peer-to-peer, and disintermediated fashion. And, to some extent, they are less mediated at the application level thanks to their online nature. However, the technical underpinnings of those services are based on the extreme opposite design philosophy: all users technically mediate their interactions through a very centralized service, hosted on private data centres. The big internet service companies leverage their centralized position to extract value out of user or providers of services – becoming de facto monopolies in many case.

When it comes to privacy and security properties, those centralized services force users to trust them absolutely, and offer little on the way of transparency to even allow users to monitor the service practices to ground that trust. A recent example illustrating this problem was Uber, the ride sharing service, providing a different view to drivers and riders about the fare that was being paid for a ride – forcing drivers to compare what they receive with what riders pay to ensure they were getting a fair deal. Since Uber, like many other services, operate in a non-transparent manner, its functioning depends on users absolute to ensure fairness.

The lack of user control and transparency of modern online services goes beyond monetary and economic concerns. Recently, the Guardian has published the guidelines used by Facebook to moderate abusive or illegal user postings. While, moderation has a necessary social function, the exact boundaries of what constitutes abuse came into question: some forms of harms to children or holocaust denial were ignored, while material of artistic or political value has been suppressed.

Even more worryingly, the opaque algorithms being used to promote and propagate posts have been associated with creating a filter bubble effect, influencing elections, and dark adverts, only visible to particular users, are able to flout standards of fair political advertising. It is a fact of the 21st century that a key facet of the discursive process of democracy will take place on online social platforms. However, their centralized, opaque and advertising-driven form is incompatible with their function as a tool for democracy.

Finally, the revelations of Edward Snowden relating to mass surveillance, also illustrate how the technical centralization of services erodes privacy at an unprecedented scale. The NSA PRISM program coerced internet services to provide access to data on their services under a FISA warrant, not protecting the civil liberties of non-American persons. At the same time, the UPSTREAM program collected bulk information between data centres making all economic, social and political activities taking place on those services transparent to US authorities. While users struggle to understand how those services operate, governments (often foreign) have total visibility. This is a complete inversion of the principles of liberal democracy, where usually we would expect citizens to have their privacy protected, while those in position of authority and power are expected to be accountable.

The problems of accountability, transparency and privacy are social, but are also based on the fundamental centralized architecture underpinning those services. To address them, the DECODE project brings together technical, legal, social experts from academia, alongside partners from local government and industry. Together they are tasked to develop architectures that are compatible with the social values of transparency, user and community control, and privacy.

The role of UCL Computer Science, as a partner, is to provide technical options into two key technical areas: (1) the scalability of secure decentralized distributed ledgers that can support millions or billions of users while providing high-integrity and transparency to operations; (2) mechanisms for protecting user privacy despite the decentralized and transparent infrastructure. The latter may seem like an oxymoron: how can transparency and privacy be reconciled? However, thanks to advances in modern cryptography, it is possible to ensure that operations were correctly performed on a ledger, without divulging private user data – a family of techniques known as zero-knowledge.

I am particularly proud of the UCL team we have put together that is associated with this project, and strengthens considerably our existing expertise in distributed ledgers.

I will be leading and coordinating the work. I have a long standing interest, and track record, in privacy enhancing technologies and peer-to-peer computing, as well as scalable distributed ledgers – such as the RSCoin currency proposal. Shehar Bano, an expert on systems and networking, has joined us as a post-doctoral researcher after completing her thesis at Cambridge. Alberto Sonnino will be doing his thesis on distributed ledgers and privacy, as well as hardware and IoT applications related to ledgers, after completing his MSc in Information Security at UCL last year. Mustafa Al-Bassam, is also associated with the project and works on high-integrity and scalable ledger technologies, after completing his degree at Kings College London – he is funded by the Turing Institute to work on such technologies. Those join our wider team of UCL CS faculty, with research interests in distributed ledgers, including Sarah Meiklejohn, Nicolas Courtois and Tomaso Aste and their respective teams.

 

This post also appears on the DECODE project blog.

Top ten obstacles along distributed ledgers’ path to adoption

In January 2009, Bitcoin was released into the world by its pseudonymous founder, Satoshi Nakamoto. In the ensuing years, this cryptocurrency and its underlying technology, called the blockchain, have gone on a rollercoaster ride that few could have predicted at the time of its deployment. It’s been praised by governments around the world, and people have predicted that “the blockchain” will one day be like “the Internet.” It’s been banned by governments around the world, and people have declared it “adrift” and “dead.”

After years in which discussions focused entirely on Bitcoin, people began to realize the more abstract potential of the blockchain, and “next-generation” platforms such as Ethereum, Steem, and Zcash were launched. More established companies also realized the value in the more abstract properties of the blockchain — resilience, integrity, etc. — and repurposed it for their particular industries to create an even wider class of technologies called distributed ledgers, and to form industrial consortia such as R3 and Hyperledger. These more general distributed ledgers can look, to varying degrees, quite unlike blockchains, and have a somewhat clearer (or at least different) path to adoption given their association with established partners in industry.

Amidst many unknowns, what is increasingly clear is that, even if they might not end up quite like “the Internet,” distributed ledgers — in one form or another — are here to stay. Nevertheless, a long path remains from where we are now to widespread adoption and there are many important decisions to be made that will affect the security and usability of any final product. In what follows, we present the top ten obstacles along this path, and highlight in some cases both the problem and what we as a community can do (and have been doing) to address them. By necessity, many interesting aspects of distributed ledgers, both in terms of problems and solutions, have been omitted, and the focus is largely technical in nature.

10. Usability: why use distributed ledgers?

The problem, in short. What do end users actually want from distributed ledgers, if anything? In other words, distributed ledgers are being discussed as the solution to problems in many industries, but what is it that the full public verifiability (or accountability, immutability, etc.) of distributed ledgers really maps to in terms of what end users want?

9. Governance: who makes the rules?

The problem, in short. The beauty of distributed ledgers is that no one entity gets to control the decisions made by the network; in Bitcoin, e.g., coins are generated or transferred from one party to another only if a majority of the peers in the network agree on the validity of this action. While this process becomes threatened if any one peer becomes too powerful, there is a larger question looming over the operation of these decentralized networks: who gets to decide which actions are valid in the first place? The truth is that all these networks operate according to a defined set of rules, and that “who makes the rules matters at least as much as who enforces them.”

In this process of making the rules, even the most decentralized networks turn out to be heavily centralized, as recent issues in cryptocurrency governance demonstrate. These increasingly common collapses threaten to harm the value of these cryptocurrencies, and reveal the issues associated with ad-hoc forms of governance. Thus, the problem is not just that we don’t know how to govern these technologies, but that — somewhat ironically — we need more transparency around how these structures operate and who is responsible for which aspects of governance.

8. Meaningful comparisons: which is better?

The problem. Bitcoin was the first cryptocurrency to be based on the architecture we now refer to as the blockchain, but it certainly isn’t the last; there are now thousands of alternative cryptocurrencies out there, each with its own unique selling point. Ethereum offers a more expressive scripting language and maintains state, Litecoin allows for faster block creation than Bitcoin, and each new ICO (Initial Coin Offering) promises a shiny feature of its own. Looking beyond blockchains, there are numerous proposals for cryptocurrencies based on consensus protocols other than proof-of-work and proposals in non-currency-related settings, such as Certificate Transparency, R3 Corda, and Hyperledger Fabric, that still fit under the broad umbrella of distributed ledgers.

Continue reading Top ten obstacles along distributed ledgers’ path to adoption

EPFL blockchain summer school

This year EPFL hosted a Blockchain Summer School from the 21st to the 24th of June. UCL was well represented with Sarah Meiklejohn presenting two talks whilst Sarah Azouvi, Patrick McCorry, Mustafa Al-Bassam and Alexander Hicks also attended. This blog post is a joint effort from the four of us, aimed at highlighting the talks presented last week.

Patrick, Sarah, Sarah, Mustafa, Rebekah (UCL alumni) and Alex. Credit: Emin Gün Sirer

The Summer School featured talks on several aspects of blockchain technology ranging from classical distributed computing, security of smart contracts in Ethereum and proving the security of proof of work/stake. Here, we will provide a small summary for each of the talks. Slides can be found by clicking on each talk on the school’s program page.

TLS-N: Non-repudiation over TLS Enabling Ubiquitous Content Signing for Disintermediation by Arthur Gervais: Gervais’ talk highlights that a slight modification to TLS can allow a smart contract to verify the authenticity of data received from website.  Essentially, at the end of the TLS session the server signs evidence of the TLS session if requested by the client. This evidence is verified and stored by the smart contract. It is also worth mentioning that the protocol relies on redactable signatures that ensures private data isn’t revealed.

Town Crier: An Authenticated Data Feed for Smart Contracts – Ari Juels: Juel’s talk highlights that trusted execution environments can be leveraged to build authenticated data feeds. This trusted hardware communicates with the website before sending the data to the smart contract.  It is responsible for setting up a HTTPS session and fetching data from a website before sending the data to the smart contract. TownCrier is currently implemented using Intel SGX and is currently released for testing.

It is also worth mentioning that Juels beautifully provided a good definition for a smart contract:

“A smart contract is a trusted third party with public state.”

This is one of the reasons why cryptography and smart contracts are a great combination. The contract can ensure the cryptography is faithfully executed, whereas the cryptography can provide integrity and confidentiality for data used by the contract.

Continue reading EPFL blockchain summer school