Our rundown of the ups, downs and long-term future of decentralised and distributed ledger technologies.
17 January 2019 WWF-Australia launches food-tracking blockchain
World Wildlife Fund Australia has launched a ‘blockchain-enabled' tracking system to trace food and other products from source to plate.
The aim, WFF-Australia says, is to "help businesses and consumers avoid illegal, environmentally damaging or unethical products, while improving supply chain accountability and transparency."
The system, called OpenSC, was developed in conjunction with BCC Digital Ventures, part of the Boston Consulting Group. It allows details of products to be added to a ledger at their point of origin so the route to their final destination can be traced. For example, the location and time at which a particular fish is caught can be recorded using a digital tag by the fishing boat, allowing consumers to check it has reallly come from a MSC-certified fishery simply by scanning a QR code using their phone.
Austral Fisheries, part of the enormous Maruha Nichiro Group, has agreed to roll out the system across its Patagonian Toothfish fleet.
The system is not limited to seafood of course. WWF-Australia plans to use it to certify other food and paper products to demonstrate that they are not the result of illegally felled forests or slave labour.
"Through OpenSC, we will have a whole new level of transparency about whether the food we eat is contributing to environmental degradation of habitats and species, as well as social injustice and human rights issues such as slavery," said WWF-Australia CEO, Dermot O'Gorman, in a press release.
"OpenSC will revolutionise how we all buy food and other products as well, enabling more informed decision making by consumers, businesses, governments, and industry bodies."
Improving supply chain transparency is one of the leading use cases for blockchain technology outside of the realm of cryptocurrencies. Recently, the Food Trust, a consortium led by Walmart, created a product recall system which allows products to be traced through the supply chain back to their origin in a matter of seconds rather than weeks (see earlier in this blog).
Fedex is another company looking at decentralised ledgers as a way of driving efficiencies in the supply chain. CEO Fred Smith described blockchain as "a chain of custody system on steroids".
11/01/2019 China cracks down on blockchain companies
Hot on the heels of handing out fines to VPN users accessing the 'international internet', China continues its crackdown on the anonymity of its citizens by targeting the country's many blockchain startups.
The Cyberspace Administration of China (CAC) has announced new rules for blockchain firms. These rules, which will come into force on February 15, will require companies that use blockchains to register their names and IP addresses with the CAC within 10 working days of the new regulations becoming law.
It applies to firms that provide public information services through blockchain services that are accessible via web or mobile devices.
Moreover, blockchain service providers may not 'produce, duplicate, publish or disseminate' content that has been banned by the Chinese government.
Firms that fail to comply could face fines of RMB 20,000 - 30,000 (£2,300 - £3,500), while serial offenders should expect a criminal investigation.
The move is the latest in an ongoing crackdown on online freedom of expression by the increasingly authoritarian Chinese authorities. Last year a group of students used the Ethereum blockchain to evade the attention of the censors and pass messages about a prominent professor accused of sexual misconduct, and this may have rattled government officials, themselves very sensitive to accusations of corruption.
In October the Chinese government drafted a regulation that would require users to provide their real names and national ID card numbers when registering for a blockchain service. The policy also demands that blockchain services remove 'illegal information' before it can be spread among users, with service providers required to retain backups of user data for six months and to hand it over to the police on request.
China also banned cryptocurrency trading last year.
08/01/2019 Rollback attack allows double-spend of more than $1m in cryptocurrency Ethereum Classic
Blockchains are supposed to be immutable. That's the point. With a blockchain-based cryptocurrency you shouldn't be able to spend the same coin twice by rewriting the transactional record, but Cryptocurrency exchange Coinbase noticed one currency, Ethereum Classic (ETC), where exactly that was occurring.
"On 1/5/2019, Coinbase detected a deep chain reorganisation of the Ethereum Classic blockchain that included a double spend," the exchange notes in its blog.
It continues: "Subsequent to this event, we detected 12 additional reorganisations that included double spends, totalling 219,500 ETC (~$1.1m)."
This latter figure was revised upwards from an earlier estimate of 88,500 ETC ($460,000).
The problem lies with a weakness in the Proof of Work consensus mechanism which most blockchains rely on for security. In this miners compete to verify blocks of transactions, ultimately agreeing to accept the longest chain of blocks as the 'true' one and going on from there. This is fine so long as more than half the miners are ‘honest' nodes. But if a dishonest miner with sufficient CPU power manages to pick a previous block and build on that, it can theoretically outstrip the other miners, creating an alternative longest chain which the other nodes will ultimately accept as true, effectively rewriting history.
So the dishonest miner could make a purchase from a merchant with his or her coins, and then build a chain from a previous block which does not contain that transaction. Once the other miners have accepted this new chain as the canonical truth, the coins are still available to spend again. The unfortunate merchant ends up with nothing.
This is known as a rollback attack because the previous transaction has effectively been rolled back - it does not exist in the record. It becomes possible once a single miner or cooperating pool of miners controls more than 50 per cent of the CPU power. The risk has been known since blockchain's inception and is the reason why it has always been stressed that mining should be as dispersed as possible. However, because specialised equipment and cheap electricity is now required to make a living from mining, power has become concentrated in fewer and fewer hands.
To make matters worse, with the collapse in the price of cryptocurrencies (ETC's value has dropped from $45 a year ago to around $5 today) many miners have given up and sold their equipment. This may have allowed some of the remaining miners to consolidate enough power to launch the attack.
Coinbase says no funds were lost from the exchange, but it has frozen transactions for the time being in ETC to prevent losses from affecting its customers.
20/12/2018 New standards group for private blockchains announced by ETSI
ETSI, the European standards group for IT, has announced a new group focused on permissioned ledgers - or private blockchains as they are often called. Members of the Industry Specification Group on Permissioned Distributed Ledger (ISG PDL) announced so far include representatives from Cadzow Comm Consulting Ltd, Ericsson, Huawei, Intel, NEC Europe, Telefónica and Vodafone.
The group will look at existing methodologies used to validate participant nodes, improve scale and throughput, achieve consensus and automate node management and operation, incorporating new research results as they become available. The aim is to specify a permissioned distributed ledger operational reference architecture that can be used as a basis for implementing private blockchains for business purposes.
Unlike public blockchains such as bitcoin where anyone can run a node, with permissioned blockchains membership is restricted. Current use cases include inter-bank ledgers where each bank in a consortium runs a node or nodes. In this way security and confidentiality are easier to provide for, while some of the 'trustlessness' aspects of a decentralised public ledger are lost. Instead governance of the ledger is the joint responsibility of its members.
ISG PDL will seek to provide the foundations for operating permissioned distributed ledgers across various industries and governmental institutions by working with various standards bodies and open source projects in the blockchain arena.
The groups initial meeting will take place on 24 January at Telefónica, Madrid where officials will be elected.
18/12/2018 Is Facebook working on a cryptocurrency?
Facebook has been quietly assembling a group of experts, academics, cryptographers and engineers with experience in blockchain and cryptocurrencies, according to a report from Cheddar.com.
The group was inaugurated in April this year and reportedly now numbers 30 or 40 individuals. It is headed by David Marcus, vice president of Facebook Messenger and former PayPal president. Many of his recent hires are also ex-employees of PayPal while others have online payments backgrounds from companies like Google and Samsung. Some are former members of cryptocurrency startups - stoking the long-running rumour that Facebook may be developing its own coin.
Facebook has said little about cryptocurrencies, save to ban ads for ICOs a while back, and it remains characteristically tight-lipped about its plans.
"Like many other companies Facebook is exploring ways to leverage the power of blockchain technology," a spokesperson said. "This new small team is exploring many different applications. We don't have anything further to share."
It could be that Facebook is looking to emulate China's WeChat - a sort of Facebook plus-plus that includes a dating app together with a native payment system that has become so popular that small traders and even beggars are starting to refuse cash - while at the same time working to head off competition from less centralised models down the line.
13/12/2018 Hyperledger adds 12 new members
Hyperledger, the open source permissioned blockchain project, has announced 12 new general members including some major banks, consortia and cloud firms. General members have certain marketing and recruitment opportunities as well as bing able to participate in members-only committees.
The latest general members feature a strong showing from China. They are: Alibaba Cloud, BlockDao (Hangzhou) Information Technology, Citi, Deutsche Telekom, Guangzhishu (Beijing) Technology Co. Ltd, Guangzhou Technology Innovation Space Information Technology Co. Ltd, KEB Hana Bank, HealthVerity, MediConCen, Techrock, we.trade and Xooa. These additions bring the total number of general members to 256.
Four new associate members also joined Hyperledger this month: Association of Blockchain Developers of Saint Petersburg, Business School of Hunan University, Sun Yat-sun University and Wall Street Blockchain Alliance.
Associate membership is limited to pre-approved non-profits, open source projects, and government entities. There are now 16 associate members.
The new members were announced at the Hyperledger Global Forum in Basel, Switzerland.
"The growing Hyperledger community reflects the increasing importance of open source efforts to build enterprise blockchain technologies across industries and markets," said executive director Brian Behlendorf. "The latest members showcase the widening interest in and impact of DLT and Hyperledger."
A number of blockchain projects are based on Hyperledger; some of them like we.trade and the Walmart food supply chain system are featured elsewhere in this blog.
23/10/2018 Blockchain too immature for government use, finds Australia's DTA
The Australian government's Digital Transformation Agency has cast doubts over the validity of blockchains for governmental purposes.
The DTA, which was granted AUS$700,000 to investigate the technology, has concluded after initial research that in almost every case examined existing technologies are more suitable than blockchain.
The agency has been working with a number of government agencies to develop prototypes for the use of blockchain to deliver services, including with the Department of Human Services for welfare payments and cargo settlement.
Peter Alexander, CDO at the DTA said the technology is worth keeping an eye on but as yet is too immature.
"Our position today, and this is an early write-up, is that blockchain is an interesting technology that would be well worth being observed, but without standardisation and a lot more work, for every use of blockchain that you would consider today there is a better technology," Alexander told a Senate hearing on Tuesday, as reported by InnovationAus.com.
Alexander said that one of the defining features of blockchains, the potential for anonymity, is among the biggest stumbling blocks.
"Generally speaking when the government is engaging with someone, we want to have a trusted relationship with them. We want to know who they are and give them a personalised service," he said. "Blockchain is good for low-trust engagement, you don't know who you're dealing with but have a series of ledgers that can give some validation and support."
According to Alexander, blockchain is at the "top of the hype cycle", with demand driven by the industry.
"It would be fair to say that a lot of the big vendors are pushing blockchain very hard and internationally most of the hype around blockchain is coming from vendors and companies, not from governments and users and deliverers of services," he said.
23/10/2018 China mulls anonymity ban
China is another nation that finds blockchain's anonymity a problem. Earlier this year Chinese students encoded allegations of sexual harassment against a prominent professor on the Ethereum blockchain to evade the country's censors, all social media posts on the issue having been blocked. The same technique was used to spread news about low quality and counterfeit vaccines, another scandal the government sought to cover up.
But the Chinese government has drafted a new regulation that would require users to provide their real names and national ID card numbers when registering for a blockchain service, reports The Verge. The policy would also demand that blockchain services remove 'illegal information' before it can be spread among users. And under the proposed legislation, service providers would also be required to retain backups of user data for six months and to hand it over to the police on request.
China has been bullish on blockchain for the last few months, with one commentator recently claiming it is worth ten times as much as the internet. The country's tech giants are pouring significant resources into its development citing smoother trade and anti-fraud possibilities. But without the possibility of anonymity, a permanent ledger could also be a powerful tool in the authoritarian regime's surveillance and control systems.
China also banned cryptocurrency trading earlier this year, although apparently this has been less than effective. The Ethereum Hotel recently opened in the country, accepting payment in cryptocurrencies.
Next page: UK leads in blockchain deployments says Capgemini; Microsoft's strategy for decentralised identity; Gary Cohn joins fintech startup Spring Labs; Horizen's privacy platform; Zone and Icons launch ledger to authenticate and track sports memorabilia; Nick Szabo, inventor of the smart contract, on its evolution; Real-world use cases emerging; Blockchain-based driving licence trial rolled out by Australian state
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