Blockchain latest news: a state-owned quantum computer could break blockchains in as little as three years

John Leonard
clock • 1 hour 17 min read

Whichever government first produces a working device that can crack public key encryption will be 'master of the world'

Jamie Burke is founder and CEO of Outlier Ventures, an incubator and investor in decentralised, AI and IoT technologies.

Outlier is building a portfolio of startups to create what it calls a ‘convergence stack', ranging from the hardware layer, through distribution, routing, verification, interfacing and up to applications. Projects funded so far include Fetch.AI, Agoric, IOTA, Sovrin, Haja Networks, SEED and Ocean Protocol.

This stack is designed to form a viable basis for the next-generation web. Web 3 will be characterised by bots trading with bots and intelligent agents making economic decisions based on smart contracts, with human interaction playing an ever smaller part. It will also be decentralised to mitigate the worst aspects of the current web, such as surveillance capitalism, the easy spread of disinformation and the growing number of malicious bots.

Part of the blame for the current online malaise must be laid at the door of creators of the internet and web which for reasons of expediency and ideology had very little governance built in, according to Burke.

"It was designed very much with a kind of libertarian free market capitalism framing, and we're dealing with the consequences today," he said.

"We're now in a place where we have surveillance capitalism as a consequence, with a huge gap left open for stateless corporations to exploit that niche to the detriment to society."

At least one of those originators is well aware of these issues. Tim Berners-Lee has long railed against the fencing off of the web by corporations and their government sponsors. Indeed, he is working on Solid, a project designed to allow individuals to manage their personal data and that resulting from their online interactions in their own stores, outside of the corporate walled gardens. Solid was launched with some fanfare last year by Berners-Lee and Inrupt, a startup created to commercialise the project.

However, says Burke, it's missing a trick.

The key innovation of bitcoin was the idea of digital scarcity, he believes, the use of cryptography to give value to a digital asset on a network and control its distribution. Digital scarcity allows such assets to be spent and traded online like a currency as cryptotokens - and can also be used to exact a cost on those who would attack or abuse the network.

"I find it quite intriguing is he is deliberately not tokenised anything," he said. "I hate to say this about the Godfather of the Web, but there still seems to be a lot of naivety and dogma that is driving the decisions."

Burke continued: "My view of Web 3 is that with the innovation of digital scarcity we can make machines not just read the web but also have economic agency. And so that's why tokenisation is important because to facilitate economic agency by machines there needs to be a digital form of value that is scarce that can be transferred.

"I don't think everything has to be tokenised. But when I think about what he's trying to achieve, if it's not tokenised then what is the cost to abusing it?

"We now have the ability to hard-code cost into the internet, but I think there's just this resistance, this idea that the internet should be totally free. I don't think it should be totally free; I think it should be almost to the point of free, but with a cost whereby bad activity at scale isn't worth the reward."

The lack of built-in disincentives for malicious behaviour risks replicating the past, or worse he added.

"The reason why there's such a high volume of malicious activity is because there's no cost to it, or at least the cost of doing it at scale is negligible because the web doesn't really have any rules."

Watch out for a longer interview with Burke and others involved with decentralised technologies to appear shortly, in which they explore some of the promises and challenges of Web 3.0.

20/05/2019 Bluzelle takes aim at Redis with its decentralised cache network

Decentralised database-as-a-service startup Bluzelle has released an early iteration of its decentralised database as a globally distributed cache.

The fully operational decentralised, in-memory, NoSQL key-value store is planned for early 2020, but, explained CEO Pavel Bains, with the caching layer in place Bluzelle can already provide global access to data at extremely low latency for applications such as online multiplayer gaming, ecommerce and ad bidding.

Currently in beta and installed on 25 globally dispersed datacentre servers, the Bluzelle network replicates data across its nodes with a high level of redundancy, so it's always close to where it's needed. As a potential use case, Bains gave a hypothetical example of an online gaming firm based in Seattle where suddenly a large number of players join from India and then the UK. Instead of urgently having to provision extra servers and cache in those locations to void unacceptable lag, the data would already be nearby on the network and extra resources provisioned instantly. This is similar to the way content delivery networks (CDNs) like Akamai and Cloudflare work, and Bains dubbed Bluzelle cache a 'DDN' - or data delivery network.

A live, load-testing demonstration by Bains appeared to show response times between the US West Coast and Singapore of 19 milliseconds using the Bluzelle network compared to more than 700 milliseconds going through a datacentre fitted with Redis cache located on the US East Coast. (The firm publishes a video of this same demo on its website.)

The Bluzelle network is based on a Kademlia distributed hash table (DHT) architecture with a blockchain (ethereum) to manage identity, smart contracts and token payments. Storage networks Sia and Storj have a similar setup, but Bains insisted they are working in a different area.

"Sia and Storj are more focused on file storage, whereas our target customers are those who require real-time data access across multiple regions, so the competition would be Redis and Couchbase," he said.

Ultimately, as with those storage networks, the datacentre servers will be replaced by users' machines with their owners rewarded for donating spare capacity. According to Bains, any standard laptop with 50GB of storage and "a few gigs of RAM" should suffice. It remains to be seen what effect that will have on latency, of course. The full database, once released, should allow for CRUD (create, read, update, delete) operations and protection against common attacks, according to the company's whitepaper (PDF).

13/05/2019  Microsoft's blockchain-based decentralised identity system unveiled

Microsoft is working an open-source, blockchain-based decentralised identitity system.

Decentralised IDs (DIDs) are a cryptographic means by which people can identify themselves to an online service while remaining in full control of their credentials and without requiring a centralised registry, identity provider or certificate authority.

Microsoft's project is called ION. Its GitHub page describes it as "public, permissionless, Decentralised Identifier (DID) network that implements the blockchain-agnostic Sidetree protocol on top of bitcoin."

It continues: "By leveraging the blockchain-agnostic Sidetree protocol, ION makes it possible to anchor tens of thousands of DID/PKI operations on a target chain (in ION's case, bitcoin) using a single on-chain transaction. "

Yorke Rhodes, a programme manager on Microsoft's blockchain engineering team, told CoinDesk that his team has been working on ways to make use of the secure inmmutibility of blockchains like bitcoin and ethereum while overcoming some of their scalability problems.

"To have Microsoft say they are not scared of bitcoin, and in fact, it has some very good properties and we are willing to take advantage of those properties, is, I think, a step in the right direction," Rhodes said, adding that the DIDs could be used alongside Active Directory, Microsoft's system for managing identities within an enterprise setting. DIDs could thus be used across the very wide range of Microsoft enterprise services and beyond, allowing authentication and verification while leaving the user in control of their identity.

Microsoft has been interested in this area for some time. In January 2018, the company published a decentralised identity portal and promoted the benefits of individuals being able to create, own and manage their online identities independent of any third-party. The company is also a founding member of the World Wide Web Consortium (W3C) working group for decentralised identity.

In the CoinDesk article, Rhodes likened the possible impact of ION on decentralised technologies and self-sovereign identity to that of Windows 95 on consumer computing. "Networking stacks were very tied to logins to existing networks," Rhodes said, describing how IDs were managed in the pre-internet era. "Like that, I think [ION] is pretty significant."

03/04/2019 Blockchain not dead as Facebook and PayPal announce further investments

No doubt about it, last year blockchain hopes crashed down to earth with an almighty bang. Closely tied up with get-rich-quick cryptocurrency schemes (and scams), when that market lost 75 per cent of its value blockchain lost a lot of its lustre, with some analysts and pundits writing it off altogether. It was too much too soon, they said.

But now that the balloon has popped a welcome pragmatism has taken place of all the guff and bluster, with many decentralised projects (those that are still solvent) and companies just quietly getting on with it.

Two high-profile companies have announced they'd be investing more in blockchain technologies over the past few days. First, PayPal made its first blockchain investment in the shape of Cambridge Blockchain Inc, a digital identity enterprise software provider. PayPal joined other investors including Foxconn and Omidyar Network in the extended investment round.

Meanwhile, Facebook, which is working on a cryptocurrency of its own and has been poaching high-profile blockchain researchers, posted an additional five Silicon Valley blockchain vacancies on top of the 20 it had advertised earlier.

And recruitment site revealed that US bank JPMorgan Chase (which announced its own digital currency in February, see below) was behind only technology and consultancy firms IBM and Cisco, Accenture, EY, KPMG and Deloitte in its snapping up of blockchain talent, according to Forbes - although thenews site did say interest from applicants had dropped in line with the bitcoin price.

While venture capital investment on blockchain startups is unlikely to reach the $5.5 bn of the bubble year of 2018, it looks set to match or exceed 2017's $1 bn.

In some cases this will be about keeping a hand in, in case of some big development - or fear of missing out (FOMO). In others (maybe Facebook's), covering bases may be mixed with a large dollop of PR. However, with much of the hype behind it and the technology maturing, there's certainly life in the old dog yet. Coincidentally, for reasons that are as yet unclear, the price of Bitcoin surged 15 per cent on Tuesday.

The AI and Machine Learning Awards are coming! In July this year, Computing will be recognising the best work in AI and machine learning across the UK. Do you have research or a project that you think deserves wider recognition? Enter the awards today - entry is free. 

13/03/2019 Energy firm Ovo invests in blockchain startup Electron in move towards zero-carbon smart grid

As covered by our sister publication Business Green, UK energy supplier Ovo has taken a minority stake in blockchain company Electron in a bid to accelerate the development of a smart electricity grid.

London-based Electron develops blockchain solutions specificially for the energy sector.

The terms of the deal were not disclosed, but Ovo, which focuses on supplying energy from renewable sources, said that the investment comes through Kaluza, a new division within the Ovo that develops "software and hardware to support the integration of electric vehicles, electric heating and battery storage onto the grid."

In a blog post Ovo explained the strategy further.

"The integration of technologies such as blockchain and IoT, is essential to support the transition to a highly distributed, complex energy system, made up of multi-agents and millions of connected devices. The development of Electron's shared asset register will be crucial to supporting the growth of Kaluza and deliver on its mission to securely connect all devices to an intelligent zero-carbon grid," the company said.

A smart grid could to allow people to buy solar power from their neighbours and enable domestic appliances to exchange information and co-ordinate electricity use.

The move follows Mitsubishi's acquisition of a 20 per cent stake in Ovo last month.

Bank JP Morgan bets on blockchain, unveils its own digital currency

 Jamie Dimon, CEO of Wall Street investment bank JP Morgan, has spent an inordinate amount of time bashing bitcoin and banning employees from trading in cryptocurrencies. But now the bank has announced it's been testing its own digital (not crypto-) currency for use in its wholesale payments business.

The digital currency is called the JPM Coin and has been trialled so far with one corporate client. It is pegged 1:1 against the US dollar, in the manner of so called stablecoins such as tether, and is instantly redeemable against that currency. There are plans to deploy it against other fiat currencies too.

The bank envisages three main uses for the JPM coin. The first is to offer corporate clients a real-time alternative to money transfer systems like Swift and wire transfers. Transfers can take hours or even days, whereas a trusted blockchain-based digital currency could allow the process to be virtually instantaneous.

Another is for securities transactions, reducing the time between settling the transaction and money changing hands. Again, wire transfers can introduce a significant delay.

The third use-case is to allow corporations that use J.P Morgan's treasury services to replace the dollars they hold in subsidiaries across the world with JPM Coin.

These use cases are just the start, said Umar Farooq, head of the bank's blockchain projects.

"So anything that currently exists in the world, as that moves onto the blockchain, this would be the payment leg for that transaction," Farooq said on the bank's website.

"The applications are frankly quite endless; anything where you have a distributed ledger which involves corporations or institutions can use this."

Farooq drew a distinction between the cryptocurrency markets and the sort of private blockchain applications represented by JPM Coin.

"We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated," he said.

"As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators."

The pilot programme will be expanded later this year to include other corporate clients.

JP Morgan has also been involved in a consorteum developing the Ethereum-based Quorum blockchain. See earlier in this blog.

Next page: Facebook's crypto rumours, WWF-Australia launches food-tracking blockchain, China cracks down, Ethereum Classic hacked, New standards group for private blockchains, Hyperledger adds members, Blockchain too immature for government use, finds Australia, China mulls anonymity ban 

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