Blockchain Technology for Next Generation .

Blockchain  technology,

which  supports  low-cost  decentralized  distributed  data  management  featuring  tamper  resistance,  high  availability,  and  transparency,  is  a  breakthrough  technology  that  will  lead  to  the  next  generation  of  information  and  communications  technology  (ICT).  Originally devised to support the Bitcoin digital currency, it is expected to be applied to a broad range of financial applications as well as in various other sectors such as distribution and sharing economies.  This broader application requires that several technical challenges including  data  privacy  protection  and  better  processing  performance  be  addressed,  and  Fujitsu  Laboratories  is  working  on  several  relevant  R&D  projects.    This  paper  introduces  blockchain  technology  and  example  applications,  describes  a  technology  for  achieving  security  in  a business context, and examines Fujitsu’s efforts in commercializing this technology and an ac-companying service as well as the open source software (OSS) project.

Introduction

“Blockchain  technology”  is  the  name  given  to the technology supporting the Bitcoin digital currency.  Traditional digital currencies are centralized in a certain mechanism to provide value to electronic data and are only  distributed  in  an  area  under  the  control  of  the mechanism.  Conversely, Bitcoin data is managed in a decentralized system.  This involves the use of a system in  which  the  value  of  the  electronic  data  is  commonly recognized by all individuals while maintaining its con-sistency.  Bitcoin was introduced as the first-ever digital currency  to  be  globally  distributed.    This  innovative  system  corresponds  to  blockchain  technology.    The  incident in which Mt. Gox, a Bitcoin exchange, lost coins belonging to customers in February 2014 did not impair the reliability of Bitcoin itself or its technology.  This is no  different  from  the  case  in  which  currency  is  stolen from  an  exchange  company  and  the  company  goes  bankrupt.  The value of the currency is not affected. This paper explains the application of blockchain technology to the Bitcoin system, information sharing, and  other  fields,  the  challenges  still  to  be  faced,  and our efforts to meet these challenges.  It also mentions our involvement in the Hyper ledger open source collaborative project.

Summary of blockchain technology

This paper initially discusses the method by which a  blockchain  works  in  the  Bitcoin  system.    A  concept  

equivalent  to  a  bank  account  in  an  ordinary  financial transaction  is  termed  an  “address”  in  the  context  of Bitcoin.  A Bitcoin transaction consists of an input and an output address and the amount of bitcoin.  A digital signature  provided  by  the  owner  of  the  input  address guarantees  that  the  transaction  corresponds  to  an  intentional act of the owner. To avoid the duplicate payment problem, a transaction is broadcast through a peer to peer (P2P) Bitcoin network,  and  its  validity  is  checked  by  all  the  participants in the network.  A set of data with a collection of legitimate transactions that are recorded every 10 minutes is termed a “block,” and a “blockchain” corresponds to a multiple number of blocks that are chronologically connected New blocks are created and managed by “miners.” A miner who constructs a block with a hash value below a certain threshold receives bitcoin as an incentive.  The miners “race” to construct blocks.  By varying the number  assigned  to  a  domain  termed  a  “nonce”  randomly,  the  hash  value  of  a  block  also  varies  randomly.    The  hash value threshold is set so that a race occurs every 10 minutes in average.  The hash value is incorporated into  the  following  block,  and  thus  it  is  not  possible  to ensure consistency when old data is modified unless all the  following  blocks  are  recalculated.    Therefore,  it  is practically  impossible  to  tamper  with  a  blockchain  Furthermore,  all  the  nodes  that  join the P2P Bitcoin network share a unique blockchain, there by simultaneously realizing high availability. Although    Bitcoin    transactions    are    managed    individually,  they  are  integrated  into  a  unique  and  consistent  blockchain  to  realize  a  shared  system  of  tamper-resistant   and   highly   available   information 

Application of blockchain technology to information sharing

The  Bitcoin  blockchain  deals  only  with  Bitcoin transactions  as  data.    However,  it  can  handle  various  other  types  of  data  in  principle.    Next,  a  case  study  is  introduced  in  which  a  blockchain  is  applied  to a  business operation as an information sharing system.  This was done in a joint verification experiment with Mizuho Bank regarding cross-border securities trading A typical cross-border securities trade takes three days  from  execution  to  settlement  due  to  the  complicated  process  involved.    This  is  because  a  long  time  period  is  required  to  confirm  settlement  instructions and  the  content  of  execution  in  each  process.    It  is  extremely  important  to  reduce  this  time  to  avoid  risks such as price fluctuation.  Previous studies investigated shortening the time by using data sharing via centralized  management  although  it  was  not  realized  due  to the high system operation and management costs. The  joint  verification  experiment  with  Mizuho Bank  established  a  system  that  recorded  a  case  of  execution  in  a  block  using  the  Open  Assets  Protocol,   All  the  participants  involved  in the transaction confirmed that it was possible to share the execution information (which evolved into tamper-resistant information) in a short period.  This indicated that the entire process could be shortened to less than one day as opposed to three days .

Additional fields of application

In addition  to  its  application  in  the financial  field, blockchain technology can be applied to a broad range of  fields,  such  as  distribution,  supply  chain  management,  document  management,  and  healthcare.    It  also  has  potential  application  to  the  sharing  economy and the Internet of Things (IoT).  The technology itself has  evolved  along  with  the  growing  range  of  application.    In  addition  to  digital  currency  (Bitcoin),  various  new   blockchain   frameworks   have   emerged,   including  Hyper ledger  Fabric  Framework,  which  is  one  of  

Hyper ledger projects  1)hosted by The Linux Foundation and Ethereum.

2) These frameworks deal with information involving more general values or rights or including a mechanism termed a “smart contract,” which enables automatic contract execution under preset conditions.Looking  at  supply  chain  management  as  an  example, we see that blockchain technology can be used to  integrate  data  (trade  records,  processing  history,  and   transportation   history)   that   are   independently   managed  by  multiple  organizations  such  as  material suppliers,  manufacturing/processing  service  providers, and distributors.  Two of the expected benefits include efficient  manufacturing  in  accordance  with  demand and  timely  recall  management  by  ensuring  that  the supply  chain  is  traceable  from  raw  material  to  retail  sale.  With respect to IoT, blockchain technology can be used  to  reduce  management  costs  by  utilizing  smart contracts in which materials are automatically ordered by the processing machine itself in accordance with the amount processed by the machine.

  Challenges of blockchain technology

The  efforts  involved  in  the  application  of  block-chain  technology  have  highlighted  several  technical  challenges.  These include the necessity of more robust security technology that enables its safe use and faster processing speed. (1)  More robust security technology Blockchain  technology  is  characterized  by  ensuring  security  through  verification  of  the  transaction information  by  all  network  participants,  thus  preventing  illegal  activity.    This  enables  an  individual  outside the blockchain to access a transaction executed within the  blockchain.    In  some  cases  for  some  applications, transaction  information  is  not  accessible  to  an  individual  unless  the  individual  is  directly  involved  in  the  transaction.  A  significant  challenge  relates  to  the method  used  for  guaranteeing  the  confidentiality  of  a transaction by using a blockchain. 2)    Faster processing speed A   blockchain   transaction   takes   more   time   to process  than  a  conventional  transaction  as  validation by  all  network  participants  is  required.    Therefore,  for those applications involving a great number of transactions, improving processing speed is a challenge. The  next  section  discusses  more  robust  security technology among these challenges.

Privacy protection

A  characteristic  of  blockchain  technology  is  that data integrity is guaranteed in a system that allows the nodes constituting the network to equally validate the same  data  by  making  the  data  open.    In  other  words,  all  the  data  stored  in  the  blockchain  are  accessible  to every participant in the blockchain network. To  realize  privacy  protection  in  a  blockchain,  encryption can be used to maintain confidentiality when information  is  made  accessible  to  certain  concerned individuals.    Information  related  to  a  secret  key  must be shared by the concerned individuals.  However, if an individual loses the key, that individual cannot decrypt the data.  Furthermore, if the key is stolen, the information  is  exposed  to  the  never  ending  risk  of  decryption  because the data in a blockchain cannot be deleted or modified.

Development of document encryption system

We   developed   a   document   encryption   system   using  blockchain  technology  and  using  a  secret  sharing  scheme  for  secret  key  management.    In  a  secret sharing  scheme,  the  secret  key  is  divided  into  several  fragments  such  that  each  concerned  party  possesses  a  unique  piece.    The  information  prior  to  the  division (secret key) can be reconstructed without collecting all the fragments because they are divided in a manner in which  a  certain  number  of  collected  fragments  can  be used to recover the secret key. shows the prototype system.  Documents  are  stored  in  the  blockchain,  and  some  of  the  data  is  encrypted  by  means  of  public  key  cryptography  such that  only  the  parties  involved  can  access  the  data.    A  private key corresponding to the public key is required to  view  the  data,  and  the  security  is  reinforced  by  the  secret sharing scheme. A  key  is  divided  into  three  pieces,  and  the  parts  are  given  to  Party  A,  Party  B,  and  the  document  creator.  The original private key is said to be reconstructed when two of the fragments are collected.  Party A and Party B can thus cooperate to view an encrypted document part. Creation  of  the  keys  and reconstruction  of  the encrypted  document  parts  are  realized  in  the  confidentiality control system .  A web interface  is  used  for  access  purposes,  and  the  following  security  measures  are  provided  in  which  each  key holder transfers his/her fragment to the control system.

• Each  key  fragment  is  encrypted  with  the  key holder’s public key.

• While decrypting the key fragment, the key holder is required to enter a personal identification number (PIN).

• The web application (including the restored information)  is  shown  in  the  browser  via  the  Secure Sockets Layer (SSL).

• The  key  fragments  decrypted  at  the  terminal  are sent  to  the  confidentiality  control  system  using  the Diffie-Hellman (DH) key agreement protocol. It  is  assumed  that  a  party  wants  to  refer  to  the  document  of  another  company.    The  encrypted  parts  of  the  document  are  made  accessible  through  a  web  browser  such  that  a  user  can  work  on  them  from  a different  office.    When  the  prototype  system  is  accessed, it initially shows the list of documents stored in the  blockchain.    Party  A  selects  one  of  the  encrypted  document  parts  and  enters  his  key  fragment  (1)  and  PIN.  The document acquired with the key fragment and the  blockchain  is  then  sent  to  the  confidentiality  control system to notify Party B.  When Party B is notified, he/she  specifies  his  key  fragment  (2)  after  examining the document that Party A wishes to access.  Once his key  fragment  (2)  is  sent  to  the  control  system,  there are sufficient fragments for decryption.  The encrypted document requested at the beginning of the process is therefore decrypted and shown in the browser of Party A. The developed   prototype   system   decrypts   the original  key  by  using  some  of  the  key fragments  (two  of the three in this case) on the basis of the secret sharing scheme.  The application of this principle provides a solution to the scenario in which a terminal containing the key is lost but the key holder’s superiors and other cooperators  help  in  restoring  the  key.    Furthermore,  a  workflow  requiring  multiple  approvals  is  realized  by considering the acquisition of a key fragment to be an approval of a request.Another    possible    countermeasure    technology against loss of the key involves examining a technology that  links  a  policy  limit  on  usage  to  a  key.    The  use  of a signed key for a transaction is defined in advance as a policy on file, and this policy is linked to the transaction  validation  key  corresponding  to  the  signature  key  at the system level.  A transaction cannot be registered in  a  blockchain  if  it  violates  the  policy  linked  to  the  transaction validation key.  The mechanism invalidates a transaction when an individual attempts to use a signature  key  that  violates  the  policy  requirements.  This  technology  enables  users  to  limit  the  recipients  and  the  maximum  amount  of  money  transmission,  which  reduces damage caused by monetary loss.

Community participation

To  maximize  the  benefits  of  blockchain  technology, it is necessary to create and mutually link various new business networks to grow them as a whole.  This requires a base that can be a de facto standard, and the utilization  of  open-source  software  (OSS)  is  an  attritive option Fujitsu   is   participating   in   Hyper ledger   hosted by  The  Linux  Foundation  as  a  premier  member  and  founder.    Hyper ledger  is  an  open  source  collaborative effort   created   to   advance   cross-industry   blockchain technologies.    Fujitsu  Laboratories  of  America  is  listed as  the  main  contact,  and  Fujitsu  Group  corporations  worldwide are involved in the project with participation from Japan, Europe, and Australia.

 Fujitsu’s architecture concept

 “FMAB,”  Fujitsu’s  architecture  concept  for  blockchain technology, was announced in October 2016.3)The  FMAB  concept  involves  the  use  of  different layers,  such  as  a  data  management  layer  for  a  blockchain and a business function layer for a business.  The layers  are  seamlessly  linked  such  that  the  blockchain  can  be  easily  used  in  an  enterprise  domain.    The Hyper ledger  Fabric  Framework  is  implemented  in  the data  management  layer  while  the  business  function layer  includes  data  access  control  and  participating  members  management  in  which  a  consortium  can  be easily  established  and  used.    These  functions  aid  in solving  privacy  issues  and  long  standing  challenges  for the technology, and they reinforce trust among the consortium participants.

 Conclusion

 This    paper    discussed    confidentiality    control technology  as  a  solution  for  business  applications  of blockchain technology and Fujitsu’s efforts to commercialize blockchain products and accompanying services by introducing the extent to which Fujitsu is involved in the OSS project. In  contrast  to  a  conventional  centralized  data management system, blockchain technology integrates data in a unique ledger while maintaining consistency although  management  is  decentralized.    Therefore, it  is  a  trailblazing  technology  for  implementing  low cost  information  management  systems  with  tamper  resistance  and  high  availability,  leading  to  next  generation  ICT.    Future  projects  will  involve  further  efforts  to expand business applications by developing various component  technologies  and  performing  verification experiments .

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