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IBM Delivers Additional Protection for Blockchain

blockchain security
Illustration by Greg Mably

In November 2008, someone writing under the pseudonym Satoshi Nakamoto published the paper “Bitcoin: A Peer-to-Peer Electronic Cash System” (bitcoin.org/en/bitcoin-paper). A few months later, the first Bitcoin was successfully mined, setting a revolution in motion.

More recently, an idea took shape to deploy the technology underlying Bitcoin—loosely referred to as blockchain—to use cases other than the creation of a cryptocurrency. This is because blockchain is a mechanism for creating distributed, shared ledgers that are transparent, secure and immutable.

“Everledger on IBM Blockchain, underpinned by highly secure infrastructure, is a game changer.”
—Leanne Kemp, CEO, Everledger

Because so many of the world’s business processes rely on that age-old accounting mechanism, the ledger, a distributed ledger technology that could guarantee trust and remove friction among trading partners has the potential to radically change the way business transactions are processed in a number of industries. Read about how blockchain can and is transforming industries in “The Business of Blockchain”.

A key component to succeeding with blockchain lies in an often-misunderstood detail: security.

Technology Adjustment

Bitcoin was created and designed as an alternative to government centralization and management of fiat currency. As such, it’s a fully distributed architecture with no central oversight or single point of control. The development of Bitcoin seems to have been as much a philosophical statement as a technological one.

From a security perspective, Nakamoto’s decentralized design can’t be compromised unless an entity were to gain control of half of the more than 5,600 nodes in the Bitcoin network. No one has yet amassed the enormous amount of computing power that would be required to tamper with the currency.

It’s easy to automatically think that this strong track record of tamper-resistance for one use case is transferrable to new use cases as the underlying blockchain technology that supports the Bitcoin network is utilized to build out new, private networks and tackle more traditional business problems. But Bitcoin was designed to do one thing, and one thing only: prevent the double-spending of the cryptocurrency. The blockchain under the Bitcoin network does this by creating consensus around the order of entries in the ledger, and that’s it.

Adjusting the original blockchain technology to eliminate its reliance on cryptocurrency for driving consensus, controlling who has access to the network and managing selective encryption introduces centralized controls into an architecture that was originally built specifically to eliminate such centralization. That’s not necessarily a bad thing—the architectures being introduced as the basis of private distributed ledger technologies hold significant promise—but it does mean that special care must be taken when developing a security architecture around a private distributed ledger technology.

Steve Wilson, vice president and principal analyst, Constellation Research, wrote about this topic in “Protecting Private Distributed Ledgers: As Distributed Ledgers Evolve Beyond Bitcoin, Security Becomes More Complex and More Subtle” (ibm.co/2kwpBTl). In this report, Wilson makes a few key observations:

  • Because distributed ledger technologies require access controls, these controls (such as an identity manager) become targets that must be managed through traditional defense strategies
  • When sensitive data needs to be masked, encryption key management must not be underestimated
  • Due to the concentration of nodes in a distributed ledger technology, greater security attention is required for private blockchains than for public ones

Paul DiMarzio is a mainframe strategist with nearly 30 years experience with IBM focused on bringing new and emerging technologies to the mainframe.


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