Posts

Bruce Schneier reconsiders the definition of trust in his keynote presentation from the recent Hyperledger Global Forum.

Blockchains have to be trusted in order for them to succeed, and public blockchains can cause problems you may not think about, according to Bruce Schneier, a fellow and lecturer at the Harvard Kennedy School, in his keynote address at December’s Hyperledger Global Forum on “Security, Trust and Blockchain.”

Schneier began his talk by citing a quote from Bitcoin’s anonymous developer, Satoshi Nakamoto, who said “We have proposed a system for electronic transaction without relying on trust.”

“That’s just not true,’’ Schneier said. “Bitcoin is not a system that doesn’t rely on trust.” It eliminates certain trust intermediaries, but you have to somehow trust Bitcoin, he noted. Generally speaking, the Bitcoin system changes the nature of trust.

Schneier called himself a big fan of “systems thinking,” which is what the issue boils down to, he said. This is something that is in too short supply in the tech world right now,’’ he maintained, and “we need a lot more of it.”

Trust relationships

Schneier’s talk focused on the data structures and protocols that make up a public blockchain. He called private blockchains “100 percent uninteresting,” explaining that they’re easy to create and secure, they don’t need any special properties, and they’ve been around for years.

Public blockchains are what’s new, he noted. They have three elements that make them work:

  • The ledger, which is the record of what happened and in what order
  • The consensus algorithm, which ensures all copies of the ledger are the same
  • The token, which is the currency

All the pieces fit together as a single system, and whether they can achieve anything gets back to the issue of trust, he said.

When he reads some of the comments of blockchain enthusiasts, such as “in code we trust,” “in math we trust,” and “in crypto we trust,” Schneier believes they have “an unnaturally narrow definition of trust.”

Trust as a verification mechanism is true, but you cannot replace trust with verification, he stated. For example, Schneier recounted waking up in his hotel room and trusting that the keys worked, naturally trusting the people who prepared his breakfast, and trusting that all the people he encountered on his way to the forum would not attack him.

“Trust is essential to society,’’ he said. “Humans as a species, are very trusting.” And, he continued, “The fact that we don’t think about it most of the time is a measure that trust works.”

Trust architectures

Schneier cited the book, Blockchain and The New Architecture of Trust, by Kevin Werbach, in which the author outlines the following four different trust architectures:

  • Peer-to-peer trust
  • Leviathan trust, which is institutional and involves contracts
  • Intermediary trust, like PayPal or credit cards that make a transaction work
  • Distributed trust, which is what blockchain enables — an emergent trust in the system without any individuals in the system trusting each other

“Blockchain shifts trust in people and institutions to trust in technology,” Schneier said. This means having to trust the cryptography, the software, the computers, the network, and the people who are making all of this work, he said. Along the way there are a lot of single points of failure, and if a blockchain gets hacked or you forget your credentials, you lose your money.

It comes down to the question of who you would rather trust: a human legal system or the details of computer code? Schneier said that, in a lot of ways, trusting technology is a lot harder than trusting people. Institutional trust is still needed, he said, because you still need people to be responsible for these systems.

Bitcoin might theoretically be based on distributed trust, “but practically, that’s just not true.” You have to trust the wallets and the exchanges, and there’s not many of either, as well as the software and the operating systems and computers that everything the blockchain runs on, he said.

“If you think about the attacks on bitcoin, this is where they are – they don’t go against the math, they go against the computer science.” There is always a need for governance outside the system, and a need to override the rules and make changes when necessary, he stressed.

Blockchain systems will always have to exist with other more conventional systems and Bitcoin will always need to interoperate with the rest of the financial world, he said. “That interface, with its laws and norms, often requires breaking the trust architecture of the blockchain system.” This means you can’t have a Bitcoin system where transactions clear immediately work with a credit card system where transactions clear in three days, he said.

A key feature of trust is that if the transaction goes bad or if your credentials are stolen, you get your money back, Schneier said. At the same time, trust is expensive. The reason people don’t use Bitcoin is because they don’t trust it, not because of the cryptography or the protocols, he maintained.

Human element

“A currency that is volatile is not particularly trustworthy,’’ he said. “That’s the human way of looking at trust.” Ethereum is an interesting example of how trust is working. “The fact that we have hard forks means we still need trusted people. This trust is a lot more complicated than transaction verification.” People will choose Bitcoin and an exchange or wallet based on reputation, he said, whether it’s something they read or a recommendation from a friend.

He concluded his talk by noting that trust is much more social; a human thing.

“So truly understanding this requires systems thinking. I really want everybody who designs and implements blockchains to understand the systems they’re working in,” Schneier said, not just the technology aspect, but the social parts and how they work. He suggested people start by asking whether they need a public blockchain?

“I think the answer is almost certainly no, and by this I’m answering the security question, not the marketing question,’’ he said. “Blockchains likely don’t solve the security problems you think they solve,” and they cause other problems you don’t think about, like inefficiencies, especially scaling. Schneier said there are almost always simpler and better ways to achieve the same security properties.

He advised the audience to look at the trust architecture and whether the blockchain “will change it in any meaningful way or does it just shift it around to no real effect?” He also asked them to think about whether the blockchain replaces trust verification and what aspects of trust does it try to fix and fail?

“Does it strengthen existing trust relationships, or does it go against them? Are the trust intermediaries of the new architecture better or worse than the old arch? How can trust be abused in the new system?” he said. “Is it better or worse than the old system and, lastly, what would the same system look like if it didn’t use blockchain?”

In most cases, Schneier said, his guess is that people will choose solutions that don’t use public blockchains because of all the problems they bring. “I’m not saying that they’re useless,” he added, “but I have yet to find an example where the things they do are worth the problems they bring.”

Watch the entire presentation below:

Other session recordings can be found on the Hyperledger YouTube channel.

Hyperledger Global Forum

Collaborate, connect, and advance your blockchain skills at Hyperledger Global Forum next month.

With over 75 sessions, keynotes, hands-on technical workshops, social activities, evening events, and more, Hyperledger Global Forum gives you a unique opportunity to collaborate with the Hyperledger community, make new connections, learn about the latest production deployments, and further advance your blockchain skills. In addition to previously announced keynote speakers, new keynote speakers include:

  • Frank Yiannas, Vice President of Food Safety, Walmart
  • David Treat, Managing Director, Accenture

Session Highlights Include:

Technical Track:

  • Approaches to Consortia Governance and Access Control in Hyperledger Fabric Applications – Mark Rakhmilevich, Oracle
  • Chaincode Best Practices – Sheehan Anderson, State Street
  • Lessons Learned Creating a Usable, Real-world Web Application using Fabric/Composer – Waleed El Sayed & Markus Stauffiger, 4eyes GmbH

Innovation Theater Track:

  • MyCuID: Blockchains, Credentials and Credit Unions – Julie Esser, CULedger
  • Live Demo of Omnitude ID Utilizing Hyperledger Indy, Fabric, and Sovrin – James Worthington, Omnitude
  • Giving Money Identity and Purpose – Raj Cherla, Spoole Systems Pvt Ltd

Business Track:

  • Panel Discussion: Hyperledger in Supply Chains – Kari Korpela, Lappeenranta University of Technology; Petr Novotny, IBM Research; Yu Zhang, Huawei and moderated by Allison Clift-Jennings, Filament
  • Panel Discussion: Where Are We Now with Identity? – Daniel Haudenschild, Swisscom Blockchain AG; James Worthington, Omnitude and moderated by Heather Dahl, The Sovrin Foundation
  • Financial Inclusion: How DLT Provides Hope For 1.7 Billion Unbanked People – Matthew Davie, Kiva

Take a look at the full schedule!

Secure your spot now and save up to $150 with the current registration rate, available through November 25.  Register now >>

This post originally appeared on the Hyperledger website.

Hyperledger

A recent webinar, Get Involved: How to Get Started with Hyperledger Projects, focuses particularly on making Hyperledger projects more approachable.

Few technology trends have as much momentum as blockchain — which is now impacting industries from banking to healthcare. The Linux Foundation’s Hyperledger Project is helping drive this momentum as well as providing leadership around this complex technology, and many people are interested in getting involved. In fact, Hyperledger nearly doubled its membership in 2017 and recently added Deutsche Bank as a new member.  

A recent webinar, Get Involved: How to Get Started with Hyperledger Projects, focuses particularly on making Hyperledger projects more approachable. The free webinar is now available online and is hosted by David Boswell, Director of Ecosystem at Hyperledger and Tracy Kuhrt, Community Architect.

Hyperledger Fabric, Sawtooth, and Iroha

Hyperledger currently consists of 10 open source projects, seven that are in incubation and three that have graduated to active status.  “The three active projects are Hyperledger Fabric, Hyperledger Sawtooth, and Hyperledger Iroha,” said Boswell.

Fabric is a platform for distributed ledger solutions, underpinned by a modular architecture. “One of the major features that Hyperledger Fabric has is a concept called channels. Channels are a private sub-network of communication between two or more specific network members for the purpose of conducting private and confidential transactions.”

According to the website, Hyperledger Iroha is designed to be easy to incorporate into infrastructural projects requiring distributed ledger technology. It features simple construction, with emphasis on mobile application development.

Hyperledger Sawtooth is a modular platform for building, deploying, and running distributed ledgers, and you can find out more about it in this post.  One of the main attractions Sawtooth offers is “dynamic consensus.”

“This allows you to change the consensus mechanism that’s being used on the fly via a transaction, and this transaction, like other transactions, gets stored on the blockchain,” said Boswell. “With Hyperledger Sawtooth, there are ways to explicitly let the network know that you are making changes to the same piece of information across multiple transactions. By being able to provide this explicit knowledge, users are able to update the same piece of information within the same block.”

Sawtooth can also facilitate smart contracts. “You can write your smart contract in a number of different languages, including C++ JavaScript, Go, Java, and Python,” said Boswell. Demonstrations and resources for Sawtooth are available here:

How to contribute to Hyperledger projects

In the webinar, Kuhrt and Boswell explain how you can contribute to Hyperledger projects. “All of our working groups are open to anyone that wants to participate, including the training and education working group,” said Kuhrt. “This particular working group meets on a biweekly basis and is currently working to determine where it can have the greatest impact. I think this is really a great place to get in at the start of something happening.”

What are the first steps if you want to make actual project contributions? “The first step is to explore the contributing guide for a project,” said Kuhrt. “All open source projects have a document at the root of their source directory called contributing, and these guides are really to help you find information about how you’d file a bug, what kind of coding standards are followed by the project, where to find the code, where to look for issues that you might start working with, and requirements for pull requests.”

Now is a great time to learn about Hyperledger and blockchain technology, and you can find out more in the next webinar coming up May 31:

Blockchain and the enterprise. But what about security?

Date: Thursday, May 31, 2018
Time: 10:00 AM Pacific Daylight Time

This talk will leave you with understanding how Blockchain does, and does not, change the security requirements for your enterprise. Sign up now!

Submit to Speak at Hyperledger Global Forum

Hyperledger Global Forum will offer the unique opportunity for more than 1,200 users and contributors of Hyperledger projects from across the globe to meet, align, plan, and hack together in-person. Share your expertise and speak at Hyperledger Global Forum! We are accepting proposals through Sunday, July 1, 2018. Submit Now >>