Is Blockchain Secure?

The security of personal data, especially that which is stored online, is a human right. It has failed to evolve and actually been deteriorating in recent years. Blockchain technology has the potential to entirely change this.

All of our data is stored online. We concede some of our most private information to the platforms that we use on a daily basis and we are often unaware which of our personal data is collected. Many users still conceal some of their most valuable data behind the shockingly weak combination of a username and password, with over half of users openly admitting they use the same password for all of their logins.

Is Blockchain Secure?

Yes, blockchain is innately secure. It utilises powerful cryptography to give individuals ownership of an address and the cryptoassets associated with it, through a combination of public and private keys, made up of combinations of random numbers and letter. This solves the issue of stolen identity as addresses are not directly associated with users’ identity, whilst also being far harder to compromise. Private keys are even more secure as they are considerably longer. It is in this way that blockchain offers a greater level of security to the individual user as it removes the need for weak and easily compromised passwords and online identities.

Is a Private Blockchain More Secure than a Public One?

The practise of building a private blockchain to preserve security is a severely misguided one. It is true that a private blockchain allows for the screening of participants, whereas a public blockchain is essentially accessible to everyone. However, it is this exposure that allows a public blockchain to develop immunity to hacks. For example, Bitcoin is the original public blockchain, having withstood years of relentless hacking without ever being compromised, getting more resilient with every hack that it withstands. This epitomises that public blockchains, much like Lisk’s, are considerably superior than private blockchains.

Can a Blockchain get Hacked?

No, a blockchain itself does not get hacked. The security of blockchain technology should not be confused with news about hacks, such as those carried out on cryptocurrency exchanges. Similarly, to normal hacks, the underlying vulnerability allowing for hacks on exchanges stem from centralisation. Despite blockchain technology being decentralized, there are still centralized aspects of it, such as cryptocurrency exchanges. This means that hackers can attack a single point in the hope of gaining access. As such, these hacks have given rise to calls for decentralized exchanges and it is only a matter of time before these become the main platforms allowing people to trade cryptocurrencies.

Such hacks epitomise how important it is for every aspect of blockchain to be as decentralized as possible, as distributed information and assets are definitely more secure.

The security of blockchain has roots in the cryptography that it utilizes however it is the technology’s decentralized nature that provides the foundations for its security. In fact, it is this distribution and decentralization that has got most people excited about the potential of blockchain technology.

Blockchain in The Fashion Industry

When glamour meets tech, the corollary is very widely accepted by people over the world even though tech-enabled fabric would cost a little extra. Most of the big brands today are changing the course of conventional fashion towards a more outré fashion. Recently Levis launched a SUPER DOPE smart jacket in collaboration with Google specially for people who commute on a bike. It costs $350 yet it is gaining a lot of popularity. You can listen to music, enable google maps, answer phone calls and enable text on your jacket while on-go.

As I see it, the entire culture is shifting its pace and methods to infuse technology and related trends with it. The new way to survive is to adopt technology. Probably this is why most sports gear brand (like Nike) endorse themselves as more of a tech company than an apparel company. Nike is constantly coming up with radical solutions with state-of-the-art sensors to measure heart rate, speed, calories burnt, distance run while performing any activity.

The above case study was a typical example of Internet of Things (IoT) in fashion. Let’s see how Artificial Intelligence (AI) can revolutionise fashion. When I walk into Marks & Spencer, I see a myriad of options not knowing where to go. Also, FOMO clouds my judgment. What would it be like if M&S installs a kiosk in every section where customer can choose the type of fabric they want, the colour, the size et al — and the kiosk tells the customer what the store currently holds! It is like shopping on a mobile app but being physically in the store.

Blockchain critics love to replace blockchain with a regular database even in the most perfect of usecases. What makes blockchain unique is that the data once written onto the ledger can’t ever be changed. It won’t change even if God wants it to change. This means, nobody is more powerful than the other in a blockchain world. Only truth will triumph. Secondly, it is truly decentralised and distributed in nature so everyone can see what exactly is going on. There is NO centralised authority responsible to share the data. This means nobody owns the data. This concept is super powerful when people with dirty hands try to change “facts” just because they can.

Blockchain’s novelty engenders from its unique ability to bridge the gap between physical world and digital world (tokenisation) to create a REAL digital identity on the blockchain. Often, a cryptographic hash or “serial number” is the primary physical identifier which can be traced back to the product. This concept precludes manufacturing of counterfeit items because a “fake” hash can’t be generated.

There are so many social activist groups lambasting big fashion brands for harming animals, environment, or for unethical practices. A lot of consumers are also chary of buying anything that is made of animal skin. So, how about a concept where users know where exactly is the product they are purchasing coming from? Imagine the information about history of provenance is just a QR code scan away?

So many talented people dwell in remote places making intricate fabrics of great value. Most of the times, large fashion brands hire these poor people at a very low wage. This is practically exploiting people in an oppressive way.

In 2017, London designer Martine Jarlgaard, in collaboration with the blockchain company Provenance, took the initiative to produce the unprecedented “smart labels”. The consumer can scan the clothing item to see every step in the production process ranging from raw material to final product. This kind of transparency will likely be a selling point for consumers who increasingly want to know how and where their clothes are made.

At the end of the tunnel, there’s light. Likewise, the end result of blockchain is to integrate and include people in the economy who have been neglected till now. A dApp can be created for the people who are living in a deplorable condition to give them a livelihood. Since blockchain enables P2P trade inherently, there is no need for middlemen in the middle. People can directly buy from people rather than the brands. This would certainly take production back to the local, distributed hubs.

What is Digital Signature

A digital signature is a mathematical technique used to validate the authenticity and integrity of a message, software or digital document. As the digital equivalent of a handwritten signature or stamped seal, a digital signature offers far more inherent security, and it is intended to solve the problem of tampering and impersonation in digital communications. Digital signatures can provide the added assurances of evidence of origin, identity and status of an electronic document, transaction or message and can acknowledge informed consent by the signer.

In many countries, including the United States, digital signatures are considered legally binding in the same way as traditional document signatures.

How digital signatures work

Digital signatures are based on public key cryptography, also known as asymmetric cryptography. Using a public key algorithm, such as RSA, one can generate two keys that are mathematically linked: one private and one public. (for more on Digital signatures work because public key cryptography depends on two mutually authenticating cryptographic keys. The individual who is creating the digital signature uses their own private key to encrypt signature-related data; the only way to decrypt that data is with the signer’s public key. This is how digital signatures are authenticated.

Digital signature technology requires all the parties to trust that the individual creating the signature has been able to keep their own private key secret. If someone else has access to the signer’s private key, that party could create fraudulent digital signatures in the name of the private key holder.

How to create a digital signature

To create a digital signature, signing software — such as an email program — creates a one-way hash of the electronic data to be signed. The private key is then used to encrypt the hash. The encrypted hash — along with other information, such as the hashing algorithm — is the digital signature.

The reason for encrypting the hash instead of the entire message or document is that a hash function can convert an arbitrary input into a fixed length value, which is usually much shorter. This saves time as hashing is much faster than signing. The value of a hash is unique to the hashed data. Any change in the data, even a change in a single character, will result in a different value. This attribute enables others to validate the integrity of the data by using the signer’s public key to decrypt the hash.

If the decrypted hash matches a second computed hash of the same data, it proves that the data hasn’t changed since it was signed. If the two hashes don’t match, the data has either been tampered with in some way — integrity — or the signature was created with a private key that doesn’t correspond to the public key presented by the signer — authentication.

A digital signature can be used with any kind of message — whether it is encrypted or not — simply so the receiver can be sure of the sender’s identity and that the message arrived intact. Digital signatures make it difficult for the signer to deny having signed something — assuming their private key has not been compromised — as the digital signature is unique to both the document and the signer and it binds them together. This property is called nonrepudiation.

Digital signatures are not to be confused with digital certificates. A digital certificate, an electronic document that contains the digital signature of the issuing certificate authority, binds together a public key with an identity and can be used to verify that a public key belongs to a particular person or entity.

Most modern email programs support the use of digital signatures and digital certificates, making it easy to sign any outgoing emails and validate digitally signed incoming messages. Digital signatures are also used extensively to provide proof of authenticity, data integrity and nonrepudiation of communications and transactions conducted over the internet.

Classes of digital signatures

There are three different classes of Digital Signature Certificates:

Class 1: Cannot be used for legal business documents as they are validated based only on an email ID and username. Class 1 signatures provide a basic level of security and are used in environments with a low risk of data compromise.
Class 2: Often used for e-filing of tax documents, including income tax returns and Goods and Services Tax (GST) returns. Class 2 digital signatures authenticate a signee’s identity against a pre-verified database. Class 2 digital signatures are used in environments where the risks and consequences of data compromise are moderate.
Class 3: The highest level of digital signatures. Class 3 signatures require a person or organization to present in front of a certifying authority to prove their identity before signing. Class 3 digital signatures are used for e-auctions, e-tendering, e-ticketing, court filings and in other environments where threats to data or the consequences of a security failure are high.

Uses of digital signatures

Industries use digital signature technology to streamline processes and improve document integrity. Industries that use digital signatures include:

Government – The U.S. Government Publishing Office publishes electronic versions of budgets, public and private laws and congressional bills with digital signatures. Digital signatures are used by governments worldwide for a variety of uses, including processing tax returns, verifying business-to-government (B2G) transactions, ratifying laws and managing contracts. Most government entities must adhere to strict laws, regulations and standards when using digital signatures.

Healthcare – Digital signatures are used in the healthcare industry to improve the efficiency of treatment and administrative processes, to strengthen data security, for e-prescribing and hospital admissions. The use of digital signatures in healthcare must comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Manufacturing – Manufacturing companies use digital signatures to speed up processes, including product design, quality assurance (QA), manufacturing enhancements, marketing and sales. The use of digital signatures in manufacturing is governed by the International Organization for Standardization (ISO) and the National Institute of Standards and Technology (NIST) Digital Manufacturing Certificate (DMC).

Financial services – The U.S. financial sector uses digital signatures for contracts, paperless banking, loan processing, insurance documentation, mortgages, and more. This heavily regulated sector uses digital signatures with careful attention to the regulations and guidance put forth by the Electronic Signatures in Global and National Commerce Act (E-Sign Act), state UETA regulations, the Consumer Financial Protection Bureau (CFPB) and the Federal Financial Institutions Examination Council (FFIEC).

What is Mimblewimble?

Tested for decades, Mimblewimble uses elliptic-curve cryptography that requires smaller keys than other cryptography types. In a network that is using the Mimblewimble protocol, there are no addresses on the blockchain, and the network’s data storage is highly efficient. Mimblewimble needs about 10% of the data storage requirements of the Bitcoin network. This makes Mimblewimble highly scalable for storing the blockchain, significantly faster, and less centralized. Furthermore, the nature of the protocol allows for private transactions that are highly anonymous (more about this later).

The birth of Mimblewimble

Rejoice, Harry Potter fans! Another reference is coming from the movie fan world. The Mimblewimble Whitepaper was first published on July 2016 in the Bitcoin research channel under the anonymous author name of Tom Elvis Judisor – the French name for Voldemort. Soon after the whitepaper was published – at the end of 2016 -, another anonymous user with the pseudo name “Ignotus Peverell” (the original owner of the invisibility cloak from the Harry Potter universe) started a Github project with the application of the Mimblewimble protocol. This project is called Grin, which released its mainnet on January 15, 2019. There’s also another implementation of Mimblewimble, Beam, that has been already released. We will talk about Grin and Beam later in this article.

Confidential Transactions

This is the point where Mimblewimble comes into the picture. As mentioned before, the protocol proposes a much more efficient system, eliminating inputs and outputs. The UTXO model is replaced by one multisignature for all inputs and outputs which are called Confidential Transactions. If Alice wants to send Bob a coin, both Alice and Bob create a multisignature key that is used to verify the transaction. Confidential Transactions use the Pedersen Commitment scheme; there are no addresses. Instead, the parties share a “blinding factor”. The blinding factor encrypts the inputs and outputs of the transaction along with both parties’ public and private keys. This blinding factor is shared as a secret between the two parties who were engaged in the transaction. Due to the blinding factor replacing addresses, only the two parties know that they were involved in a transaction. This keeps the privacy of the network at a high level. The Pedersen Commitment scheme works as follows. Full nodes deduct the encrypted amounts from both the inputs and outputs, creating a balanced equation that proves that no coins were produced out of thin air. And during the whole process, the node does not know the actual amount of the transaction.

Blockchain Use-case: Internet Of Things

IoT or Internet of Things is an interconnected network of smart devices that include everything from our phones, baby monitors, fridges, front door keys etc. Increasingly, these devices are becoming integrated into our lives. According to Wikipedia, “The number of IoT devices increased 31% year-over-year to 8.4 billion in 2017 and it is estimated that there will be 30 billion devices by 2020. The global market value of IoT is projected to reach $7.1 trillion by 2020”. There are already lots of examples of IoT networks in use today. One welcomed example of an IoT smart device is the Petnet Smart Pet Feeder. This device allows us to automate the feeding of our pets. It is able to determine which is the best type of food for your dog or cat and order it via online stores.

The feeder will then automate the amount and times when your pet can eat according to what is best for it. This device can be controlled via any smartphone so owners can ensure that their pet is being fed even if they are halfway around the world on holiday.

Now that we have a clear understanding of what IoT and blockchain are all about, we can take a closer look at how these two technologies can be used in parallel to create exciting new software solutions.

Since the main selling point of blockchain is security, I will start by looking at how using blockchain to secure the internet of things will make many of the apps we use in the future safer and more secure from cyber-attacks.

Security

Using blockchain with IoT stands to benefit applications enormously. Current applications rely on the client-server model in order to function. In essence, this means that all devices are connected to one central authority that controls the network and data.

Time and time again, this central flaw to this model has allowed hackers to gain control of networks and steal data and even access webcams and speakerphones in people‘s homes.

The blockchain model would prevent such attacks from happening. Since a decentralized database would remove any one point of weakness attackers would have to target individual nodes on the network instead.

Any attack on an individual node on the network would also be futile as all the other nodes would resist any attempt to alter the data. Since data is held in a blockchain is secured by cryptography it is much safer than with a traditional client-server database.

Increased Speed of Transactions

Another advantage of employing blockchain solutions to IoT networks is the potential to increase the speed of transactions. This advantage is very specific to the use case to which it is applied. Bitcoin transactions, for example, takes longer than VISA because of limited network speeds. Since each participant on the network is required to validate transactions rather than one single entity, these kinds of straightforward transactions are faster with the client-server model.

It is when the transactions become more complex than an IoT application using blockchain technology can really shine. The implementation of smart contracts will allow multiple resulting actions to occur automatically.

A future version of the Petnet Smart Pet Feeder will be far more independent. The entire process of automating every aspect of feeding your pet could be done by the feeder.

While the current model can reorder food, a future version would be able to employ smart contracts to initiate payments to the online store without the need to involve the owner. Once the goods were received, the feeder could be refilled at which time the entire process would begin again.

Automation would allow more complex transactions to take place instantaneously. This has enormous benefits for IoT users.

Reduced Costs

While there is still much debate regarding the true cost of blockchain databases (in several countries the cost of mining a single Bitcoin currently exceeds $10,000), the overall consensus is that IoT networks costs would be reduced significantly.

The biggest reduction in costs will come from removing intermediaries and automating more complex transactions. Smart contracts only require relatively small “gas” fees to automate many of the processes that currently take time-consuming human intervention.

Blockchain and Supply Chain Management

The life cycle of a merchandise is a fascinating one. The next time you’re purchasing something in the supermarket, think of what all it had to go through to get in your hands. Think about where all the raw constituents came from, who all transported the raw material to manufacturing plant where it was fashioned, and how it ultimately got packed and ended up in the very shop where you are purchasing it right now. Supply chains are absolutely critical for the overall well-being of your business. The current system of supply chains is outdated and requires a significant reboot. This is where the blockchain comes in.

A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain). The 3 properties of the blockchain technology that is going to help disrupt the supply chain management system are: Decentralization, Immutable and Transparency.

So, from what we have known so far, the blockchain technology has properties of decentralization, transparency, and immutability. As such, it is the perfect tool to use for the disruption of the supply chain management industry. Every time a product changes hands, the transaction could be documented in the blockchain, creating a permanent history of a product, from manufacture to sale. What this does, is that it reduces:

Time Delays
Human Error
Added Costs

Blockchain can definitely improve the following properties:

Recording the quantity of the products and its transfer through different parties.
Tracking all the purchase orders, change orders, receipts, trade-related details
Verifying the validity of the certification of the products. Eg. this can be used to track whether a particular item meets certain quality standards or not

It can link various physical items to serial numbers, barcodes, and tags like RFID etc.
Helps in the sharing all the information about the manufacturing process, assembly, delivery, and maintenance of products with the different parties in the supply chain.

So, if we were to look into all the benefits that the blockchain can bring into the system:

Blockchain’s transparency helps in the careful documentation of a product’s journey from its point of origin to all its suppliers. This increases the trust among the various parties in the supply chain because all the data is visible for everyone to see.
The blockchain network can take in any and all participants of the supply chain network. Plus, regardless of their geographical location, everybody will be able to connect with the blockchain.
Blockchain’s immutability will make sure that all the records in the chain are honest and free from corruption. Plus, the strong security from its innate cryptography will eliminate unnecessary audits, saving copious amounts of time and money.
The utilization of blockchain also opens up the doors to future innovation.

It seems like the blockchain technology and supply chain management systems were built for each other. In fact, all the flaws of the current supply chains can be easily mitigated by using the blockchain technology. We believe that this is one of the foremost industries that the blockchain can disrupt and change for the better. Hopefully, blockchain-based supply chain management systems can be the norm in the future.

History of Blockchain

Blockchain technology has to be one of the principal innovations of the 21^stcentury assumed the ripple effect it is having on various sectors, from financial to manufacturing as well as education. Unknown to many, is that Blockchain history dates back to the early 1990’s. Since its popularity started increasing a few years back, a number of requests have cropped up all but underlining the kind of impact it is destined to have as the race for digital economies heat up.

How blockchain emerged?

Stuart Haber and W. Scott Stornetta intended what many people have come to know as blockchain, in 1991. Their first work complex working on a cryptographically secured chain of blocks whereby no one could tamper with timestamps of documents. In 1992, they upgraded their system to incorporate Merkle trees that enhanced efficiency thereby enabling the collection of more documents on a single block. However, it is in 2008 that Blockchain History starts to gain relevance, thanks to the work one person or group by the name Satoshi Nakamoto.

Satoshi Nakamoto is accredited as the brains behind blockchain technology. Very little is known about Nakamoto as people believe he could be a person or a group of people that worked on Bitcoin, the first application of the digital ledger technology. Nakamoto conceptualized the first blockchain in 2008 from where the technology has evolved and found its way into many applications beyond cryptocurrencies. Satoshi Nakamoto released the first whitepaper about the technology in 2009. In the whitepaper, he provided details of how the technology was well equipped to enhance digital trust given the decentralization aspect that meant nobody would ever be in control of anything. Ever since Satoshi Nakamoto exited the scene and handed over Bitcoin development to other core developers, the digital ledger technology has evolved resulting in new applications that make up the blockchain History.

Structure of the blockchain:

In simple terms, Blockchain is a peer-to-peer distributed ledger that is secure and used to record transactions across many computers. The ledger’s contents can only be updated by adding another block linked to the previous block. It can also be envisioned as a peer-to-peer network running on top of the internet. In layman or businesses term, blockchain is a platform where people are allowed to carry out transactions of all sorts without the need for a central or trusted arbitrator. The created database is shared among network participants in a transparent manner, whereby everyone can access its contents. Management of the database is done autonomously using peer-to-peer networks and a time stamping server. Each block in a blockchain is arranged in such a way that it references the content of the previous block. The blocks that form a blockchain hold batches of transactions approved by participants in a network. Each block comes with a cryptographic hash of a previous block in the chain. Read more about what is blockchain.

General Security Principle: Introduction

A principle which is a core obligation of information security for the safe utilization, flow, and storage of information is the CIA triad. CIA stands for confidentiality, integrity, and availability and these are the three main objectives of information security. For a deeper look into these objectives, check out our security training classes.

The Application Access Layer defines the notion that access to end-user applications have to be constrained to business ought-to-know
The Infrastructure Access Layer describes the notion that access to infrastructure components has to be constrained to business ought-to-know. For instance, access to servers.
The Physical Access Layer describes the notion that the physical access to any system, server, computer, data centre, or another physical object storing confidential information has to be constrained to business ought-to-know.
The Data In Motion Layer describes the notion that data ought to be secured while in motion.
This little icon in the middle of the illustration shows the centre of information security and the reason for the emergence of the CIA principles; the icon represents information and represents the need to protect sensitive information.

Confidentiality

The aim of confidentiality is to ensure that information is hidden from people unlawful to access it. The confidentiality principle dictates that information should solely be viewed by people with appropriate and correct privileges. The science (and art) used to ensure data confidentiality is cryptography, which involves encryption and decryption methods.

Confidentiality can be easily breached so each employee in an organization or company should be aware of his responsibilities in maintaining confidentiality of the information delegated to him for the exercise of his duties. For instance, if an employee allows someone to take a glimpse of his computer screen while he is, at that moment, displaying confidential information on the computer screen may have already constituted a breach of confidentiality.

Furthermore, confidentiality and privacy are often used interchangeably. Below, we discuss cryptography, operative manners of protecting confidentiality, and we have included some tips on confidentiality agreements.

Cryptography

Cryptography’s beginning can be traced thousands of years ago. However, the contemporary cryptography differs substantially from the classic one, which used pen and paper for encryption and which was far less complex. The establishment of the Enigma rotor machine and the subsequent emergence of electronics and computing enabled the usage of much more elaborate schemes and allowed confidentiality to be protected much more effectively.

Encryption is an accepted and effective way of protecting data in transit but is increasingly being used for protecting data at rest as well. The Computer Security Institute published the results of a survey in 2007, which showed that 71% of the businesses used encryption for various data in transit while 53% used encryption for selections of data at rest. Furthermore, there are different techniques for preserving confidentiality depending on whether the data is in motion, at rest or a physical object. Naturally, access controls are also a necessity for maintaining confidentiality. Access controls can consist of passwords, biometrics, or a mixture of both. As regards to physical data, its means of protection are somewhat similar – access to the area where the information is kept may be granted only with the proper badge or any different form of authorization, it can be physically locked in a safe or a file cabinet, there could be access controls, cameras, security, etc.

Encryption consists of changing the data located in files into unreadable bits of characters unless a key to decode the file is provided. In manual encryption, the user utilizes software and initiates the encryption. In transparent encryption, the encryption happens automatically without any intervention on the side of the user.

Symmetric encryption occurs by utilizing character substitution with a key that will be the only means of decrypting the bits of information. Conversely, asymmetric encryption is used when there are two keys, a public key, and a private key. Any person may encrypt the information with the public key but it can only be decrypted by the holder of the private key.

Watch this space for more information on this topic!

History of Cryptography

The art of cryptography is considered to be born along with the art of writing. As civilizations evolved, human beings got systematized in tribes, groups, and kingdoms. This led to the emergence of ideas such as supremacy, clashes, sovereignty, and politics. These ideas additionally fuelled the natural need of people to connect secretly with selective recipient which in turn ensured the continuous evolution of cryptography as well.

The roots of cryptography are found in Roman and Egyptian civilizations.

Hieroglyph − The Oldest Cryptographic Technique

The first known evidence of cryptography can be traced to the use of ‘hieroglyph’. Some 4000 years ago, the Egyptians used to communicate by messages written in hieroglyph. This code was the secret known only to the scribes who used to transmit messages on behalf of the kings.

Later, the scholars moved on to using simple mono-alphabetic substitution ciphers during 500 to 600 BC. This involved replacing alphabets of message with other alphabets with some secret rule. This rule became a key to retrieve the message back from the garbled message.

The earlier Roman method of cryptography, popularly known as the Caesar Shift Cipher, relies on shifting the letters of a message by an agreed number (three was a common choice), the recipient of this message would then shift the letters back by the same number and obtain the original message.

Steganography

Steganography is similar but adds another dimension to Cryptography. In this method, people not only want to protect the secrecy of an information by concealing it, but they also want to make sure any unauthorized person gets no evidence that the information even exists. For example, invisible watermarking.

In steganography, an unintended recipient or an intruder is unaware of the fact that observed data contains hidden information. In cryptography, an intruder is normally aware that data is being communicated, because they can see the coded/scrambled message.

Renaissance

It is during and after the European Renaissance, various Italian and Papal states led the rapid proliferation of cryptographic techniques. Various analysis and attack techniques were researched in this era to break the secret codes.

Improved coding techniques such as Vigenere Coding came into existence in the 15^th century, which offered moving letters in the message with a number of variable places instead of moving them the same number of places.

Only after the 19^th century, cryptography evolved from the ad hoc approaches to encryption to the more sophisticated art and science of information security. In the early 20^th century, the invention of mechanical and electromechanical machines, such as the Enigma rotor machine, provided more advanced and efficient means of coding the information. During the period of World War II, both cryptography and cryptanalysis became excessively mathematical.

With the advances taking place in this field, government organizations, military units, and some corporate houses started adopting the applications of cryptography. They used cryptography to guard their secrets from others. Now, the arrival of computers and the Internet has fetched actual cryptography within the influence of common people’s lives.

What Is A Hybrid Blockchain?

It is important to understand what a blockchain system is: a blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block a timestamp, and transaction data (generally represented as a Merkle tree). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.

A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain). Now that we’ve got a basic understanding of what a Blockchain System is we can dive right into understanding hybrid blockchains.

Hybrid Blockchain

Hybrid Blockchains could lie somewhere in-between private and public blockchains, depending on their architecture. Hence, to get a good understanding of hybrid blockchains, one must first understand the differences between private and public blockchains. As the name suggests, public blockchains are accessible to and managed by the public. Anyone can participate in the upkeep and governance of the blockchain. The most popular blockchain in the world, Bitcoin, is a public blockchain. Participators are typically rewarded in the form of block rewards for their contributions to the network to incentivise good behaviour on the part of network peers. Since millions of users manage a public blockchain across the world in real time, attaining consensus for a public blockchain is time-consuming and expensive.

For example, the consensus mechanism that Bitcoin uses, Proof of Work, relies profoundly on wasteful computations for millions of devices to ensure security. By comparison, a private blockchain allows limited access to entities outside a trusted few who were involved in the creation of the private blockchain. Typically, private blockchains have administrators who can control permissions of adding or modifying data on a private blockchain. The most popular private blockchains include the Hyperledger fabric which is being developed as a competitor to Ethereum by IBM and quorum, which is being developed by J.P. Morgan. Private blockchains are much faster than public blockchains because the network is managed by a handful for trusted nodes whose motives are clearly for the benefit of the network. Such trusted nodes typically belong to financial institutions or universities to maintain fairness and remain unbiased.

Now, it is clear that each type of blockchain has its strengths and weaknesses. Public blockchains while being transparent and resistant to tampering are slow and expensive whereas, private blockchains are somewhat centralised but can deliver much higher throughput and speeds. As a logical step, hybrid blockchains combine the benefits of both of the blockchains while trying to limit the disadvantages. Therefore, with hybrid blockchains, we can employ a public blockchain to make the ledger accessible to every single person in the world, with a private blockchain running in the background that can control access to the modifications in the ledger.

Hybrid Blockchains in the Real World

One of the leading hybrid blockchain platforms, XinFin, has developed a unique network for Ramco Systems for the management of supply chain logistics. XinFin completed its ICO earlier this year and had since developed its public-private blockchain on Ethereum (public blockchain) and Quorum (private blockchain). There are numerous benefits to using a hybrid blockchain like the speed of private blockchains combined with the security of public blockchains. The private blockchain is used to generate a hash of transactions which is later verified using the public blockchain.

Another real-world application of hybrid blockchains includes Ripple network and the XRP token. Ripple has regularly been criticised for its centralised nodes which can arbitrate transactions in the case of a dispute. But by adding a public blockchain to verify the operations of its private blockchain can make the network much more secure for its users.