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RyoichInoueSecondEssay 3 - 02 Jan 2021 - Main.RyoichInoue
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< | What impact block chain technology has on the privacy in the age of the Internet | >
> | Contract in the digital era (2nd draft) | | | | |
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< | -- By RyoichInoue - 20 Nov 2020 | >
> | -- By RyoichInoue - 2 Jan 2021 | | | | |
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> | The way by which people form the contract is in the verge of change, utilizing blockchain. Blockchain is based on several technologies, like public-private key encryption and Peer to Peer Network. I will first explain the concepts of Public-private key encryption and Peer to Peer Networks. Then, dig ito the nature of blockchain, and analyze what the implication of blockchain to the formation of contract. | | | | |
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< | Privacy concern in the age of the Internet | >
> | Public-private key encryption | | | | |
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< | Many services or activities on the Internet are still based on client server model. Client server model is the model in which the services or activities are hosted on the server maintained the service provider. The users will access such server. The client server is centrally maintenance by the service provider. Under this model, the service provider, who is managing the client server which stores all data, will have almost unlimited access to such data. This would eventually lead to the ultimate surveillance. For example, Facebook has all data of you, which enables it to gain data as to your personal preference, activities, and network. | >
> | The traditional way of sending secured message is to encrypt massage with the shared “secret key”. The “secret key” must be communicated from the sender to recipient somehow. Because of this necessity to communicate the “secret key”, the message was always under the risk of inception. If unintended third party obtains access to the “secret key”, security of the message will be ruined. | | | | |
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< | How blockchain technology solves the problem | >
> | The technology called public-private key encryption had changed this traditional way of exchanging secured message. The message is encrypted using public key and private key of the sender, public key can be freely communicated to the recipient, and the recipient will decrypt the message using his public key and private key. In this way, there is no need to communicate “secret key”, significantly reducing the risk of interception of it. Using primitive numbers for public key and private key, it is nearly impossible to find out the right combination even for the powerful computer. | | | | |
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< | Blockchain technology has the potential to solve this problem, by enabling “pseudonymous” activities and transactions on the Internet. Blockchain is based on the technologies that had been developed. | >
> | Peer to Peer Networks | | | | |
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< | technologies underlying blockchain | >
> | The traditional way of network is client server model. Under client server model, there is a central party who is managing and operating the server, to which users will access. Under this model, the success of network depends on the central party, giving rise to the risk of failure of such central party. Peer to Peer Networks is the technology which enabled the network to operate without the central party, distributing the information to the computers of peers. Under Peer to Peer Network, because the network is widely distributed to the computers of peers, failure of certain computer will not result in the failure of network. | | | | |
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< | public-private encryption | >
> | Blockchain | | | | |
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< | Public-private encryption is the technology which enables safe communication which reduces of risks that the secret communication will be intercepted. Before the advent of public-private encryption, the sender and recipient of the secret message had to come up with the shared password, and somehow communicate such password each other. Because of this, the passwords are often compromised, and the passwords are intercepted while being communicated. | >
> | Blockchain is the distributed database, in which Public-private key encryption and Peer to Peer Networks are used. By using Peer to Peer Networks, Blockchain is operated without central control. Copies of ledgers are distributed in Peer-to-Peer Networks, and anyone with device connected to Internet can access to the ledgers.
For the authentication mechanism, Public-private key encryption is used. Blockchain is updated by peers. When peers update the blockchain, they use public key as reference point, and use private key as authentication / validation. The true identity is not associated with the public key, giving the “pseudonymous” nature to the block chain. | | | | |
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< | Public-private encryption is the technique, under which the message is encrypted by combining public key and private key of the sender, which can only be de-crypted by the private key of the recipient. This enabled safe communication without sharing the common password. | >
> | Smart contract | | | | |
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< | Peer to peer networks | >
> | There are various applications of blockchain, Bitcoin being most famous example. But crypto currencies are not the only one application. Other important application is “smart contract”. The parties will reduce their agreements into “code” of blockchains. The obligations under the smart contract will be monitored and operated by blockchain, increasing the possibility of the contract being executed. Utilizing temper resistant nature of blockchain, it would bring benefits in the contractual relationships. For example, car manufactures can monitor the whole supply chain. If there is defect in parts, the manufacture can trace back from which supplier the defected parts came and recall only those cars in which defected parts are integrated, rather than recalling the whole products in the market.
Also, smart contract will facilitate business transaction between unknow parties. Under smart contract, the obligations under the contract will be automatically executed by blockchain, therefore it is not necessary for the parties to trust each other, and they can trust the code. | | | | |
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< | As described above, the traditional client server model relayed on the central control by the service provider. Under client server model, the flow of information was unilateral. Information only flowed from the client server to the user. Peer to peer networks enabled multi-way flow of information without the central control by directly connecting computers. | >
> | Limitation of smart contract | | | | |
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< | Advantages of blockchain technology
By utilizing public-private encryption technology, blockchain enabled communication and transaction without disclosing the true identity. The communication and transaction will be conducted by reference point, which is not connected with the real identity. In this sense, the blockchain enabled “pseudonymous” communication and transaction.
Also, by utilizing peer to peer networks, blockchain operates without central provider. Blockchain will be operated based on the protocol. The blockchain is decentralized database without any provider which manages the client server.
Because of these features of blockchain, this can prevent government or large corporations gaining access to your data, regaining peoples’ autonomy and freedom in the Internet sphere.
Advantages of blockchain technology
Bitcoin
Probably the most famous example of application of blockchain is Bitcoin, which was introduced in 2008 by 9-page paper by one or group of developers who called themselves as Satoshi Nakamoto. Unlike conventional payment institutions, Bitcoin operates without central clearing house. The double spending problem is solved by the mechanism, called “consensus”, by which the transaction is validated. Because the history of Bitcoin transactions is spread in thousands of computers connected through blockchain, it is highly temper resilient. Bitcoin account operates as “reference point” without disclosing the true identity, enabling pseudonymous, which prevents government or large corporation from gaining access to your transaction history.
Smart contract
The application of Bitcoin is not limited to the cryptocurrency. The temper resilient nature of blockchain is utilized to create more rigid digital contract called “Smart Contract”.
New challenge
Despite the positive aspect of blockchain, which enable us to regain freedom from the surveillance by the government and large corporations, it raises new challenges as well.
KYC and AML
Because blockchain has enabled the pseudonymous transactions and such transactions can be completely border free, the regulators in many jurisdictions are concerned that it would evade regulatory framework of know-your customer requirements and anti-money laundry regulations.
role of central banks
Also, for the case of the application of blockchain to payment system such as Bitcoin, the supply of the Bitcoin will be managed by the protocol. The central bank of each jurisdiction traditionally fulfilled this function, in order to effectively implement monetary policy. Central banks in many jurisdictions are raising concern that the blockchain-backed crypto currencies would undermine the role of central banks.
new types of privacy concern
Even though the blockchain seems to offer the resolution to the privacy concern which existed in the traditional Internet activities, it actually raises new type of privacy concern. Blockchain-backed transactions are “pseudonymous’ but it is not “anonymous”. The history of transactions in the blockchain backed system will be publicly available and can be accessed by anyone. Therefore, there is possibility that, even though account itself can be opened without disclosing the true identity, by somehow connecting the account with the actual identity, all of the transaction history might be accessible to anyone in the network.
I don't understand the idea behind the draft. A number of component ideas are accurately described, but the overall picture doesn't make sense to me.
A blockchain is a way of storing information, as you say. It replaces the database that underlay late-20th century enterprise software with a public or semi-public, authenticated ledger, which provides for distributed storage: anyone can have a copy of the ledger and can verify that the copy is authentic, as well as for arranging for safe authenticated updating or synchronizing of ledgers. This does for data that might otherwise be stored in a relational database what distributed version control has done for data that constitutes software source code under collaborative development.
This is orthogonal to the question of identity management. Blockchain ledgers can be used in contexts that preclude or permit anonymous generation of data, just as more familiar storage models can. Swiss banks and US state corporate records holders don't need blockchain to have anonymity in financial and corporate transactions. As you accurately point out, digital identity management supported by strong public-key encryption can provide for both high-reliability identity and moderately-resistant anonymity and pseudonymity, using the same math. Blockchain storage also depends on these primitives, operated in a slightly different configuration, but these are three parallel applications of basic cryptographic algorithms: they aren't causally sequenced.
Cryptocurrencies, the fourth distinct subject being conflated here, can exist without blockchain ledgers: US ethanol subsidy payment tokens (famously cornered by Goldman Sachs at the end of the last decade) are a straightforward example. Digital cash based on strong public-key encryption existed before blockchain ledger storage was proposed; I assigned the 1990 Scientific American paper by David Chaum that fully illustrates this point.
So the best route to improvement here is to unconfuse these mixed parts. If your point is that strong public-key encryption can be used to give identity control back to individuals, I agree of course: I tried, however badly, to teach the same idea over six weeks of the course. But what has that to do with blockchain storage? If your point is that the same technology can be used to modify the basic storage paradigm of late-20th century enterprise software, shifting from relational databases to public or semi-public authenticated ledgers implementing distributed version controlled data storage, that's technologically correct, but the implications are not those described. IBM's Chris Ferris gave a good talk on the technical relevance of blockchain at my 2016 SFLC conference at CLS which is a good place to start if you want to move the draft in the direction of explaining blockchain. But this in turn has little to do with privacy.
I know that the draft reflects what lots of people believe about blockchain: a sort of stew of reality and non-reality, and that much business in the world is done at the moment on the basis of "greater fool" strategies that depend on this misunderstanding. That Softbank has been the greatest fool of all doesn't make it irrelevant that digital collectibles like Bitcoin are presently the tulip bulbs of crowd madness. But you can learn not to think like the nonsense being thought around you. That might be helpful someday.
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> | Blockchain is pseudonymous, but not completely anonymous. Anyone with Internet access can have access to the copies of ledgers in blockchain. Public key is not directly associated with identity. However, once the relationship between public key and the true identity are revealed, anyone can know the whole history of transactions executed by the account with such public key. This gives concern of privacy, making smart contract not fit for transactions which requires high confidentiality. In traditional contracts, the parties have option to make the contract completely confidential.
The other limitation is that the smart contract is only fit for the types of contracts which can be reduced into rigid mathematical formula. Contracts which contain open end terms such as “in good faith” and “best effort” is not fit for smart contract, given it is not possible to reduce such terms into code. One of the resolution for such problem is to use “oracle” which is the third party which will input necessary information / instruction to the blockchain code. | | | \ No newline at end of file |
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RyoichInoueSecondEssay 2 - 27 Dec 2020 - Main.EbenMoglen
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What impact block chain technology has on the privacy in the age of the Internet | | | Even though the blockchain seems to offer the resolution to the privacy concern which existed in the traditional Internet activities, it actually raises new type of privacy concern. Blockchain-backed transactions are “pseudonymous’ but it is not “anonymous”. The history of transactions in the blockchain backed system will be publicly available and can be accessed by anyone. Therefore, there is possibility that, even though account itself can be opened without disclosing the true identity, by somehow connecting the account with the actual identity, all of the transaction history might be accessible to anyone in the network. | |
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I don't understand the idea behind the draft. A number of component ideas are accurately described, but the overall picture doesn't make sense to me.
A blockchain is a way of storing information, as you say. It replaces the database that underlay late-20th century enterprise software with a public or semi-public, authenticated ledger, which provides for distributed storage: anyone can have a copy of the ledger and can verify that the copy is authentic, as well as for arranging for safe authenticated updating or synchronizing of ledgers. This does for data that might otherwise be stored in a relational database what distributed version control has done for data that constitutes software source code under collaborative development.
This is orthogonal to the question of identity management. Blockchain ledgers can be used in contexts that preclude or permit anonymous generation of data, just as more familiar storage models can. Swiss banks and US state corporate records holders don't need blockchain to have anonymity in financial and corporate transactions. As you accurately point out, digital identity management supported by strong public-key encryption can provide for both high-reliability identity and moderately-resistant anonymity and pseudonymity, using the same math. Blockchain storage also depends on these primitives, operated in a slightly different configuration, but these are three parallel applications of basic cryptographic algorithms: they aren't causally sequenced.
Cryptocurrencies, the fourth distinct subject being conflated here, can exist without blockchain ledgers: US ethanol subsidy payment tokens (famously cornered by Goldman Sachs at the end of the last decade) are a straightforward example. Digital cash based on strong public-key encryption existed before blockchain ledger storage was proposed; I assigned the 1990 Scientific American paper by David Chaum that fully illustrates this point.
So the best route to improvement here is to unconfuse these mixed parts. If your point is that strong public-key encryption can be used to give identity control back to individuals, I agree of course: I tried, however badly, to teach the same idea over six weeks of the course. But what has that to do with blockchain storage? If your point is that the same technology can be used to modify the basic storage paradigm of late-20th century enterprise software, shifting from relational databases to public or semi-public authenticated ledgers implementing distributed version controlled data storage, that's technologically correct, but the implications are not those described. IBM's Chris Ferris gave a good talk on the technical relevance of blockchain at my 2016 SFLC conference at CLS which is a good place to start if you want to move the draft in the direction of explaining blockchain. But this in turn has little to do with privacy.
I know that the draft reflects what lots of people believe about blockchain: a sort of stew of reality and non-reality, and that much business in the world is done at the moment on the basis of "greater fool" strategies that depend on this misunderstanding. That Softbank has been the greatest fool of all doesn't make it irrelevant that digital collectibles like Bitcoin are presently the tulip bulbs of crowd madness. But you can learn not to think like the nonsense being thought around you. That might be helpful someday.
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RyoichInoueSecondEssay 1 - 20 Nov 2020 - Main.RyoichInoue
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What impact block chain technology has on the privacy in the age of the Internet
-- By RyoichInoue - 20 Nov 2020
Privacy concern in the age of the Internet
Many services or activities on the Internet are still based on client server model. Client server model is the model in which the services or activities are hosted on the server maintained the service provider. The users will access such server. The client server is centrally maintenance by the service provider. Under this model, the service provider, who is managing the client server which stores all data, will have almost unlimited access to such data. This would eventually lead to the ultimate surveillance. For example, Facebook has all data of you, which enables it to gain data as to your personal preference, activities, and network.
How blockchain technology solves the problem
Blockchain technology has the potential to solve this problem, by enabling “pseudonymous” activities and transactions on the Internet. Blockchain is based on the technologies that had been developed.
technologies underlying blockchain
public-private encryption
Public-private encryption is the technology which enables safe communication which reduces of risks that the secret communication will be intercepted. Before the advent of public-private encryption, the sender and recipient of the secret message had to come up with the shared password, and somehow communicate such password each other. Because of this, the passwords are often compromised, and the passwords are intercepted while being communicated.
Public-private encryption is the technique, under which the message is encrypted by combining public key and private key of the sender, which can only be de-crypted by the private key of the recipient. This enabled safe communication without sharing the common password.
Peer to peer networks
As described above, the traditional client server model relayed on the central control by the service provider. Under client server model, the flow of information was unilateral. Information only flowed from the client server to the user. Peer to peer networks enabled multi-way flow of information without the central control by directly connecting computers.
Advantages of blockchain technology
By utilizing public-private encryption technology, blockchain enabled communication and transaction without disclosing the true identity. The communication and transaction will be conducted by reference point, which is not connected with the real identity. In this sense, the blockchain enabled “pseudonymous” communication and transaction.
Also, by utilizing peer to peer networks, blockchain operates without central provider. Blockchain will be operated based on the protocol. The blockchain is decentralized database without any provider which manages the client server.
Because of these features of blockchain, this can prevent government or large corporations gaining access to your data, regaining peoples’ autonomy and freedom in the Internet sphere.
Advantages of blockchain technology
Bitcoin
Probably the most famous example of application of blockchain is Bitcoin, which was introduced in 2008 by 9-page paper by one or group of developers who called themselves as Satoshi Nakamoto. Unlike conventional payment institutions, Bitcoin operates without central clearing house. The double spending problem is solved by the mechanism, called “consensus”, by which the transaction is validated. Because the history of Bitcoin transactions is spread in thousands of computers connected through blockchain, it is highly temper resilient. Bitcoin account operates as “reference point” without disclosing the true identity, enabling pseudonymous, which prevents government or large corporation from gaining access to your transaction history.
Smart contract
The application of Bitcoin is not limited to the cryptocurrency. The temper resilient nature of blockchain is utilized to create more rigid digital contract called “Smart Contract”.
New challenge
Despite the positive aspect of blockchain, which enable us to regain freedom from the surveillance by the government and large corporations, it raises new challenges as well.
KYC and AML
Because blockchain has enabled the pseudonymous transactions and such transactions can be completely border free, the regulators in many jurisdictions are concerned that it would evade regulatory framework of know-your customer requirements and anti-money laundry regulations.
role of central banks
Also, for the case of the application of blockchain to payment system such as Bitcoin, the supply of the Bitcoin will be managed by the protocol. The central bank of each jurisdiction traditionally fulfilled this function, in order to effectively implement monetary policy. Central banks in many jurisdictions are raising concern that the blockchain-backed crypto currencies would undermine the role of central banks.
new types of privacy concern
Even though the blockchain seems to offer the resolution to the privacy concern which existed in the traditional Internet activities, it actually raises new type of privacy concern. Blockchain-backed transactions are “pseudonymous’ but it is not “anonymous”. The history of transactions in the blockchain backed system will be publicly available and can be accessed by anyone. Therefore, there is possibility that, even though account itself can be opened without disclosing the true identity, by somehow connecting the account with the actual identity, all of the transaction history might be accessible to anyone in the network.
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