Paper by Maxat Kassen: “The article presents the results of field studies, analysing the perspectives of blockchain developers on decentralised service delivery and elaborating on unique algorithms for lifetime ledgers to reliably and safely record e-government transactions in an intrinsically cross-referenced manner. New interesting technological niches of service delivery and emerging models of related data management in the industry were proposed and further elaborated such as the generation of unique lifetime personal data profiles, blockchain-driven cross-referencing of e-government metadata, parallel maintenance of serviceable ledgers for data identifiers and phenomena of blockchain ‘black holes’ to ensure reliable protection of important public, corporate and civic information…(More)”.
Guess who’s getting the world’s first self-sovereign national digital ID?
Article by Durga M Sengupta: “Bhutan — a small Himalayan nation with less than 800,000 people — has decided to roll out a national digital identity system for all its citizens. “National digital ID is the platform on which digitization and online services of banks to hospitals to taxation to universities, everything can come online with 100% assurance,” Ujjwal Deep Dahal, CEO of Druk Holding and Investments, the commercial and investment arm of the government which developed the system, told me over a video call from the capital city of Thimphu.
The national ID system has been built using blockchain technology, which will provide each individual a “self-sovereign” identity, meaning it can only be controlled by the citizen and no other entity, similar to how cryptocurrencies work.
The country’s 7-year-old crown prince, Jigme Namgyel Wangchuck, was the first to enroll in the new system, and it is expected to reach the rest of the population within the year, Dahal said.
“Once I’m onboarded, the interesting part about self-sovereign identity is that only I have my verified credentials in my wallet, in my phone. Nobody has access to it thereon but me, not even the government,” he said. The onboarding process takes about 5 seconds, Dahal estimated. “In our system, you will not visit any booth to register yourself. You’ll just download an app; share your details, selfie, and national ID card; and in the back end, the AI algorithm will run and say, ‘Okay, I can give you a verified credential,’” he said. This timeline would differ for people who don’t have smartphones or require assistance.
Druk Holding and Investments has been instrumental in setting up various other parallel projects, including the recently announced Bhutanverse — a metaverse that displays Bhutanese art, architecture, and motifs…(More)”. See also: Field Report: On the Emergent Use of Distributed Ledger Technologies for Identity Management
Africa fell in love with crypto. Now, it’s complicated
Article by Martin K.N Siele: “Chiamaka, a former product manager at a Nigerian cryptocurrency startup, has sworn off digital currencies. The 22-year-old has weathered a layoff and lost savings worth 4,603,500 naira ($9,900) after the collapse of FTX in November 2022. She now works for a corporate finance company in Lagos, earning a salary that is 45% lower than her previous job.
“I used to be bullish on crypto because I believed it could liberate Africans financially,” Chiamaka, who asked to be identified by a pseudonym as she was concerned about breaching her contract with her current employer, told Rest of World. “Instead, it has managed to do the opposite so far … at least to me and a few of my friends.”
Chiamaka is among the tens of millions of Africans who bought into the cryptocurrency frenzy over the last few years. According to one estimate in mid-2022, around 53 million Africans owned crypto — 16.5% of the total global crypto users. Nigeria led with over 22 million users, ranking fourth globally. Blockchain startups and businesses on the continent raised $474 million in 2022, a 429% increase from the previous year, according to the African Blockchain Report. Young African creatives also became major proponents of non-fungible tokens (NFTs), taking inspiration from pop culture and the continent’s history. Several decentralized autonomous organizations (DAOs), touted as the next big thing, emerged across Africa…(More)”.
Existing and Potential Use Cases for Blockchain in Public Procurement
Paper by Pedro Telles: “The purpose of this paper is to assess the possibility of using blockchain technology in the realm of public procurement within the EU, particularly in connection with the award of public contracts. In this context, blockchain is used as an umbrella term covering IT technologies and cryptographic solutions used to generate consensus on a distributed ledger.
The paper starts by elaborating how blockchains and distributed ledgers work in general, includ-ing the drawbacks of different blockchain models and implementations, before looking into recent developments for distributed consensus that may herald some potential.
As for public procurement, blockchain has been used in three real use cases in Aragon (Spain), Colombia and Peru, with the first two not passing from the pilot stage and the latter being deployed in production. These use cases are analysed with an emphasis in what can be learned from the difficulties faced by each project.
Finally, this paper will posit two specific areas of EU public procurement practice that might benefit from the use of blockchain technology. The first is on data management and accessibility where current solutions have been unsuccessful, such as cross-border certification data as required by the European Single Procurement Document (ESPD) and e-Certis or the difficulties with contract data collection and publication. The second, on situations of clear lack of confidence on public powers, where the downsides of blockchain technologies and the costs they entail are an advantage. Even considering these potential scenarios, the overall perspective is that the benefits of blockchain solutions do not really provide much value in the context of public procurement for now…(More)”.
Proof of Stake
Book by Vitalik Buterin and edited by Nathan Schneider: “The ideas behind Ethereum in the words of its founder, describing a radical vision for more than a digital currency—reinventing organizations, economics, and democracy itself in the age of the internet.
When he was only nineteen years old, in late 2013, Vitalik Buterin published a visionary paper outlining the ideas behind what would become Ethereum. He proposed to take what Bitcoin did for currency—replace government and corporate power with power shared among users—and apply it to everyday apps, organizations, and society as a whole. Now, less than a decade later, Ethereum is the second-most-valuable cryptocurrency and serves as the foundation for the weird new world of NFT artworks, virtual real estate in the metaverse, and decentralized autonomous organizations.
The essays in Proof of Stake have guided Ethereum’s community of radicals and builders. Here for the first time they are collected from across the internet for new readers. They reveal Buterin as a lively, creative thinker, relentlessly curious and adventuresome in exploring the consequences of his invention. His writing stands in contrast to the hype that so often accompanies crypto in the public imagination. He presents it instead as a fascinating set of social, economic, and political possibilities, opening a window into a conversation that far more of us could be having…(More)”.
Non-Fungible Tokens (NFTs)
Report by the Congressional Research Service:Non-fungible tokens (NFTs) have become popular as unique and non-interchangeable units of data that signify ownership of associated digital items, such as images, music, or videos. Token “ownership” is recorded and tracked on a blockchain (a digital database that records data on a decentralized network of computers without the use of a central authority). In the future, supporters believe NFTs will be used as digital representations of physical items, such as a deed to a house or title to a car. NFTs are commonly used to record and represent ownership of an item, verify authenticity, and enable exchange. However, they do not necessarily reflect the legal ownership of an asset or grant copyright to a digital or physical item. NFT owners purchase only the right to the NFT’s blockchain metadata or “token,” not the underlying asset, unless otherwise specified in external contracts or terms and conditions. NFTs share many similarities with cryptocurrencies, and they are commonly bought and traded using cryptocurrency. Both NFTs and cryptocurrencies are built and tracked on blockchains, and they share much of the same customer and community base. However, cryptocurrencies are fungible, meaning interchangeable, whereas NFTs are unique and therefore non-fungible. Most users create and buy NFTs on dedicated NFT marketplaces. For a typical NFT, it is created or “minted” on a blockchain, auctioned off or sold at a fixed price on an NFT marketplace, and “stored”in the buyer’s digital wallet. Smart contracts (self-executing contracts or lines of computer code on a blockchain) can mint NFTs or transfer them from one owner to another. In combination, blockchains and smart contracts are the backbone of the NFT ecosystem…
Report by the Congressional Research Service: “Non-fungible tokens (NFTs) have become popular as unique and non-interchangeable units of data that signify ownership of associated digital items, such as images, music, or videos. Token “ownership” is recorded and tracked on a blockchain (a digital database that records data on a decentralized network of computers without the use of a central authority). In the future, supporters believe NFTs will be used as digital representations of physical items, such as a deed to a house or title to a car. NFTs are commonly used to record and represent ownership of an item, verify authenticity, and enable exchange. However, they do not necessarily reflect the legal ownership of an asset or grant copyright to a digital or physical item. NFT owners purchase only the right to the NFT’s blockchain metadata or “token,” not the underlying asset, unless otherwise specified in external contracts or terms and conditions. NFTs share many similarities with cryptocurrencies, and they are commonly bought and traded using cryptocurrency. Both NFTs and cryptocurrencies are built and tracked on blockchains, and they share much of the same customer and community base. However, cryptocurrencies are fungible, meaning interchangeable, whereas NFTs are unique and therefore non-fungible. Most users create and buy NFTs on dedicated NFT marketplaces. For a typical NFT, it is created or “minted” on a blockchain, auctioned off or sold at a fixed price on an NFT marketplace, and “stored”in the buyer’s digital wallet. Smart contracts (self-executing contracts or lines of computer code on a blockchain) can mint NFTs or transfer them from one owner to another. In combination, blockchains and smart contracts are the backbone of the NFT ecosystem…
Despite substantial market growth over the past two years, NFTs are still relatively nascent. In their current form, NFTs have implications in a variety of policy areas:
– Consumer protection. There are a number of risks to consumers in the NFT ecosystem, and some NFT marketplaces and digital wallets lack basic features to protect consumers from fraud and misleading or deceptive practices.
– Financial regulation. Depending on the purpose and use of NFTs, some NFTs and NFT platforms may fall under existing financial regulatory regimes and definitions.
– Copyright and intellectual property. The relationship between NFTs and the legal ownership of digital or physical property is unclear. Some existing regulations may impact NFT markets.
– Energy and environmental. Both minting and selling NFTs require substantial amounts of energy, which has raised concerns about their environmental impact…(More)”.
Radical Friends: Decentralised Autonomous Organisations and the Arts
Book edited by Ruth Catlow and Penny Rafferty: “In recent years DAOs have been heralded as a powerful stimulus for experimentation to reshape new cultural value systems for interdependence, cooperation, and care. At a time when the mainstream artworld is focused on NFTs, this book refocuses attention toward DAOs as potentially the most radical blockchain technology for the arts, in the long term. Contributors engage with both past and emergent methodologies for building resilient and mutable systems for scale-free mutual aid. Collectively, the book aims to evoke and conjure new imaginative communities, and to share the practices and blueprints for the vehicles to get there…(More)”.
Decentralized Autonomous Organizations: Beyond the Hype
WEF Report: “Decentralized autonomous organizations are disrupting whole sectors. From finance to social networking to philanthropy, these code-driven, community-governed entities are changing the way we work. Yet these organizations also confront challenges of cybersecurity, governance, and regulatory uncertainty. The Crypto Impact and Sustainability Accelerator and Wharton Blockchain and Digital Asset Project have teamed up with an international group of crypto experts, civil society leaders, and builders to examine this nascent, but critical, emerging form…(More)”.
Are blockchains decentralized?
Trail of Bits report: “Blockchains can help push the boundaries of current technology in useful ways. However, to make good risk decisions involving exciting and innovative technologies, people need demonstrable facts that are arrived at through reproducible methods and open data.
We believe the risks inherent in blockchains and cryptocurrencies have been poorly described and are often ignored—or even mocked—by those seeking to cash in on this decade’s gold rush.
In response to recent market turmoil and plummeting prices, proponents of cryptocurrency point to the technology’s fundamentals as sound. Are they?
Over the past year, Trail of Bits was engaged by the Defense Advanced Research Projects Agency (DARPA) to examine the fundamental properties of blockchains and the cybersecurity risks associated with them. DARPA wanted to understand those security assumptions and determine to what degree blockchains are actually decentralized.
To answer DARPA’s question, Trail of Bits researchers performed analyses and meta-analyses of prior academic work and of real-world findings that had never before been aggregated, updating prior research with new data in some cases. They also did novel work, building new tools and pursuing original research.
The resulting report is a 30-thousand-foot view of what’s currently known about blockchain technology. Whether these findings affect financial markets is out of the scope of the report: our work at Trail of Bits is entirely about understanding and mitigating security risk.
The report also contains links to the substantial supporting and analytical materials. Our findings are reproducible, and our research is open-source and freely distributable. So you can dig in for yourself.
Key findings
- Blockchain immutability can be broken not by exploiting cryptographic vulnerabilities, but instead by subverting the properties of a blockchain’s implementations, networking, and consensus protocols. We show that a subset of participants can garner undue, centralized control over the entire system:
- While the encryption used within cryptocurrencies is for all intents and purposes secure, it does not guarantee security, as touted by proponents.
- Bitcoin traffic is unencrypted; any third party on the network route between nodes (e.g., internet service providers, Wi-Fi access point operators, or governments) can observe and choose to drop any messages they wish.
- Tor is now the largest network provider in Bitcoin; just about 55% of Bitcoin nodes were addressable only via Tor (as of March 2022). A malicious Tor exit node can modify or drop traffic….(More)”
Governance and societal impact of
blockchain-based self-sovereign identities
Paper by Rachel Benchaya Gans, Jolien Ubacht, and Marijn Janssen: “Traditionally, governments and companies store data to identify persons for services provision and interactions. The rise of self-sovereign identities (SSIs) based on blockchain technologies provides individuals with ownership and control over their personal data and allows them to share their data with others using a sort of “digital safe.” Fundamentally, people have the sole ownership of their identity data and control when and how it is shared, protecting their privacy. As these data need to be validated to be trusted, they may become a more important data source for digital information sharing and transactions than the formal source of identity controlled by governments. Furthermore, SSIs can be used for interacting digitally with any organization. These developments change the relationship between government, companies, and individuals. We explore information sharing and governance in the digital society using blockchain-based SSIs. In addition, the impact of SSIs on data storage in the digital world is assessed. Technology enactment might result in no greater control or privacy and might only reinforce current practices. Finally, we argue that regulation and a combination of centralized and decentralized governance are still required to avoid misuse and ensure that envisaged benefits are realized…(More)”.