What Network Engineers Should Know About Blockchain

 Blockchain is the distributed ledger technology that became famous, or infamous depending on your view, for powering bitcoin. Bitcoin allows people to exchange currency online without using banks or other middlemen. Bitcoin was the first blockchain application. But the possibilities for using the technology are endless.

Blumer envisions blockchain enabling what he calls “open-source companies.” He gives the example of Steemit.com, a publishing site where writers post their stories and advertisers soon will be able to purchase ad spots directly from the writers. Transactions will be handled through blockchain “tokens.” The more popular stories garner the most tokens, resulting in more money for the writers of those stories.

“It’s a biological business,” said Blumer. “Steemit has over a $200 million market cap,” Blumer claimed. He said traditional companies will find it hard to compete against these new kinds of companies.

Tempering the enthusiasm a bit, the description of Steemit on Wikipedia is more measured. It says some critics think that Steemit is akin to a Ponzi scheme. So while the jury is still out in terms of currency-related uses of blockchain, the technology is being taken very seriously for other use cases.

An article in the Harvard Business Review said of blockchain, “In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary. Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.”

But how might these new kinds of business paradigms affect the underlying resources of compute, storage, and networking that handle digital transactions?

How Blockchain Works

In a blockchain distributed database, every digital transaction is agreed to by a consensus of the participants. The transaction is then time-stamped and becomes a block in a chain of blocks. All transactions are signed and replicated across the network. If a change is made in one copy of a block, all the other copies are simultaneously updated. Thus, the blockchain contains a true record of each transaction ever made. And it’s virtually impossible to hack.

“If a hacker tried to change anything he’d not only have to re-write all transactions but he’d have to replicate them across the entire network, concurrently,” said Anoop Nannra, a senior leader of Cisco’s strategic innovation group.

All of this consensus processing and data replication can require an enormous amount of compute and storage resources. In the case of bitcoin, the underlying blockchain technology has run into problems with time delays as it attempts to transact cryptocurrencies worldwide.

But there are a lot of other possibilities for blockchain within more contained networks. Financial services is an obvious use case. The Harvard Business Review cited Nasdaq as an example. It’s working with Chain.com to use blockchain for processing and validating financial transactions within its own private cloud.

Financial transactions require a lot of steps, explained Raphael Davison, global director of blockchain at Hewlett Packard Enterprise (HPE). A typical credit card transaction today requires 16 steps, it involves seven parties, and it takes seven days, said Davison. With blockchain the same transaction can be reduced to two parties and take less than one hour.

Nannra said there are still server, storage, and networking gear requirements to run the blockchain stack, “but we’re evolving to more enterprise-network, permission-based” scenarios.

Blockchain Use Cases

At the HPE Discover conference in Las Vegas last week, Vincent Melvin, CIO of Arrow Electronics, said, “We sort of sit in the middle of suppliers of electrical components. While I have a huge piece of information about the electronics supply chain, I don’t have all of it. Blockchain, with womb-to-tomb around the electronics lifecycle, would be hugely disruptive to the supply chain that we have today.”

In fact, tracking assets in a supply chain or validating the accuracy of data are both big first use cases for blockchain.

Ericsson has already created a product — the Ericsson Data Centric Security — that validates data, using blockchain to “create trust in data,” said Erik Forsgren, a director of portfolio management at Ericsson.

Forsgren said many organizations share data across clouds, and they need to ensure they’re dealing with accurate data. Already, data is secured in some way, but it’s still vulnerable to being hacked or compromised. Ericsson’s product uses blockchain to “fingerprint” data. “The only thing we’re adding to our blockchain is the data signature,” Forsgren said. “The data can still reside in its application. The value is the security of the audit chain.”

Smita Deshpande, a marketing manager for Ericsson, added, “The blockchain does not store the data; there are no issues about privacy. It only stores the signature.”

Ericsson is already running its Data Centric Security on the GE Predix Internet of Things (IoT) platform. “That’s an ideal type of use case,” said Forsgren. “In the GE case, they have different types of turbines and utilities with software updates. You need to verify these updates come from a trusted source.”

Another possible use for blockchain is to track, log, and store metrics about the health of networks, themselves. Cisco’s Nannra posted a blog about how blockchain could be used to verify the aspects of fault, configuration, account, performance, and security management (FCAPS) in a network.

 

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3 Responses

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