February 5, 2023

Sinyalisleme

Best Technology Perfection

Blockchain: Disruptive Innovation for Defence Transformation

Introduction

Blockchain is regarded
by some technologists as the most important invention since the internet. On
the other hand, many cynical observers think that Blockchain is a solution in
search of a problem. However, its enthusiastic supporters think that it’s a technology
capable of resolving many commercial issues such as transaction friction, data
security and governance. Blockchain is a shared, distributed ledger that
facilitates the process of recording transactions and tracking assets in a
business network. Virtually any tangible asset such as houses or cars, or intangible such
as patents and copyrights, can be tracked and traded on a blockchain network. Blockchain
technology not only enables radically new business models, but also enhances
legacy systems by reducing down-time, increasing security, and much more. The
speed of adoption across many industries have been unparalleled, including
within Central Banks, however there is still many aspects to be investigated
before full adoption.

The
opportunity for introduction within the Military environment is currently a
topic of discussion amongst all major nations. Military operations are prone to
centralised control due to reliance on ad hoc networks such as battlefield
management systems. Most of such existing technologies are based on
centralised control, ensuring data security and measured transparency, however
centralised control is also prone to single point of failure. Consequently, the
Distributed Ledger Technology (DLT) available on the blockchain can be
beneficial to the Military. Firstly, its structure ensures availability and
reduced cost. Secondly its resilience, security and immutability support data
provenance and integrity and is a strong a strong asset for military
applications in both operational and support roles.

Blockchain Overview

Blockchain is a form of DLT that records and verifies all transactions using peer-to-peer networks to
establish distributed consensus, eliminating single points of failure. The underlying
technologies which are the foundation of blockchain are distributed computing
and cryptography. Bitcoin, the first widespread implementation of a Blockchain
DLT, was introduced in 2008 by a researcher under the pseudonym Satoshi
Nakamoto. Blockchain is a sequence of blocks, which holds a complete list of
transaction records like conventional public ledgers. Data is immutable and
auditable as each transaction is linked and a copy of the ledger is held by
each member of the network. This design means that the network is difficult to
hack, requiring enormous quantities of computing power. This inherent security
lends itself to some critical applications within defence:

•                 
Supply Chains

•                 
Identity Management

•                 
Communications

•                 
Cyber Defence

Byzantine Generals Problem

Centralised ledgers which are currently used in all organisations now are regarded as not perfect because record-keepers are not always trustworthy, act as gatekeepers and represent a Single Point of Failure (SPoF). In a distributed ledger system, however, the problem of trust, with no central control to enforce rules means that the participants may fail to reach consensus due to technical failures or misinformation. As the number of the participants in the system increases, the number of channels for communication (and opportunities for mistrust) increases exponentially. 

Consensus Mechanism

Consensus mechanisms are used in blockchain to
manage all the participating nodes that process transactions on the network. It
makes sure that all the nodes on the network are synchronized with each other
and agree on one consensus in which the transaction is legitimate and then
added to the blockchain.  Blockchain uses
12 different types of consensus algorithms with the main two being Proof of
Work and Proof of Stake.

Fig.1 Proof of Work vs Proof of Stake

Types of Blockchains

One of the major uniqueness of Blockchain is that
it is adaptive, and can be integrated into every industry by adapting to the
specific model the industry operates in.

·       Public
blockchain – This can be read by anyone in the world and is considered fully
decentralised.

·       Private
(Permissioned) blockchain – This type differs from public blockchains in three
notable ways: 1) Permission must be granted to participants to join the
networks. 2) Transactions are private and are only available to permitted
participants, 3) They are more centralised than public blockchains. Primarily
useful for organisations that want to collaborate and share data but don’t want
their sensitive business data visible on a public blockchain. This type of
blockchain would seem best suited to be adopted in the defence sector, given
the nature and sensitivity of the information generated and stored.

·       Consortium
blockchain or federated blockchain – These are sometimes considered a separate
designation from private blockchains as the main difference is that consortium
blockchains are governed by a group rather than a single entity.

·       Hybrid
blockchain – Hybrid blockchains are blockchains that are controlled by a single
organization, but with a level of oversight performed by the public blockchain,
which is required to perform certain transaction validations.

Digital Transformation for Operational Advantage

Military networks and intelligence systems are made
up of a wide range of networked processes which stand to benefit from the
immutable, decentralised ledger at blockchain technology’s core. Defence can
leverage DLTs for multi-domain command and control, acceleration of
procurement, management of mobile device assets, enhancement of supply chains,
and additive manufacturing, including the manufacture of aircraft and other
parts.  Blockchain can bring trust and transparency to the construction and maintenance of physical assets by tracking the origination and entire supply chain of each part. DLTs also provide cybersecurity solutions for access monitoring, authenticity, and provenance of data, and can be used to increase the speed, automation, and coordination of any activity across the Department, including automation of the chain of command for authorising signatories for operational logistics and the onboarding and transfer of personnel. This will support the future
operating model concept to build a more capable and resilient Defence Support
Network that enables enhanced decision-making and effective delivery of defence
support.

Fig.2 Future Operational Model

Access and Identity Management

The defence sector can spend weeks on processes,
such as updating a contractor’s access to sites and IT, only to have to repeat
the process when they need to work elsewhere. Blockchain can reduce these
problems by working alongside existing directories and databases
using Signature Chains to act as a personal blockchain for each user.
This helps generate digital identities and ensures all documentation, access rights
and vetting are recorded. This then eliminates the need for any repetition and
management of access rights, making change requests almost instantaneous.

Cyber defence and data integrity

A recent enterprise security survey report shows
that 52% of cyber security professionals do not have continuous visibility on
their risk area, which is, therefore, one of the significant difficulties in
treating threats. By improving data visibility, blockchain provides greater
security for defence given the rapid digital transformation taking place
creating huge amounts of data.  Excessive
data can create challenges in terms of proper capability for efficient
processing. This can cause disruptions when attempting to deal with threats. In
a blockchain, the data’s history is shown from generation to process,
transformation and ending. Therefore, all participants can see who generated or
who processed data. Such visibility creates opportunities to easily locate
threats in the early stages and develop systems to eradicate them quickly.

Supply Chain Risk Management

Defence supply chains are complex, with the
transport of equipment and personnel in difficult terrains across the globe.
The lack of visibility and cyber resilience across the tiers in these supply
chains is recognised as one of the biggest threats facing the sector today. For
example, transportation of medical devices starts with the supplier(s) before
transit through defence delivery organisations  for transport to an
overseas base, before the onward journey to the end user on operations. During
this process, there are a series of critical points where the process could
fail and where there are opportunities for manipulation. Blockchain
applications not only address these issues, but they also offer a more secure
record for supply chain management and enable greater auditability and
real-time identification of responsibility.

Communications

Blockchain offers resilient communications in the
event of a high-end conflict. Blockchain applications can be introduced in the
event of an attack on the electromagnetic spectrum and secure critical
communication systems such as satellites, undersea cables, or tactical data
links.

Fig 3. Blockchain Communications Network

Applied to secure messaging systems, blockchain’s
cryptographic encryption techniques would permit the implementation of a
measure of automation that could reduce costs and improve both inter-agency and
in-field communications.  Blockchain
provides verifiability through hashing which enables devices to coordinate
behaviour in milliseconds. Using a blockchain database architecture, Naval
onboard combat systems can be built around decentralised decision-making nodes,
increasing control whilst improving survivability. An onboard
blockchain-powered internet of things could keep functioning in a coordinated
way even when the central computers go down.

Future Opportunities

During the STEM Awards 2019 Defence Technology
Challenge, the winning idea proposed the use of blockchain to create hackproof communications
between military systems on the battlefield. The idea was built on the
proposition that wars will be won or lost by information, and military
communication must be impenetrable and secure. However, a network is only as
safe as its weakest link, therefore every military asset in the field is at
risk if communications are compromised. Currently, several use cases are being
investigated by the Defence Science and Technology Laboratory (DSTL) including
logistics/supply chain, data provenance and record keeping, and notarization.

In the longer term, the ‘smart contract’ driven
Blockchain/DLT applications were identified as a potential area of future
utility such as semi-automated contracting and/or transparently bidding for
work, procurement fund management, due diligence management, and financial
tracking were identified as promising areas for defence to maintain awareness
of. However, given that this is still classified as an emerging technology, the
recommendation has been to adopt a ‘wait and see approach to compare cost
versus benefits.

Fig 4. Military Blockchain Use Cases

The United States military is increasingly
interested in blockchain applications. In the $700 billion 2019 annual defence
budget, blockchain is mentioned by name. In terms of practical applications,
the US Defence Advanced Research Projects Agency (DARPA) is working on
weaponising blockchain. The U.S Navy has adopted a framework to leverage
technology such as Artificial Intelligence, the Internet of Things, predictive
analytics, and blockchain. The main area of concern for DARPA is data integrity
systems, meaning ensuring that data are still in their original state, and
seeing who has viewed these data. As such, DARPA has launched several projects
related to blockchain to be used in several military domains such as secured
hardware systems and quick military logistics including the creation of a
secured communication network using blockchain.

Supply Chain Management processes, which are often
hacked to alter or infect data within the process, are also another use case
where blockchain may be useful. Consequently, DARPA is working on using
blockchain to secure the US defence supply chains from cyber-attacks. The US
Army’s Space and Terrestrial Communications Directorate is also turning to
blockchain to monitor potential cybersecurity breaches in communications data.

Disruptive Innovation

Blockchain’s potential for disruption is clear and
is an innovation which represents a viable catalyst for achieving the United
Nations’ global sustainable development targets. As such, there are now
numerous projects and initiatives seeking to utilise the technology for the
benefit of for‐profit
businesses, governments, and consumers with estimates that business value-added
will exceed USD$176 billion by 2025 and USD$3.1 trillion by 2030. It is set to
play a significant role in the ways that humanity tackles some of its most
urgent sustainability challenges due to its ability to decentralise, store, and
trace irrevocable transactions which could create unforeseen value across
almost every industry.

Fig 5. Blockchain and Decentralisation

Blockchain has already made significant waves in
the financial sector, and although use cases for the technology’s ability to
support environmental, sustainability, and governance goals may still be in
their nascent stages, organisations that have leveraged blockchain in their
sustainability efforts have seen notable early success. Blockchain promises to
overcome these critical aspects, representing ‘‘a shift from trusting people to
trusting math’’ since human interventions are no longer necessary. Already,
through the evolution of different types of blockchain protocols such as
Ethereum which makes smart contracts possible, a vast ecosystem of
Decentralised Applications (DApps) is being created and disrupting industries
such as Trade Finance, Law, Real Estate, Investment Banking, Central Banks, and
others.

Fig 6. Real World Use Cases of Blockchain (WEF, 2020)

The World Economic Forum has highlighted the
potential for the technology to build resilient and transparent supply chains,
to create stronger and more accountable public institutions and to spur
responsible sourcing and sustainable consumption of goods and services.
Blockchain-enabled projects refer to a sharing and solidarity economy built on
digital identity to enable social inclusion, elections and political
participation, identity management, individual rights, data privacy,
co-creative and crowdfunding scientific and cultural activities.

Conclusion

Blockchain technology is currently at the same
stage of adoption and usage as the internet was in the same cycle. The current
state of innovation and entrepreneurship to address many of the initial
problems is increasing the number of applications available to every industry
currently utilising a centralised ledger. Blockchain by itself may not be a
panacea to industry or global problems, however, the interaction with
Artificial intelligence and Internet of Things devices has the potential to
transform society. The opportunities far outweigh the perceived costs of
introduction and a ‘wait and see approach may result in competitors gaining a
competitive advantage. In an increasingly Volatile, Uncertain, Complex,
Ambiguous and Digitally Disruptive (VUCAD) world, it may be preferable to fail
fast and learn faster, particularly in matters of defence and security.

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