SPEAKER:

How can Blockchainamplify Digital IdentifiersImproving Data Persistence, Openness and Trust in the modern world.

Dr Mirek SopekMakoLab SA, Poland

Presentation plan

Digital Identifiers and their challenges

Why Blockchain?

The concept of using Blockchain 2.0 Smart Contracts for Digital Identifiers

Building Blockchain based system for LEI – our POC

Lessons learned from the POC

Possibility for radically new LEI system

Conclusions

Digital Identifiers and their challenges

UniquenessOpenness Decentralization Non-repudiation

ResilienceAuthenticity Neutrality Persistence

Digital Identifiers Examples

Legal Entity Identifiers (GLEIF)LEI

International Securities Identification Number (ANNA)ISIN

Financial Instrument Global Identifier (Bloomberg)FIGI

Unique Product/Transaction Identifiers (CMPI – BIS)UPI, UTI

Companies Registration Numbers/VAT (Various National Agencies, Registrars)CRN, VAT

Electronic Product Codes, European Article Numbering (GS1 - EAN UCC)EPC, EAN

Vehicle Identification Number (Automotive Manufacturers)VIN

WHY

?

The most important features of Blockchain explained along three fundamental axes.

Decentralized exchange medium for moving value and

trusted data between participants.

A new, trusted way for contractual transactions

not requiring intermediary assistance.

Massively distributed ledger-type tamper resistant database. Technology Business

Law

Why is Blockchain a game changer for Digital IDs ?

Trust Data openness Uniqueness Decentralization Non-repudiation Authenticity Resilience and persistence Neutrality warranted by independence from any form of technological or

organizational frames.

guaranteed by mathematics and algorithmic consensus supported by replication technology

ensured by the associated algorithms guaranteed by the system architecture ensured by data immutability

guaranteed by consensus mechanisms ensured by total system distributivity

Blockchain - a metaphor

Open Data carved in stone

Existing uses of Blockchain for Identifiers

Blockstack …the first implementation of a decentralized DNS system on top of the Bitcoin blockchain”

Namecoin The cryptocurrency with applications for naming ( .bit domain)

… and more: ShoCard, Hypr, BlockAuth (Neuroware), CryptID …

Blockchain evolution

Bitcoin and other Crypto Currencies“The deployment of cryptocurrencies”

Quotations from: “Blockchain” by Melanie Swan, O'Reilly Media, Inc.

Contracts and Identities“The entire slate of economic, market, and financial applications using the blockchain that are more extensive than simple cash transactions”

Applications “Beyond currency, finance, and markets”Blockchain 3.0

Blockchain 2.0

Blockchain 1.0

The idea of using Blockchain 2.0 Smart

Contractsfor Identification Services

Blockchain 2.0 Smart Contracts for IdentificationServices. I - The central tenet

A record for entity to be identified by some KEY

is "atomic" and is curated* as a single unit of data.

The representation of a single “atomic” record is

defined as a state of a single smart contract.

* by the authority that assigns the KEYs.

Blockchain 2.0 Smart Contracts for IdentificationServices. II – The Entity Contract

Contracts offer methods for accessing the representation, and a data structure that holds

its "revisions".

If a record changes globally, its new representation would be added to the state of the

contract.

Blockchain 2.0 Smart Contracts for IdentificationServices. III - Architecture

The suggested architecture for the Digital Identifiers on the blockchain is:Consortium blockchainssometimes called also:„Permissioned blockchains”

Vitalik Buterin - https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

Blockchain 2.0 Smart Contracts for IdentificationServices. IV – Consensus mechanisms

The most suitable for Digital Identifiers: PoA - Proof of authority. Proof-of-Authority chains utilize a number of secret keys (authorities) to collaborate and create the longest chain instead of the public proof-of-work scheme.

TurboEthereum supports PoA private chains through the Fluidity Core Ethereum client. Ethcore Parity is building PoA into its High-performance & low-footprint Ethereum client.

BuildingBlockchain based system

for LEI

LEI – Legal Entity Identifier

The Legal Entity Identifier (LEI) is an alpha-numeric code based on the ISO 17442.

LEI connects to key reference information that enables clear and unique identification of legal entities participating in financial transactions.

Publicly available LEI data pool forms a global directory, which enhances transparency in the global marketplace.

www.gleif.org

Step I – Creating LEI Resolver – LEI.INFO

5493001KJTIIGC8Y1R12 http://lei.info/5493001KJTIIGC8Y1R12

Visual for HumanWeb Media (HTML)

Data for Machine consumption (RDF)

Picture for Paper Media (QR-Code)

1 Create URI

LEI.INFOi

2 http://lei.info/5493001KJTIIGC8Y1R12

Step II – Adding attractive UX on all devices

Visual for Human Web Media (HTML)2 http://lei.info/5493001KJTIIGC8Y1R12

Step III – Generating Data for machine consumption

Data for Machine consumption

The data can be returned in multiple formats:

2 http://lei.info/5493001KJTIIGC8Y1R12

Step IV – defining data semantics - GLEIO

GLEIO OntologyLightweight ontology describing LEI Level 1Adding LEI temporal aspectsAward winning – FOIS 2016LEI Level 2 readyhttp://lei.info/gleio

The fundamental principles for the POC 1.0:

Modelling a small consortium blockchain (only 3 nodes for the POC 1.0)

Using private Ethereum as smart contract platform (distributed cluster)

Three LOUs (Local Operating Units) modelled

LEIs expressed as JSON-LD objects

Human Interface build as a Web Application

Step V – Blockchain Proof of Concept (1.0)

POC 1.0 Web interface

http://leiblc.mm.com.pl/POC.html

POC 1.0 Web interface and JSON-LD LEI representation

Step VI – MakoLab POC 2.0

Representing entire current LEI dataset(0.5 M records) on the Ethereum blockchain

Using GLEIO Ontology for data semantics (as external resource)

New UI – similar to LEI resolver New, more powerful backoffice

(using .NET technology) New, secure (blockchain-based) methods

for cache protection

Extras: Embedding Ontology into the Blockchain Since Blockchain is a state machine … … Ontology can not be an external object to the Blockchain It must be embedded into the Blockchain - We have invented a method how to do it.

contract Class { address public subClassOf; string public label; string public comment; function Class(address _subClassOf, string _label, string _comment) { subClassOf = _subClassOf; label = _label; comment = _comment; }}contract Instance { address public isA; //address of Class contract describing entity } contract LeiRecord is Instance { struct Revision {

bytes data;

Solidity contracts

OWL Ontology

Lessons Learned from the LEI POCs

Ethereum is a very good platform for building Blockchain based system for Digital Identifiers

However, Blockchain software is not enough to build a fully functional identification system

The need for indexing and caching is important (access time to LEI data varied between few hundreds ms to ~2 seconds depending on the number of LEI record revisions)

Lessons Learned from the LEI POCs

Index and cache security is important POW difficulty can be easily adjusted (low for initial blockchain creation, higher

for new entries and updates) Semantic Layer is needed for adding meaning to smart contracts

(e.g. GLEIO Ontology for LEI) – next on our POC but … … we need a method to embed Ontology into the Blockchain

Results: Possibility for radically new LEI system

Large Consortium Blockchain with Proof-Of-Authority consensus mechanism Extending capacity of registration beyond LOUs (adding registrars) Enabling Legal Entities’ full ownership of their LEIs through Multisignatures

(the block with its LEI is signed by both the authority and the Entity)

Results: Possibility for radically new LEI system

GLEIFBody responsible for

application of global uniform standards

LOU

LOU

LOU

LOU

LOU

LOULOU

LOU

LOU

LOU

Legal Entitiesregistrars

LOU Local Operating Units

LOU

What is next?

Next steps in our Blockchain research will include: Replacing POW (Proof-of-Work) by PoA (Proof-of-Authority) Modelling and testing a very large distributed system Further work on Ontology Embedding and data semantics Building interfaces for LEI Authorities Testing Multisignatures for LEI registration

Conclusions

Blockchain technology is the ideal choice for Digital Identifiers working in the public space

Blockchain offers non-repudiation, persistence, fault-tolerant operation, security (authenticity), trust and low-cost decentralized management

For Identifiers assigned by distributed system of affiliated organizations (like LOUs and registrars) – the consortium Blockchains form the ideal organizational framework

Combining PoA – Proof-Of-Authority with Mulitisignatures creates possibilities for the strong LEI identifier ownership model creating radically new LEI system

Contact

Dominik KuzińskiMakoLab SA Rzgowska 3093-172 Łódź Poland

dominik.kuzinski@makolab.com

Brandon PateMakoLab USA Inc.20 West University Ave.,Gainesville, FL 32601USA

brandon.pate@makolab.com

Mirek SopekMakoLab SA Demokratyczna 4693-430 Lodz Poland

+48 600 814 537sopek@makolab.com