The news is full of wild promises made by supporters of the blockchain and the exaggerated suspicions of his opponents. By enabling the creation of cryptocurrencies like bitcoins, ether and XRPs, blockchains have made some people fabulously rich while, at times, facilitating fraud and money laundering. Although the technology is still in its early stages, we can attest – not least, because one of us serves on the advice of a financial technology company that has developed one of these cryptocurrencies – which has enormous potential.
But so far, little has been written about the potential uses of the blockchain in the national security space, where blockchain technology could be enormously useful. If mistreated, however, it could also represent dangers. To maximize the former and mitigate the latter, it would be wise for the United States to take advantage of the initial technological advantage before competitors inevitably achieve. Fortunately, there are myriad ways to do it.
First, a brief introduction to basic technology: the blockchain is a decentralized ledger distributed through a network of computers, or nodes, that records transactions in real time. Adds new and unique "blocks" to a "chain" after transactions have been verified through consent through the network. In simple terms, if Bob pays Jen, every computer on the network will receive a detailed transaction log, with sensitive encrypted information, and will then verify that Bob has sufficient funds and has not spent it elsewhere. After being confirmed, the transaction is permanently added to a block of other verified transactions linked to the end of the chain, making it unalterable, easy to track and extremely difficult to forge.
The blockchain is sometimes described as a "system" without trust. "It eliminates the need for banks or other intermediaries, because each node verifies and strengthens every transaction, recording a chronology that is both public and immutable. users and, in some cases, increases speed and efficiency, although many blockchains (such as bitcoin and ethereum) can currently process only a fraction of the number of transactions per second that may be the main credit card companies, efforts are being made to accelerate the process.
Blockchains could revolutionize industries including financial services, health care, data archiving and enterprise supply chain management, and also have important applications for national security.
Blockchains, for example, could change supply chain management for defense contracts. The main reasons for the Defense Department's new defense systems are that the components are manufactured all over the world, so it is possible that suppliers close to a foreign government can install undetectable backdoors for espionage. Faulty microchips or spyware skulking are real risks in today's opaque global supply chains. The accurate and detailed ledger of the blockchain could reduce these risks by tracking down what each subcontractor provides and ensuring that each component is traceable. For example, if a microchip is produced in China for an airplane's flight computer, a Department of Defense auditor may see who created it, when it was installed and how it was modified. Each action would be added to the blockchain, providing a detailed and unalterable chronology of the contract.
Blockchains could also safely manage the identification of government contractors and employees. Anyone who has requested a security clearance knows how complicated it is and on paper. With the blockchain, the personal information collected during a security screening could be verified, disaggregated and encrypted, inserted in a blockchain, after which the original data could be deleted from all the individual servers. Individuals would have greater control over who can access what aspects of their personal information by attaching permissions to specific elements of their encrypted digital ID. For example, an individual could allow a potential employer access to specific social security information while providing only one driver's license number to another. As complete personal data would no longer be stored on a central server, hackers such as the United States Office of Personnel Management in 2015 could become a thing of the past and blockchain would minimize the risks of theft and manipulation of identities.  The government could also use blockchain to protect inter-agency communications and improve digital record keeping. Instead of storing key information in the archives of a single agency, the blockchain would provide a decentralized database that many agencies could access. For example, in a multi-agency law attack, an FBI investigator could add new evidence to a joint blockchain, which is marked with a timestamp, digitally signed and instantly shared among all authorized entities. Someone like Colonel Chelsea Manning could easily be prevented from accessing all State Department cables because he clearly did not "need to know". The blockchain eliminates the need to obtain permissions whenever an agency requires access to data and makes it transparent to who access to what.
In cybersecurity, the distributed and immutable nature of blockchain would allow for quick recognition of hacks and timely responses. Since each block in a chain is encrypted with its own unique identifier (or "hash") along with that of the previous block, it is impossible to manipulate any block without modifying each successive block in the chain. To do this would require an enormous computing power and would be immediately apparent for every node in the system. It is therefore much easier to detect an attack and to quickly identify how the data is manipulated.
There are, of course, certain obstacles and potential disadvantages in the use of blockchains in the world of national security . Even more than with other revolutionary technologies, blockchains are still an internationally ungoverned space. Where academic researchers in most of the United States have dominated the early days of the Internet, blockchains are truly cross-border, with millions of participants around the world. The first fraudulent offers of coins and other rich quick schemes have already created confusion and may even hinder further innovation.
While the blockchain is encrypted, it is vulnerable where it encounters the real world and human error can occur. A blockchain ledger is still only as secure as the hardware security modules that protect its digital access keys. Cryptocurrency attacks have become common and it is thought that up to a third of all bitcoins are missing. A hack on a single node will not compromise a widely distributed system, but if the network is concentrated in some large mining operations, another etherum hit may occur. To strengthen network security and be deployable on a large scale, as in the case of a government agency, industry leaders should coordinate and develop a more complete blockchain security architecture. In addition to the confusion, larger blockchains can be very slow and insecure, so companies are creating an increasing number of private blockchains. This leads to a proliferation of isolated networks and incompatible technologies.
The US government does not need to wait for these uncertainties to be resolved to make the blockchain a useful tool for national security. Even if the government would stifle innovation if it were quick to regulate the quality standards for blockchains, it would be wise to help the best technologies win by investing in them and by encouraging defense contractors to build on the most stable, safe and fast platforms. . The government can also discourage contractors from constructing inefficiently and less secure "work trials" that use huge amounts of energy and have a negative impact on the environment.
The government should also promote active competition and emphasize aspects of public use of blockchain through small investments and grants. DARPA has already begun to contract start-ups to research the applicability of blockchain technology for secure storage of weapons and encrypted communications. DIUx, the Pentagon's technology incubator and In-Q-Tel based on the CIA should follow the example. Promising programs have also started at the state level. For example, Delaware commissioned start-ups to develop a blockchain for contracts and securely archive archival records. These partnerships help to distribute the cost of research and development and strengthen the links between federal agencies and the best and brightest in Silicon Valley. They also help to build public trust in the blockchain.
In addition, the government can persuade the industry to adopt quality standards and best practices. A federal "regulatory sandbox" would allow companies to test their technologies in a controlled environment while government regulators establish an appropriate regulatory framework. Canada launched such a sandbox in 2017, which provided limited-time registrations for blockchain companies ensuring consumer privacy and other protections.
If the United States is stuck too long, rival governments that invest heavily in the research and development of blockchain can co-opt industry and set their own standards. Lichtenstein and Malta are the first minds in creating legal frameworks for the blockchain. In July, Malta approved three laws that set internal governance requirements and certification procedures to better protect both consumers and businesses. While nobody is worried about Malta and Lichtenstein, it would be useless if China, Russia or other antagonistic governments to the United States set the standards in this new and critical technology. That's why US companies and lawmakers must work quickly to maintain a leading role in blockchain technology.