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Trying to hitchhike to get to your destination.

This is the fourth in a series of blog entries about the concept of blockchain.
Blockchain is a decentralised database that keeps track of all transactions between participants in the system.
Blockchains are intended to help sellers and buyers, for instance:

1. Counterfeits can be prevented from entering a company’s supply chain, and
2. Consumer scams can be stopped before they begin.

♥ READ about blockchain in German and on the Vault Security Systems blog

Blockchain possibilities

Nakamoto (pseudonym) stated that the objective of a blockchain was to provide users with:

an electronic payment system based on cryptographic proof instead of trust.

Interesting read: Nakamoto, S. (2008). Bitcoin, a peer-to-peer electronic cash system. Retrieved March 5, 2019 from https://bitcoin.org/bitcoin.pdf

The scope of use for such peer-to-peer crypto-currency platforms has grown considerably. Since the beginning, most blockchains have included five elements:

1. Anonymity of the blockchain’s users. This is accomplished by use of a public / private key pair. Each user of the blockchain is identified by the public key. Authentication is then completed by signing with the private key. This is neither a new procedure nor invented by blockchain.

2. Distributed but centralised ledger. Several transactions are stored together in what is called a block. Each block contains a part of the digital signature or hash of the following transaction.
The network of nodes (i.e. many computers) guarantee a unique order of transactions – for example, how they happened according to the timestamp, and validate the block of transactions.
The ledger contains all blocks of transactions. Once it is published on the network, it is immutable.

3. Consensus algorithm for mining (i.e. process of adding transaction records). This is a way to ensure all the copies of the ledger are the same. Each transaction must be approved by members of the community. Transactions are accepted when consensus between validating nodes has been reached.
This is expensive because it requires a lot of data storage and energy to maintain the system.

4. Single purpose focused. For instance, Bitcoin performs a single purpose only, i.e. to sell and trade its tokens. Such blockchains do not contain programming features to allow solving computational problems. The latter enables the blockchain to be used in a multi-purpose setting.

5. Trading of tokens. Tokens are used, for instance, to pay people who run mining operations that require much energy (see point 3). Investors or speculators buy and sell tokens to benefit from market up- or down-swings.
Transactions involving these tokens are stored on the ledger.

The above describes a blockchain such as the one used by Bitcoin to allow the trading of tokens. Its purpose is to maintain a ledger that accounts for who owns how many tokens. Moreover,

    1. owners of these coins remain anonymous,
    2. transactions cannot be reversed once they haven been executed, and
    3. if one loses one’s private cryptographic key, the tokens cannot be recovered – i.e. they are ‘lost’.

Interesting read: Apple co-founder Steve Wozniak discovered that point 2 applies when he had $70,000 in Bitcoin stolen after falling for a simple, yet perfect, scam.

Lots of experts do not like such single purpose platforms, especially if they focus on trading tokens only. For instance, Bruce Scheiner wrote in February 2019:

“Honestly, cryptocurrencies are useless. They’re only used by speculators looking for quick riches, people who don’t like government backed currencies, and criminals who want a black-market way to exchange money.”

Blockchain - a single one will not do.

Blockchain – a single one will not do.

What now?

The above illustrates that single-purpose blockchains may not be that useful to businesses to protect their supply chain or provide additional data services to their clients. To illustrate, in the enterprise or global trade context, programming features need to be offered in order to process various computational problems in the blockchain.

watch the WEF Davos interview on bloxlive.tv here

Another reason why single purpose blockchains are not useful for companies is that if clients have an issue, nobody is there to mediate the dispute. In most business applications, it seems most feasible to implement a combination of features of a consortium / private-type blockchain to better protect and manage data, as well as goods and services being traded.

Table 2 – Checklist: Deployment Models for a Blockchain
Type Access Key Characteristics Typical Use Cases
Public Unrestricted Distributed (multiple copies, immutable), consensus algorithm and currency (i.e. token) Cryptocurrencies,   general purpose
Consortium Restricted to consortium members (public may have read-only access) Immutable and distributed Consortium-specific cases, such as trade between members
Private Restricted to single entity, read-only access can be public / unrestricted Internal audit, database management, supply chain within corporation and its subsidiaries

Note. Adapted and expanded upon from Uhlmann, Sacha (2017). Reducing counterfeit products with blockchains. Master Thesis, Univ. of Zurich. Accessed 2019-01 at https://www.merlin.uzh.ch/contributionDocument/download/10024

Case 1

To illustrate, a replacement part is shipped from the original manufacturer. Each time the part enters the warehouse of the next party in the distribution chain, this is added to the block of transactions (e.g., wholesaler, importer). The final transaction occurs when the mechanic replaces the defective part in the car with the new, genuine one. Once this final transaction is stored on the block, the block is completed and digitally signed. The block is now ‘closed’.

With this block of transactions, the car owner now has proof that the defective part was replaced with a genuine one – not a fake. On this blockchain, both parts are being tracked, as well as work provided by the car dealer and the repair shop. Reselling and other car servicing data will also be stored on the blockchain.

In short, a single purpose blockchain will not be the best strategy. Only a multi-functional one will permit all these different types of transactions to be stored safely on the blockchain.

Interesting read:  Tabora, Vince (2018-08-04). A blockchain is a database, unfortunately a database is not a blockchain explains differences nicely.

Remind me when I have to take my car in for service. Original parts only...

Remind me when I have to take my car in for service. Original parts only…

What is your opinion?

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Distributed ledger technologies are collectively known as blockchain. Blockchain is a decentralised database that keeps track of all transactions between participants in the system. Several transactions are stored together in what is called a block. These are connected to other blocks in chronological order according to their time stamp.

Any corruption of the chain of transactions after consensus was reached will quickly be discovered, because the corruption of this chain of transactions is visible. This also makes a blockchain very safe against fraudulent activity.

While they offer great opportunities, we have to separate the wheat from the chaff when it comes to blockchain hype. We hope this blog entry helps you in that process.

What do you think?

  • Do you have experience with crypto tokens?
  • Is your company trying to use blockchain technology to make its processes faster, more efficient or transparent for its customers or suppliers?
  • What questions do you have about blockchain?
  • What do you like or dislike about blockchain?

Please share this entry on social media using this link: https://blog.drkpi.com/?p=4904

Leave a comment and share your thoughts.

The author declares that some of the companies mentioned herein are clients of CyTRAP Labs or subscribers of DrKPI® services.

Fake bags being sold at the beach promenade in Barcelona.

This is the third in a series of blog entries about the concept of blockchain. For most of us, the problem is all too familiar: a fire sweeps through someone’s home, reducing their treasures to ashes.

The worst is when that person finds out that, not only have the much-loved treasures (whatever they may be) gone up in flames, so have their documents of ownership, tucked away in a drawer in the same home. Proving their ownership rights to the insurer now becomes considerably harder.

But the same can happen when somebody robs you. As Arman Sarhaddar, CEO of Vault Security Systems AG (with its iVAULT brand of products) explains:

These days, in some places not even your locked and supposedly guarded storage space may be safe. That happened to me – when I returned, my valuables and personal items were gone.

The above example is one case where blockchain can help the consumer, and even the insurer. Many more applications are also feasible. We explain some of the technical issues below.

1. What are we trying to accomplish?

The blockchain can help answer the important questions listed in Table 1 below.

Table 1 – Checklist: What challenges do we solve with the blockchain?
What are we trying to do? What value do we want to capture? For whom is this of use?
Record the transaction Information and knowledge about what changed hands Clients
Track the transaction Attribution and who is responsible Suppliers
Verify the transaction Access to records or permission to view them Manufacturers of goods
Aggregate transaction Ownership Creditors or investors
Reputation and trust Public agencies
Contracts Employees
Transaction ledger

Table. Adapted and expanded upon from Felin, Teppo and Lakhani, Karim (Fall 2018). What problems will you solve with blockchain. MIT Sloan Management Review, p. 36. Retrieved 2018-10-20 from http://sloanreview.mit.edu/x/6015. See also https://blog.drkpi.com/show-me-the-facts-1/

A blockchain attempts to maintain a permanent, trusted database, which the owner, and trusted advisors and manufacturers have access to only with a secure key. In turn, history and proof of purchase, the provenance of works in a collection and all related legal and insurance documents can be held on a blockchain.

However, before you decide to use a blockchain, it helps to address the questions outlined below:

  • Do multiple parties share data?
  • Do multiple parties update data?
  • Is there a requirement for verification?
  • Can intermediaries be removed and reduce cost and complexity?

If you answered yes to three of the above questions, then you have the potential to apply blockchain.

Blockchain technology - What kind of blockchain is best for me?

Blockchain technology – What kind of blockchain is best for me?

2. Privacy

The traditional blockchain paradigm is complete transparency. Business applications, however, need to meet certain privacy criteria.

Not all transactions should be visible to everyone. The reasons for this may range from concerns of commercial confidentiality, to legal requirements.

Regulations, such as Europe’s General Data Protection Regulation (GDPR) simply make it impossible for companies to make all data accessible. Instead, some information, such as a patients ID number, must be protected.

Thus, any enterprise blockchain platform should provide an extensive set of privacy features. Only then, can GDPR compliance be assured (see this resource page from MC Lago – checklists and forms that help)

3. Security

Another requirement, closely related to privacy, is security. Businesses usually need to prevent data theft at all costs. They also need to ensure all actors are clearly identified. Again, this necessity might be imposed by the business case or by regulations.

Thus, enterprise blockchains need to implement authentication features and control who can participate in the network.

Security, Safety, Privacy, and Data Protection: Vaultsecurity.ch to the rescue.

Security, Safety, Privacy, and Data Protection: Vaultsecurity.ch to the rescue.

4. Transaction throughput

As Table 2 below illustrates, public blockchains may have advantages, but transaction throughput and energy consumption levels may not be to everyone’s liking.

Enterprise applications are usually transaction-intense and need to be scaled in terms of transaction throughput.

At the other extreme, public blockchains need to be scaled in terms of the number of nodes that can participate in the consensus protocol.

In most enterprise applications the number of validator nodes can be relatively small: for example, one representative per company participating in the consortium. Thus, transaction throughput can be prioritised.

Hence, enterprise applications may not be public. Instead a combination of features of a consortium / private-type blockchain may be used.

Table 2 – Checklist: Deployment Models for a Blockchain
Access Key Characteristics Typical Use Cases
Public Unrestricted Immutable and distributed Cryptocurrencies,   general purpose
Consortium Restricted to consortium members (public may have read-only access) Immutable and distributed Consortium-specific cases, such as trade between members
Private Restricted to single entity, read-only access can be public / unrestricted Internal audit, database management, supply chain within corporation and its subsidiaries

Note. Adapted and expanded upon from Uhlmann, Sacha (2017). Reducing counterfeit products with blockchains. Master Thesis, Univ. of Zurich. Accessed 2019-01 at https://www.merlin.uzh.ch/contributionDocument/download/10024

By the way, the video below shows in a straightforward way how the blockchain principle can work for you and that its foundations – asymmetric cryptography and distributed systems – have been known for decades by computing science researchers.

Also check out iVAULT on bloxlive.tv – Interview at #WEF2019

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5. What is your opinion?

Distributed ledger technologies are collectively known as blockchain. While they offer great opportunities, we have to separate the wheat from the chaff when it comes to hype. We hope this blog entry helps you in that process.

What interests us, however, is what you think:

  • Do you have experience with crypto tokens?
  • Is your company trying to use blockchain technology to make its processes faster, more efficient or transparent for its customers or suppliers?
  • What questions do you have about blockchain?
  • What do you like or dislike about blockchains?

Please share this entry on social media using this link: https://blog.drkpi.com/?p=1990

Danyele Boland Co-founder of Vault Security Systems AG

In December, we gave you insights into the #iVAULT blockchain, the new brand by Vault Security Systems AG, and the DrKPI production of the first three videos for iVAULT.

Now, we are happy to provide you with an update, available on YouTube, which is an additional clip to introduce you to Danyele Boland. She is the co-founder of Vault Security Systems AG (VSSAG) and as passionate about her business as the rest of the team.

If you need to know more about iVault or the minds behind this idea, read more here:

To stay tuned and get the latest updates on Vault, sign up for our newsletter here. Or subscribe to the iVAULT Newsletter here.

Danyele Boland: “Why I am involved”

iVAULT is a global network for users to register assets, such as lost or stolen property, to search for and identify them on a blockchain. These items can be anything of value to the individual user of the iVAULT blockchain. Companies and businesses, on the other hand, can protect their supply chain against counterfeits and contraband.

Working with Danyele was a special treat. She is a charismatic and intelligent speaker, and it did not take us long to get some great shots, even though she had just arrived from the US.

With years of experience in international sales, human resource management, logistics, and much more, she is an irreplaceable part of the VSSAG team.

In her video, Danyele recalls when Arman Sarhaddar told her about his storage unit getting robbed. He lost some of his most valued belongings. This is how they got the idea to create a platform to secure physical assets such as luxury watches, pieces of art or jewellery, or anything else that is of some value to its owner.

Gain more insights on her perspective and what she tells us about blockchain technology here:

https://youtu.be/LeMDFZ7zD98

What’s your opinion?

iVAULT is the first global network to use blockchain technology for registering and identifying assets (such as lost items or stolen goods). It lets users register their items on the blockchain, search for, and identify them.

So, what do you think?

  • Have you ever used a blockchain?
  • Do you want to try iVAULT, or do you still have some concerns?
  • Have you ever had a problem iVAULT would have immediately solved? You lost something of great value or bought a fake product? It must have been very upsetting. Tell us about it, we’d like to hear your story.

Join in the discussion and leave a comment. We will respond soon.

The author declares that some of the companies mentioned herein are clients of CyTRAP Labs or subscribers of DrKPI® services.
Arman Sarhaddar and Urs E. Gattiker preparing for the iVault video shooting in Zurich

Three new DrKPI videos are out now on YouTube.
Counterfeiting and theft are a global problem that is growing. Billions of dollars of damage are recorded every year.
Here, we explain how you can protect yourself against both counterfeiting and theft using iVAULT.

“Protect what’s yours.” That is exactly what you will be able to do with iVAULT. This new brand was created by Vault Security Systems AG.

This blog entry is about the three videos we created with Arman Sarhaddar, Urs E. Gattiker, and Lothar Rentschler, all engaged in their work for #iVAULT.

If you prefer to read their statements, you can find each of them here:

  1. Urs E. Gattiker, COO: What is a blockchain and what does iVAULT do with this technology?
  2. Arman Sarhaddar, CEO and founder: Why I created iVAULT
  3. Lothar Rentschler, CMO: Initial thoughts on marketing

Read this blog entry in German here.

To stay tuned and get the latest updates on Vault, sign up for our newsletter here.

1. What makes iVAULT special?

Urs E. Gattiker, Chief Operating Officer of Vault Security Systems AG, talks a little bit about the basics:

  1. What is a blockchain?
  2. 4 challenges iVAULT helps clients with.
  3. How does iVAULT ensure that no fakes enter their supply chain?

Remember when your club or association kept a petty cash book or ledger on paper? Each record was entered by hand, and then we started doing it all with accounting software, possibly customised for use in associations.

To be sure things were done properly, we probably had two club members act as auditors. They checked the books, including petty cash, and reported back to the other members at the annual meeting.

This is much easier with iVAULT. All club members or a selected group (e.g., board, advisory board, and elected auditors) can have a copy of the books in digital, encrypted form. This distributed system records each booking, which is then entered permanently onto the books once the majority agrees. Entering it onto the blockchain also means it can no longer be altered, unless others agree to the alterations.

With iVAULT, the new platform, we can keep our association’s books via the blockchain. Additionally, an individual may register their assets in the data bank. It can be seen and checked by everyone on thousands of computers, and the data cannot be manipulated. This means that if you want to buy a product secondhand, you can be sure that the person selling it to you is the true owner. Most important, if purchasing a used luxury car, jewellery, or expensive technical equipment, you know that what you think you’re buying is what you’ll get.

No fakes, only the original with genuine parts.

iVAULT offers four advantages:

  • Authenticity: Consumers can be sure that they’re not buying stolen or fake products.
  • Compliance: Streamlining your governance processes.
  • Information Security: iVAULT helps better protect consumer data while strengthening privacy.
  • Costs: Reducing costs, while speeding up transactions in the supply chain.

Urs explains this in a video, with an example:

If we want to buy a luxury car secondhand, we want to be sure that all data about the car are true.
This challenge iVAULT addresses by providing you with 100% assurance of that, because data, once entered onto the blockchain, can no longer be altered or even falsified.
You can trust that what you buy is what you get. As well, the company can assure its customers that they get the original product. In turn, this helps protect the company’s reputation.

We can check the information on every computer:

  • Which garage did the warranty work,
  • was the car in a major accident, and
  • more factors that affect its value and dependability (e.g., mileage and major repairs).

That is why we can protect what’s ours with iVAULT. But how did this idea originate?

2. Why I created iVAULT

Arman Sarhaddar, Chief Executive Officer und founder of Vault Security Systems AG, tells his own personal story in the video below.

It is what inspired him, along with his team, to create iVAULT.

With his personal belongings in a storage facility, he would have gladly used iVAULT, had it existed. When he was robbed seven years ago, having iVAULT available would have given him a real chance to recover his stolen treasures, and things he loved.

Watch the video of this very personal story below.

Arman lost all the things he gave to a storage facility, like a wooden sculpture and his complete music production studio.

With iVAULT, everyone can register, search for, and identify assets, such as lost or stolen items. Consumers can look up the information given by a seller about a watch, a painting, a car – almost anything – to check if the seller is the true owner and has the right to sell it.

For companies, the benefit can be even greater. For example, when fake medication is sold online, it damages the business’ image, and hurts patients. iVAULT makes it possible to identify counterfeits, both medication, and medical technology.

3. Initial thoughts on marketing

Lothar Rentschler, Chief Marketing Officer, explains that customer happiness, as well as service, is essential to iVAULT’s vision and mission.

iVAULT is about providing a new level of security and comfort for consumers and businesses alike. It is an outstanding solution for counterfeiting and theft. iVAULT helps to protect your goods, and that is why everyone on the team is certain of the market potential of the new brand.

Last but not least, if you want to read more about the shooting take an exclusive look at us behind the scenes.

4. What’s your opinion?

iVAULT is the first global network to use blockchain technology for registering and identifying assets (such as lost items or stolen goods). It lets users register their items on the blockchain, search for them, and identify them.

  • Have you ever used a blockchain?
  • Do you want to try iVAULT, or do you still have concerns?
  • Have you experienced something like Arman Sarhaddar did? Did you lose something of great value or buy a fake product? It must have been very upsetting. Tell us about it, we would to hear your story.

Leave a comment and share your thoughts.

The author declares that some of the companies mentioned herein are clients of CyTRAP Labs or subscribers of DrKPI® services.