In August 2018, the first domestic verification test on Internet voting that uses blockchain and My Number cards was conducted. This test was led by Tsukuba City in Ibaraki Prefecture. The city was working on a project to ask the public to devise trial (verification test) ideas that utilize civil ingenuity to socially implement innovative technologies, including the IoT, AI and big data analysis, and support outstanding trials. An Internet voting system was utilized for the final review to select Tsukuba Society 5.0 Social Implementation Trial Support Projects from proposed trials. My Number cards were used for identifying voters.
There are four basic conditions for fair Internet voting as shown below. The first is to confirm the validity of voters. The second is to keep votes secret. The third is to prevent multiple voting. Lastly, the fourth is to prevent votes from being tampered with.
The characteristics of blockchain are that it securely records all the transactions (voting in this case) that participants make without being tampered with. This means that combining blockchain with a voter authentication mechanism makes it possible to achieve an Internet voting system that meets the four basic conditions.
Although Internet voting in Tsukuba was carried out in such a way that voters vote with terminals in prepared polling stations, the system was built to make it possible to vote from homes and other places. When these efforts progress further and technical knowledge is accumulated in the future, we may be able to select our representatives from homes and other places using Internet voting.
Challenges of Blockchain: Real-time, Throughput, Security
Blockchain technology is not perfected yet, even though many expect it to drive the digitization and systematization of various economic and social activities ranging from financial activities to Internet voting. Since the inception of bitcoin started in 2008, it is safe to say that the technological development of blockchain has just begun. Blockchain has much potential but there are also many issues that need to be resolved. To make the full use of blockchain, many new technologies have to be incorporated going forward.
There are several issues surrounding blockchain, and this article introduces three representative ones. The first is a low real-time processing capability. Blockchain involves a process to record transactions in a block periodically. In addition, there is a rule that, since several computers may create separate blockchains concurrently, the longest blockchain shall be considered legitimate after a certain period of time. For this reason, it takes some time to determine whether a blockchain record is legitimate, making it less suitable for transactions that require a formidable real-time capability.
The second is low throughput. This is related to the fact that the amount of data per block is fixed and transactions are recorded periodically. When a multitude of transactions occur instantaneously, some of them cannot fit into a data block and are queued for the next block. Computer clusters that compose a blockchain performs enormous computations to generate blocks and such computing power is used for earning rewards by completing computations faster than other computers. The number of transactions in unit time is determined by how blockchain works, regardless of the computer's processing power.
The third is security. Warnings are especially increasing regarding smart contracts that use blockchain as a program runtime environment. A smart contract makes it possible to distribute a program and implement it on all computers that have joined in a blockchain by embedding the program into the blockchain. To prevent malicious programs from being distributed, a mechanism to identify the safety of programs to deal with should be developed on a continuous basis.
Check Risks of Smart Contract and Discover Corresponding Source Code Portions
Efforts to solve problems with blockchain are being proactively made around the world. As for security problems with smart contracts, for example, there are development case studies involving Fujitsu Laboratories Ltd. and Fujitsu Research and Development Center (China). The two developed a technology to verify risks in smart contracts in advance and identify to what part of the program those risks detected during verification are located.
Specifically, they developed an algorithm to identify risky transactional flows on Ethereum, a runtime environment for blockchain applications, which makes it possible to detect various risks in smart contracts that may be overlooked when done manually, in a comprehensive manner.
Risks in smart contracts that Fujitsu Laboratories Ltd. and Fujitsu Research and Development Center (China) made possible to verify
They also developed a technology that not only detects risks but also identifies with a high degree of accuracy to what part of the source code those discovered risks are located. Portions of the source code that correspond to the detected risks are identified by inferring a corresponding relationship between the execution file and an execution file for debugging with source code information embedded. Incorporating and making use of this technology will significantly improve the security of smart contracts.
Technologies to detect risks and locate corresponding portions that Fujitsu Laboratories Ltd. And Fujitsu Research and Development Center (China) developed
EOS Highly Rated by Rating Agencies for Its Performance
Blockchain was developed as a technology for realizing bitcoin virtual currency. Since then, new blockchain technologies that are improved and enhanced versions of the bitcoin blockchain have arrived one after another, each of them generating its own virtual currency. According to CoinMarketCap, which announces the transaction values and volumes of and the market capitalization of virtual currencies issued around the world, 1,900 or more virtual currencies were issued as of August 2018.
Some of those new blockchains resolved issues that the bitcoin blockchain had. For example, EOS, an organization founded in June 2017, achieved faster processing speed by such means as allowing a person elected by participants' votes incorporate a mechanism to generate blocks efficiently. The bitcoin blockchain can process only several transactions per second, whereas EOS is looking to process several million transactions per second.
EOS was founded to achieve a distributed platform for smart contracts that companies can utilize in their business activities. This concept is similar to that of Ethereum but with an additional unique characteristic that Ethereum lacks, which is no transaction fees are charged.
Another characteristic of EOS is that they have garnered a reputation for their technological prowess. For example, in China, the China Center for Information Industry Development (CCID) has been publishing the results of virtual currency evaluations based on the Global Public Blockchain Technology Assessment Index and, according to the June 2018 result, EOS was ranked first overall. The rankings are made from technological, applicability and innovation perspectives and EOS was also ranked first in the technological category. As a side note, Ethereum came in second overall.
Part of the press release on the results of the evaluation based on the Global Public Blockchain Technology Assessment Index (source: China Center for Information Industry Development)
New Technology for IoT Enables Distributed Ledgers to Use Non-Blockchain Approach
To overcome the constraints of blockchain, activities for developing distributed ledger technologies based on non-blockchain principles have also begun. A prime example of this is IOTA, a virtual currency under development for the IoT.
IOTA is designed to be used for exchanging data between IoT devices. The IoT requires instant exchanges of enormous amounts of real-time data. Collecting information from a multitude of sensors and generating big data increases the value of information. However, the price of each piece of sensor information is not so high and countless transactions occur. Charging a fee each time a transaction is recorded will not help IOTA prevail. For this reason, a mechanism to make transactions free of charge was devised for IOTA in addition to a higher level of real-time performance and throughput. It is called Tangle.
In Tangle, a person who wants to make a transaction approves other transactions. Then, they associate their transaction with the two transactions that they approved and record it. For this reason, the overall transaction record is composed in such a way that transactions are associated with one another in a complex manner, rather than in the form of a simple chain.
Since Tangle has no rules that hinder real-time performance and throughput, such as blocks, each participant can approve transactions promptly and independently. In addition, offline approval is also accepted, thereby making it easy to boost real-time performance and throughput. The overall consistency, including approvals made offline, is ensured by synchronizing them when back online.
The development of solutions leveraging IOTA has also begun. For example, Taipei, Taiwan has launched a joint scheme to realize a smart city using IOTA along with the IOTA Foundation, which has taken the lead for IOTA. The first project is to develop digital citizen cards with embedded TangleIDs. The supposed purposes of issuing digital citizen cards are to exercise voting rights, to provide medical record information and to use government-related services.
For the manufacturing industry, Fujitsu demonstrated how to use IOTA to manage the traceability of products at Hannover Messe 2018. To implement the traceability of products and parts throughout a supply chain, a mechanism to mutually link numerous different management systems are required. Using IOTA may make it possible to perform traceability across ID supply chains efficiently.
Blockchain was created to realize virtual currency and this technology is developing rapidly. One cannot help but expect surprising developments to start from both technical and usage aspects. Blockchain may penetrate into daily life as an infrastructure platform that supports a new society, just like the Internet has grown immensely.
Chief Research Officer
NIKKEI BP Intelligence Group
Graduated from the faculty of Engineering, Tohoku University in 1985 and joined Nikkei Business Publications, Inc. in the same year. As a reporter and assistant editor for Nikkei Data Pro, Nikkei Communication, and Nikkei Network, covered and wrote about advanced technologies related to communication/information processing as well as trends in standardization/commercialization. Chief Editor of Nikkei Byte in 2002, Chief Editor of Nikkei Network in 2005 and Chief Editor of Nikkei Communication in 2007. Publisher of ITpro, Nikkei Systems, Tech-On!, Nikkei Electronics, Nikkei Monozukuri, Nikkei Automotive, etc. before becoming Director of the Overseas Business Division in January 2014. Has been in his current post since September 2015. Has been writing the series Jido Unten ga Tsukuru Mirai (A Future with Self-Driving Cars) since August 2016 on Nikkei Online Edition. Issued Sekai Jido Unten Kaihatsu Project Souran (An Overview of Global Self-Driving Development Projects) in December 2016 and Sekai Jido Unten/Connected Car Kaihatsu Souran (An Overview of Global Self-Driving/Connected Car Development) in December 2017. Serving in the CEATEC Award Review Panel since 2011.