NIST Blockchain Report Examines the Tech Behind the “Hype”
The National Institute of Standards and Technology (NIST) has issued a report titled “Blockchain Technology Overview.” The report, intended to provide a high-level technical overview, discusses the application of blockchain technology to electronic currency in depth, and also discusses its broader applications.
“We want to help people understand how blockchains work so that they can appropriately and usefully apply them to technology problems,” said NIST computer scientist Dylan Yaga, who is one of the authors of the report. “It’s an introduction to the things you should understand and think about if you want to use blockchain.” According to Yaga, blockchain technology is a powerful new paradigm for business.
The very fact that it comes from NIST makes this report worth reading. NIST, a nonregulatory agency of the U.S. Department of Commerce, whose mission is to promote innovation and industrial competitiveness, is a high-profile agency of the U.S. government with programs that include Nanoscale Science and Technology, Engineering, and Information Technology.
“From the smart electric power grid and electronic health records to atomic clocks, advanced nanomaterials, and computer chips, innumerable products and services rely in some way on technology, measurement, and standards provided by the National Institute of Standards and Technology,” notes the NIST website. Therefore, NIST recommendations are likely to shape not only the development of blockchain technology in the private sector, but also the U.S. government’s adoption and regulation of blockchain technology.
“Because the market is growing so rapidly, several stakeholders, customers and agencies asked NIST to create a straightforward description of blockchain so that newcomers to the marketplace could enter with the same knowledge about the technology,” reads the NIST press release.
“We want to help people to see past the hype,” said Yaga.
The NIST report is formally a draft, open to public comments from January 24 to February 23, 2018.
The authors note that many electronic cash schemes were proposed before Bitcoin, but none of them achieved widespread use. Bitcoin cash options achieved compelling capabilities and widespread use because blockchain technology enabled electronic cash to be implemented in a distributed fashion without controlling bodies and single points of failure. Other blockchain technologies discussed explicitly are Ethereum, Litecoin, DASH, Multichain, Ripple and Hyperledger.
According to the authors, financial organizations are likely to be the most impacted by blockchain technology and may need to adapt or even completely change their practices. But emerging nonfinancial applications could prove even more important.
Ethereum, with its programmable smart contracts able to perform calculations and store information, is considered an enabler of next-generation, nonfinancial blockchain applications. For example, NIST researchers have created smart contracts that publicly generate trustworthy random numbers.
The NIST report mentions several nonfinancial applications of blockchain technology, including autonomous machine-to-machine transactions; smart buildings that autonomously trade excess renewable energy; public record keeping for land titles, marriages or births; supply chain monitoring and management; identity systems; and digital notarization services.
The report notes that practical quantum computers, which could be developed in the near future, would be capable of greatly weakening (and, in some cases, rendering useless) existing cryptographic algorithms. This could result in the need to change, or update, the cryptography technology used in today’s blockchain systems. The report provides a table, taken from NIST’s 2016 “Report on Post-Quantum Cryptography,” describing the impact of quantum computing on common cryptographic algorithms. In summary, RSA, Elliptic Curve Cryptography (ECDSA and ECDH) and Finite Field Cryptography (DSA) should be considered as no longer secure. AES, SHA-2 and SHA-3 should use larger key and output sizes.
“Blockchain technologies have the power to disrupt many industries,” conclude the NIST authors. “To avoid missed opportunities and undesirable surprises, organizations should start investigating whether or not a blockchain can help them.”
However, the report warns that updating technology systems with users distributed around the world, and governed by the consensus of the users, could become extremely difficult. The fact that something recorded on a blockchain usually stays there forever, even when there is a mistake, can be a desirable feature for some organizations but a serious problem for others.
This article originally appeared on Bitcoin Trading Broker.