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The Blockchain as a Decentralized Security Framework
By Deepak Puthal, Nisha Malik, Saraju P. Mohanty, Elias Kougianos, and Chi Yang
The blockchain is emerging as one of the most propitious and ingenious technologies of cybersecurity. In its germinal
state itself, the technology has successfully replaced economic transaction systems in various organizations and has
the potential to revamp heterogeneous business models in different industries. Although it promises a secure
distributed framework to facilitate sharing, exchanging and integration of information across all the users and third
parties, it is important for the planners and decision-makers to analyse it in-depth for its suitability in their industry
and business applications. The blockchain should be deployed only if it is applicable and provides security with better
opportunities in obtaining increased revenue and reductions in cost. This article presents an overview of this
technology for realization of security across distributed parties in an impregnable and transparent way.
THE BLOCKCHAIN - DEFINED
After the Internet, the blockchain is considered to be the next big revolutionizing technology, as it is reinventing the
way we work and live. In 2008, the idea of blockchain was first introduced by a researcher who implemented the
digital cryptocurrency known as bitcoin, where the
blockchain is an integral part of its working [1]. Numerous
cryptocurrencies with much advanced features have come
into existence since then, such as the Ethereum which
introduces smart contracts [2]. The fundamental
characteristics of the blockchain are illustrated in Figure 1.
For several decades, we have been dealing with
information exchange, and transferral of money and other
assets through online transactions via the Internet, where
each of these transactions involved a trusted intermediary.
These intermediaries are responsible to guarantee a secure
exchange and are accountable in case of any failures or
security breaches. In a paradigm shift, the blockchain
eliminates the need of any central authority between
multiple parties executing financial and data transactions
by using an incorruptible, immutable and decentralized
public ledger. This public ledger is a distributed database
that is shared across all the network participants. It is a tamper-proof, cryptographically secured, and permanent record
of all the transactions that ever took place among the participants. They can view the transactions related to them
anytime they want, but once validated and added to the blockchain, the transactions can neither be deleted nor
modified, which makes the blockchain immutable and irreversible. Each transaction is verified by the participants by
means of pre-defined validation and consensus mechanisms without affirmation or authentication by any central
authority. This not only reduces the cost but also eliminates the chances of information loss due to a single point of
failure, since ledger copies are synchronized across all the
participants. Thus, in addition to its salient features which
include immutability, validation, decentralization and
transparency, the blockchain promises to provide privacy
and security at all points in time. Figure 2 demonstrates the
difference between centralized execution of transactions and
the decentralized blockchain system.
The concept of Software Defined Perimeter is also
receiving a lot of attention by establishing a secure channel
before communication [3], where it also works with a
centralized controler [4, 5]. There is a large number of
current research areas, such as the Cloud [6], the Internet of
Things (IoT) [7], Edge Computing [5] and Bigdata [7],
which can directly apply the blockchain to eliminate centralized controller entities. Consequently, the blockchain will
benifit several emerging applications including smart cities, banking, and the Internet of Vehicles (IoV) [8, 9].
FIGURE 1. Pivotal characteristics of blockchain.
FIGURE 2. Centralized systems with intermediaries
versus decentralized blockchain systems.
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THE BLOCKCHAIN - HOW DOES IT WORK?
Consider a system of ‘N’ users across a network sharing information and performing exchange of assets. Instead of
relying on an intermediary among them, they agree on a protocol called a consensus algorithm, which enables them
to establish mutual trust and allows for validating the transactions on a peer-to-peer basis. Thus, the building blocks
of a blockchain-based system include the network participants, a consensus protocol such as proof-of-work,
cryptographic hashes and digital signatures.
The network participants can be individuals, organizations or institutions sharing a copy of the ledger containing
their valid transactions in a sequential order. The ledger is composed of a sequence of blocks as shown in Figure 3,
linked together by their hash values in
chronological order to maintain data integrity and
timeliness. Each block consists of a set of
transactions digitally signed by the owner and
verified by the rest of the participants before
being added to the block. Some features of the
blockchain are now discussed.
Digital Signatures: Participants wishing to
execute a transaction, broadcast it across the
network. This transaction is digitally signed by
the owner by repeated hashing of the public key
for source authentication and then broadcast for verification by other nodes.
Consensus: Since the blockchain revolves completely around decentralization, there is no trusted third party
responsible for secure storage and management of data or accountability in case of any security breaches. All
participants collect these transactions into a new block and start working on the consensus protocol to identify the
validation of the transaction. If the consensus is based on proof-of-work, each participant starts finding the appropriate
proof-of-work.
Proof-of-work: It is the value searched from a pool of values making the cryptographic hash value of the block begin
with ‘N’ number of zeros. This is to render greater security plus an opportunity to win some reward points thus
providing an incentive for a participant to perform this proof-of-work calculation.
Cryptographic Hashes: When a proof-of-work is found by a participant, the block is broadcast to all participants,
which accept it by adding to their blockchain after computing a cryptographic hash such as SHA-256 for the block, to
be used as the ‘Hash_Previous’ for the next block (Figure 3). The longest chain is the trusted one and added to the
blockchain when participants receive multiple blocks simultaneously.
With the above intrinsic features as an integral part of the blockchain’s working, it promises data immutability, data
integrity, data authentication and validation, decentralization and data transparency, thus guarantying data security
across distributed systems. The blockchain is immutable. The records can be altered only if more than 51% of the
nodes are under the control of hackers, which is unsustainable. The technology is autonomous, and it maintains the
anonymity of the sender and receiver in the transaction by utilizing public and private keys of the nodes.
APPLICATIONS OF THE BLOCKCHAIN
The promising features of blockchain are disrupting multiple industries attracted towards this technology, but it is
important to analyse their suitability to the needs of each industry. It is a revolution but not a panacea for all the
business needs. If only the following situations arise, can organizations consider deploying a blockchain oriented
security solution:
(1) A group of people or multiple parties frequently generate transactions dependent on a third party.
(2) The third party cannot be trusted, and the authenticity of transactions is questionable.
(3) The validation of transactions is a priority and thus an enhanced system rendering data authenticity and integrity
is important.
(4) Data integrity over confidentiality and processing performance is important. For time-sensitive applications, the
blockchain is not appropriate as it takes time for a block to be accepted in the chain. In the case of bitcoin, this
time is approximately 10 minutes.
FIGURE 3. Structure of the chained blocks.
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Data in the distributed public ledger is immune to any tampering as it is highly encrypted using advanced
cryptography, hence the technology finds applications in cyber security. It eliminates the usage of centralized devices
in the IoT and other forms of networking. Therefore, devices connected could update software, manage bugs and
communicated directly. The technology provides a new way of managing trust and can be effectively applied in
insurance and domains like finance, as presented in Figure 4 [10]. It eliminates the involvement of a third party; hence
it is finding effective utilization in private transport and
ride-sharing. It is envisioned that the blockchain can
have significant applications in smart healthcare with
the Internet of Medical Things (IoMT) or the Internet of
Health Things (IoHT) to provide security, privacy, and
effective insurance processing [11].
CONCLUSIONS
The blockchain is an effective solution of the centuries-
old consensus problem. Using cryptography (hashes and
digital signatures) and a system that rewards
participants, the winner of a “cryptographic lottery”
reaps the rewards while, at the same time, ensures the validity of the entire ledger. At the same time, the blockchain
is not a universal solution to any problem having to do with transaction verification and security: its implementation
must be adopted only after careful examination of the requirements of the application. The impact of the blockchain
in modern society is disruptive and the consequences of its widespread adoption are still unknown.
ABOUT THE AUTHORS
Deepak Puthal (deepak.puthal@uts.edu.au) is a Lecturer (Assistant Professor) in the Faculty of Engineering and IT
at University of Technology Sydney (UTS), Australia. His research interests include cyber security, Internet of Things,
distributed computing, and Big Data Analytics. He has a Ph.D. degree in Computer Science and Information Systems
from UTS, Australia. He received IEEE Distinguished Doctoral Dissertation Award for Excellence in STC on Smart
Computing for the year 2017. He is an author of 30 peer reviewed research articles. He is serving as an associate editor
of IEEE Consumer Electronics Magazine.
Nisha Malik (nisha.malik@student.uts.edu.au) is a Ph.D. student in the Faculty of Engineering and IT at
University of Technology Sydney, Australia. Her research interest includes Vehicular networks, Information security
and cloud computing.
Saraju P. Mohanty (saraju.mohanty@unt.edu) is a Professor at the University of North Texas. Prof. Mohanty’s
research is in Smart Electronic Systems which has been funded by National Science Foundations, Semiconductor
Corporation, and US Air Force. He authored 220 research articles, 3 books, and invented 4 US patents. His Google
Scholar h-index is 28 and i10-index is 82. He is the EiC of the IEEE Consumer Electronics Magazine. He serves as
the Chair of Technical Committee on VLSI, IEEE Computer Society. More about him is available at:
http://www.smohanty.org.
Elias Kougianos (eliask@unt.edu) is Professor in Engineering Technology at the University of North Texas. He
obtained his Ph.D. in electrical engineering from Louisiana State University in 1997. He is author or co-author of over
120 peer-reviewed journal and conference publications. He is a senior member of IEEE.
Chi Yang (chiyangit@gmail.com) received his Ph.D. in computer science at the University of Technology,
Sydney (UTS), Australia. He is a research Fellow in the Unitec Institution of Technology, Auckland, New Zealand.
His major research interests include WSN, IoT, Big Data Processing, Could Computing, parallel & distributed
computing, privacy & security and XML data streams.
REFERENCES
[1] S. Nakamoto, “Bitcoin: A peer-to-peer electronic cash system.”, https://bitcoin.org/bitcoin.pdf, Last visited 11 Nov 2017.
[2] P. Bailis, A. Narayanan, A. Miller, and S. Han, “Research for practice: cryptocurrencies, blockchains, and smart contracts; hardware for deep
learning”, Communications of the ACM, Vol. 60, No. 5, 2017, pp. 48-51.
[3] D. Puthal, S. P. Mohanty, P. Nanda, and U. Choppali, “Building Security Perimeters to Protect Network Systems Against Cyber Threats”,
IEEE Consumer Electronics Magazine, Vol. 6, No. 4, 2017, pp. 24-27.
[4] D. Puthal, S. Nepal, R. Ranjan, and J. Chen, “Threats to networking cloud and edge datacenters in the Internet of Things”, IEEE Cloud
Computing, Vol. 3, No. 3, 2016, pp. 64-71.
FIGURE 4. Potential applications of the blockchain.
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[5] D. Puthal, X. Wu, S. Nepal, R. Ranjan, and J. Chen, “SEEN: A Selective Encryption Method to Ensure Confidentiality for Big Sensing Data
Streams”, IEEE Transactions on Big Data, 2017, In Press.
[6] C. Yang, D. Puthal, S. P. Mohanty, and E. Kougianos, “Big-Sensing-Data Curation for the Cloud is Coming”, IEEE Consumer Electronics
Magazine, Vol. 6, No. 4, 2017, pp. 48-56.
[7] D. Puthal, R. Ranjan, S. Nepal, and J. Chen, “IoT and Big Data: An Architecture with Data Flow and Security Issues”, in Proc. of the Cloud
Infrastructures, Services, and IoT Systems for Smart Cities, 2017, pp. 243-252.
[8] S. P. Mohanty, U. Choppali, and E. Kougianos, “Everything you wanted to know about smart cities”, IEEE Consumer Electronics Magazine,
Vol. 5, No. 3, 2016. pp. 60-70.
[9] D. Puthal, Z. H. Mir, F. Filali, and H. Menouar, “Cross-layer architecture for congestion control in Vehicular Ad-hoc Networks”, in Proc. of
the International Conference on Connected Vehicles and Expo, 2013, pp. 887-892.
[10] Elio-David Di Iorio, 17 Blockchain Applications That Are Transforming Society, https://blockgeeks.com/guides/blockchain-applications/,
Last visited 3rd November, 2017.
[11] P. Sundaravadivel, E. Kougianos, S. P. Mohanty, and M. Ganapathiraju, “Everything You Wanted to Know about Smart Healthcare”, IEEE
Consumer Electronics Magazine (CEM), Volume 8, Issue 1, January 2018, pp. xx-yy.
