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3rd Blockchain and Cryptocurrence Conference (B2C' 2024),
16-18 October 2024, Tenerife (Canary Islands), Spain
1
Oral ☒ / Poster ☐ / The same ☐
Virtual: Zoom ☐ / Pre-recorded video ☐
Topic: Enterprise Blockchains
Borderless – Towards a novel approach for a secure and privacy-compliant
blockchain
Christian Hammermeister 1, Larissa Krämer 2 and Patrick Stuckmann-Blumenstein 3
1 Borderless Technologies GmbH, Dortmund, Germany
2 Chair of Material Handling and Warehousing, TU Dortmund University, Germany
3 Chair of Enterprise Logistics, TU Dortmund University, Germany
E-mail: christian.hammermeister@borderless-technologies.com
Summary: Blockchain technology facilitates data sharing in multi-stakeholder processes such as shared manufacturing due to its
decentralization and immutable data storage. However, one challenge in blockchain-based data sharing in industrial processes is
guaranteeing data privacy while balancing scalability, security, and decentralization. This paper introduces "Borderless," a novel
blockchain approach that guarantees decentralization and immutability while ensuring data privacy and legal compliance. Unlike
existing solutions, Borderless integrates advanced privacy measures and a robust legal framework, making it a comprehensive,
secure option for enterprises with stringent regulatory requirements. Our methodology includes a review of related work, the
proposal of the Borderless framework, and simulative benchmarking against other blockchain frameworks. This comparative
analysis demonstrates Borderless's suitability in meeting the dual demands of security and privacy for industry without
compromising the core benefits of blockchain technology.
Keywords: Blockchain, Smart contract, Borderless, Data privacy, Scalability
1. Introduction
The significance of blockchain technology lies in its
ability to revolutionize trust and transparency in multi-
stakeholder processes, such as shared manufacturing, by
providing a decentralized, standardized, immutable and
real-time data exchange [1]. Smart contracting, which
automates and enforces agreements using
programmable code, further enhances this capability by
streamlining industrial interactions [2]. However, in a
decentralized blockchain environment for industrial
applications, ensuring data privacy is paramount to
protect sensitive information and maintain competitive
advantage of companies [3]. Additionally, legal
compliance is crucial to ensure secure adoption of
blockchain technology in industry.
Our aim is to provide a blockchain solution to science
and industry that is inherently secure, keeps data
privacy and ensures legal compliance while being
performant and decentralized at the same time.
Consensus mechanisms play a pivotal role in
determining the performance and integrity of a
blockchain network, making them essential components
of blockchain architecture. By bridging the strengths of
Proof of Stake (PoS) and Proof of Authority (PoA), we
endeavour to create a consensus mechanism that
optimizes network scalability, enhances security, and
preserves decentralization. Against that backdrop, our
research question is: “How can legal compliance, data
privacy, decentralization, and network performance and
scalability be reconciled in a blockchain network?”
This research introduces a novel approach to blockchain
called Borderless, addressing legal compliance and data
privacy for industrial applications. Furthermore, the
development of an efficient consensus mechanism
extends current knowledge in blockchain science,
fostering innovation and efficiency in diverse industrial
applications while enhancing trust and transparency.
2. Related Work
This section provides foundational insights into
blockchain technology and consensus mechanisms for
the development of Borderless. Consensus mechanisms
are essential in blockchain to achieve agreement among
distributed nodes, ensuring the integrity and consistency
of the blockchain ledger [4]. Key characteristics of
consensus mechanisms such as PoA, PoS, and Proof of
Work (PoW) are critical to blockchain performance and
define their operational efficiency, security and
scalability [4]. PoA is based on reputation and is noted
for its efficiency in permissioned networks, whereas the
energy-efficient PoS is based on a stake in the network
currency. PoW ensures robust data integrity through
computational efforts [5].
Besides, the integration of data privacy and legal
compliance within blockchain technology is a critical
area of ongoing research. Studies have explored
privacy-preserving techniques such as zero-knowledge
proofs and secure multi-party computation to protect
sensitive information on public blockchains [6].
Additionally, researchers examine the alignment of
blockchain systems with regulatory frameworks, such
3rd Blockchain and Cryptocurrence Conference (B2C' 2024),
16-18 October 2024, Tenerife (Canary Islands), Spain
2
as the european General Data Protection Regulation
(GDPR), to ensure legal compliance and address
jurisdictional challenges [7].
3. Proposal of a new Secure, Decentralized and
Private Blockchain
The Borderless Blockchain introduces a novel
private blockchain architecture designed to harmonize
blockchain’s decentralization and immutability with
rigorous data privacy and legal compliance
requirements. It employs a certificate authority (CA) to
link specific wallets to legal entities, ensuring the legal
certainty of smart contracts and guaranteeing data
integrity. Unlike traditional blockchains, smart contracts
on the Borderless Blockchain execute through a distinct
consensus process on participant servers, enhancing
flexibility and efficiency. A hybrid consensus
mechanism, mixing PoS and PoA, underpins the
system, balancing energy efficiency, throughput, and
trustworthiness by incentivizing validators to act
honestly through staking, while also leveraging the
identity-based selection of validators to ensure
reliability and integrity.
Additionally, Borderless utilizes several other
mechanisms to secure tokens, assets, and smart
contract-related data, maintaining data sovereignty for
all participants. To avoid tracing and linking
transactions to the same recipient, Borderless uses
stealth addresses, which are unique, one-time-use
addresses for transactions. Additionally, ring signatures
allow a user to sign a message on behalf of a group,
making it impossible to determine which group member
created the signature, thereby providing anonymity.
Borderless further uses Merkle proofs to verify that a
specific piece of data is part of a larger dataset without
revealing or accessing the entire dataset by leveraging a
Merkle tree structure. Besides, Borderless provides a
high level of security by using the Advanced Encryption
Standard-256 (AES-256), a symmetric encryption
algorithm that uses a 256-bit key to encrypt and decrypt
data. AES-256 is recognized for its ability to resist
brute-force attacks, making it a suitable choice for
securing sensitive information.
The Borderless Blockchain does not only uphold the
core benefits of blockchain — like immutability and
decentralization of data and trust — but also integrates
advanced privacy measures and a strong legal
framework to offer a comprehensive, secure blockchain
solution suitable for enterprises needing to meet strict
regulatory standards.
4. Benchmark against Test Networks
To evaluate the performance of Borderless for
industrial applications, we comprehensively examine
the borderless framework and benchmark it against
various test networks within the Ethereum ecosystem.
These test networks include those utilizing PoA and
PoW consensus mechanisms we have set up. This
approach allows us to evaluate the performance and
efficiency of the borderless framework in different
consensus environments. The test networks are
configured to be comparable, considering parameters
such as gas limits, gas targets, block time and other
relevant metrics across these networks to ensure a
standardized benchmarking process. Key performance
indicators, including transactions per second, gas units
per block, validation time, and network resource
utilization (Central Processing Unit (CPU) and
Random-Access Memory (RAM) usage), are
meticulously evaluated to gauge the efficiency and
scalability of each network. By employing this
benchmarking approach, we discern the effectiveness of
our newly proposed blockchain consensus mechanism,
Borderless. Furthermore, we investigate the
implications of exceeding scalability limits, shedding
light on potential bottlenecks and performance
degradation within each network configuration.
Through this rigorous assessment, we provide
actionable insights into optimizing blockchain
scalability and advancing the adoption of innovative
consensus mechanisms in decentralized systems.
5. Conclusion
In summary, current research underscores the challenge
of achieving secure, legally compliant, scalable, and
cost-effective blockchain transactions. Our proposed
solution, Borderless, integrates existing consensus
mechanisms while emphasizing privacy and security
for industry applications. The forthcoming extended
paper will detail our methodology, including test
network setup and benchmarking, to empirically
validate our framework and consensus mechanism,
contributing to improved efficiency and trust in
blockchain technology.
Acknowledgements
The work presented in this paper was funded by the
Deutsche Forschungsgemeinschaft (DFG) – 276879186/
GRK2193.
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