Blockchains and Distributed Ledgers

King's of the Block: Blockchains and Distributed Ledgers

The World-Wide-Web allowed organizations to share and disseminate information easily and quickly. As a consequence, most major companies and organizations undertook business process engineering (BPE) or re-engineering (BPR) projects in the 1990s to design their customer-facing processes and then their internal processes around the possibilities of the Web. The Web truly was revolutionary.

However, making information available to another person or organization does not necessarily mean they have seen it. Even if they have seen it, they may later plausibily deny or repudiate it. How can a company ensure that its trading partners and collaborators have the same information and all agree that they have the same information? Here, a new technology, the blockchain or distributed ledger technology, can provide this. This technology creates a stateful shared state between parties, where everyone knows the same information, and everyone knows that everyone knows the same information, and everyone knows that everyone knows that everyone knows the same information, and so on, ad infinitum. Game theorists call this situation common knowledge. No party can plausibly deny later that they did not know the shared state.

In other words, where the Web provides a platform for sharing information, distributed ledger technologies provide a platform for common knowledge, and hence for epistemic reasoning about that shared information. And just as the adoption of the Web led companies to re-engineer business processes within companies, the adoption of blockchains will lead to re-engineering of the processes between companies. The Blockchain was developed for the crypto-currency Bitcoin and it cleverly combines:

The combination of chaining of records and community witnessing means that past records are effectively immutable. A past record can only be changed if all subsequent ones are changed, and if the witnessing community agrees to these changes.

Like flocks of migrating birds deciding a direction to fly, the technology allows for verifiable agreement between multiple parties without requiring a trusted central authority to attest to the agreement. And immutability of records means that the facts records assert cannot later be repudiated. Distributed ledger technologies also provide a platform for the deployment of smart contracts, which are self-executing programmes implementing some agreement between two or more parties.

There are currently many research and implementation challenges for these technologies, for instance:

As often happens in computer science, application preceeds theory, and the theorists are still trying to catch up. The research and deployment challenges are very exciting: for these challenges to be met, both theory and practice need each other. Our focus is on both theory and on practice, as well as having a keen interest in business applications. As a generalization, distributed ledger technologies and platforms are still very immature and do not scale. Accordingly, real-world development projects, even proof-of-concept projects, encounter novel bugs and challenges which typically require ad hoc kludges and fixes. Documentation is scarce and devopment experience counts enormously. And the people running these companies are often new to business, so that, to give one recent example, they can suddenly change the company name and somehow forget to change the scripts and pointers inside their software.

London, as a centre for global finance and financial technology, is certainly the best location to be exploring these issues at this time.

We have formed an informal discussion group at King's College London to explore these techologies, involving participants mainly from the Department of Informatics and the Department of War Studies.

King's of the Block include:

Mustafa Al-Bassam, Martin Chapman, Andrew Coles, Dan Magazzeni, David Kohan Marzagao, Peter McBurney, Matthew Moran, Josh Murphy, Will Nash, Agash Navaranjan, Lukas Ondrej, Mark Ormesher, Richard Overill, Steve Phelps, Stefan Sarkadi, Nishanth Sastry, Gareth Tyson, Christian Urban, Luca Vigano, Tomas Vitek.

Alumni: Nick Gillard, Dominic Williams.

This page documents some of our activities, at King's and elsewhere.

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© 2016 Peter McBurney