Bitfury report explains auditability as blockchain’s defining feature

Crazy Review : Bitfury Group defines blockchain in its report: blockchain is a combination of three technologies: Byzantine fault-tolerant system, digital timestamp service and currency ledger using cryptographic primitives. The report believes that the core function of blockchain is to provide auditing and accountability, and public chains can achieve this function while protecting the privacy of participants. Bitfury introduced the concept of "anchored blockchain" to provide a higher level of security.

Translation: Nicole

What makes blockchain?

Bitfury Group is now evaluating the definition of blockchain, a topic often discussed in the financial sector.

As part of its transition into enterprise blockchain services and consulting, Bitfury’s latest research report — On Blockchain Accountability — aims to illustrate this point, breaking down the underlying innovations that make the bitcoin blockchain a “blockchain,” by extension, the need for versioning features like code tagging.

According to the report, blockchain is defined as a combination of three different technologies (a Byzantine fault-tolerant system, a digital timestamping service, and a monetary ledger using cryptographic primitives), each of which was considered to be "well-researched" before the introduction of the Bitcoin blockchain.

The report is as follows:

“A blockchain is a replicated, autonomous, Byzantine fault-tolerant log based on blocks that allows for external auditing and lightweight nodes, and provides an immutable log record.”

It is worth noting that Bitfury is one of the largest miners in the Bitcoin blockchain, but is not limited to the definition of a proof-of-work blockchain, but can meet the underlying properties of its definition in different ways.

However, Bitfury also said that at its core, blockchain must provide auditing and accountability, a function that public chains can help achieve (even in cases where participants require privacy).

Another key point is that the report distinguishes between blockchain and traditional replicated logs, arguing that the former provides solutions for "accountability, retrospective auditing and customer interaction" through the use of data blocks.

This is further described in a new subsidiary definition, which aims to provide clearer explanation and labeling for the alternative blockchains that have emerged.

For example, permissioned or enterprise blockchains are defined as “(automatically) maintaining consistency with identifiable consensus nodes,” while secure blockchains that require a public ledger are referred to as “anchor blockchains.”

Anchoring

Bitfury’s opinions on the latter topic are perhaps most noteworthy given its original market positioning in the public blockchain sector.

However, Bitfury calls for scientific reasoning in its report. Using newspapers as an example, the paper argues that historically print media has met some of the characteristics that can now be achieved with public blockchains.

For example, it marks newspapers as “anchors” that contain data that is “time-stamped” and published at regular intervals. This makes the information in newspapers less vulnerable to attack or corruption, the paper argues, because copies are publicly available and cannot “show different values ​​to different readers.”

“To modify the blockchain retroactively, the attacker would need to reprint all copies after the retroactive modification and destroy existing copies, which is practically impossible and costly for relatively popular print media.”

In this regard, Bitfury introduced the concept of an “anchor blockchain,” or a blockchain that requires a “target blockchain,” such as the Bitcoin blockchain, to provide greater security.

The report also looks at some alternatives that could be used, including trusted hardware and blockchain service providers, although it says these may fall short in providing auditability and accountability.