Blockchain as coercion to impartiality

Despite its young (adolescent by human standards) age, blockchain is now very popular. News about it appears in the media daily, theses are defended, monographs and dozens of specialized journals with hundreds of scientific articles are published, apocryphal stories of blockchain circulate on social networks in the epic spirit of Homer and the Prophetic Boyan - "The Saga of Public Keys", "The Legend of Bitcoins, Economic Left and Cyberpunks of the XXI Century", etc.

In short, a picture of the metaverse Eden is involuntarily drawn, where waterfalls of patents merge into full rivers of software, on the banks of which fat herds of cryptocurrencies graze.

It would be strange if the picture was different, because blockchain is really an epochal invention.

And it's not even that it frees a person from the mass of people about his well-being, unceremoniously rumming in his personal wallet, and returns us to the blessed times of prehistoric mining, when our ancestors collected shells on the shore of the ocean, which served as the equivalent of goods and services, the currency of the early Neolithic. It's different.

If not consciously, then everyone understands that from now on there is a universal and absolutely incorruptible means of forcing everyone to decency, regardless of his social rank and wealth.

And the main thing now is that the blockchain has a future, and not a sudden death as a result of the operation to remove it as a malignant neoplasm for the authorities and the existing economy.

As for not the future, but the past of the blockchain, years ago, a curious question appeared on the platform of questions and answers among IT specialists and IT enthusiasts Stack Exchange network (this is a kind of knowledge exchange in IT fields, which is actually reflected in its name with a hint of stock "exchange", is included in the top 100 most visited sites in the world).

"I'm writing a thesis on blockchain, and part of my work is devoted to the history of blockchain.So far, I have discovered that the first sentence in this regard - "How to Time-Stamp a Digital Document" was made in 1991 by Haber and Stornet and the second is unknown Satoshi Nakamoto - "Bitcoin: A Peer-to-Peer Electronic Cash System".

So, my question: were there any other suggestions before the introduction of blockchain in the form of a bitcoin system?

In response to this cry of the soul of the degree applicant, someone silently sent him a link to a popular article, of which there were already hundreds on the Internet and which began with the words

And this "what", according to the author of this article, consisted of the PoW (proof-of-work) algorithm developed in 1993 at the IBM Research Center in Almaden, California, by Cynthia Dvork and Moni Naor. "This was half of the magic of bitcoin, and its other half was the formulation of the "time stamp" principle in 1991 by Haber and Stornetta," the article said.

In the second and last answer, the dissertation was advised to look into another 1992 work by the same Stuart Haber and Scott Stornetta from Bell Communications Research (Bellcore) and Dave Bauer from Columbia University - "Improving the Efficiency and Reliability of Digital Time-Stamping". It was said that they included "Merkle's tree" in their previous 1991 design.

It is most convenient to start the history of blockchain with the work of David Chaum from the University of Berkeley "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups", published on February 22, 1979, which described all elements of the blockchain except for the PoW algorithm.

As well as the relevant U.S. patent №4529870 "Cryptographic identification, financial transaction, and credential device",  from Chaum in July 1985 (with priority from June 1982).

Next, it was possible to smoothly move on to the idea of cryptographic hashing of Berkeley University graduate Ralph Merkel, that is, the transformation using a mathematical algorithm (hash function) of data that is transmitted over an open network into digital stuffing or into "okroshka", as written in the Soviet cryptographic literature, which cannot be reverse recovery.

In 1982, Merkle received a U.S. patent №4309569 for his method (with priority from September 1979). And even earlier, in 1980, he, together with Whitfield Diffie from Northern Telecom and Martin Hellman from Stanford, received a U.S. patent №4200770 (with priority as early as September 1977) to

"a cryptographic system that transmits a cryptogram, computationally protected, over an insecure communication channel without pre-configuring the encryption key".

As written in their patent application, "transformations use unclassified operations that are easy to perform, but extremely difficult to invert. It is impossible for the eavesdroper to invert the initial transformation to receive either the secret signal of the interlocutor or to duplicate the last transformation to obtain a secure encryption key". Now it is called the "Hellman-Diffie Protocol", and sometimes Merkle is added to its name - "Hellman-Diffie-Merkle Protocol".

Further, in chronological order, attention should be paid to PoW. Well, if the dissertation student got into the taste of historical IT research, he might be advised to read the book "Cryptography: from primitives to the synthesis of algorithms" published in St. Petersburg in 2004 (it is freely available on the Internet).

It, however, has four hundred pages in small skibble, but in detail and in clear language the history of designing high-speed ciphers, digital electronic signature systems, hash functions and other things, which in the language of ciphers is called a rather offensive word for IT people cryptographic primitives.

This book is also good for researchers of the blockchain background because it was written literally on the eve of the appearance of blockchain.

And for a further effect, an article by domestic specialists from the Center of Software Systems "Spectrum" of the Research Institute "Vector" could be added to the data from it.

F. Mozhaisky "Multiple signature: new solutions based on the concept of a collective public key".

It was published in January 2008, when no one in in the world still had any dream or knowledge about blockchain.

It proposed options for the construction of protocols of multiple electronic digital signatures, eliminating the need to use a trusted intermediary.

And so, less than nine months after that, the blockchain in the hypostasis of bitcoin jumped out like a devil from a snunctur. More precisely, a publication under the pseudonym Satoshi Nakamoto "Bitcoin: A Peer-to-Peer Electronic Cash System" appeared on the network, and three months later the Bitcoin network was launched.

In short, the main milestones on the way to blockchain are well known and have been described hundreds, if not thousands of times.

The difference in these descriptions is only in the number of these milestones and disputes about who was actually the first to take this or that step towards blockchain.

Disputes are generally fruitless.

As engineer Paul Baran, who once proposed the principle of building the World Wide Web, said in one of his interviews:

"The process of technological development is similar to the construction of a cathedral. For several hundred years, new people appear, everyone puts their own stone on top of the old foundation and at the same time says: "I built a cathedral!" Then a historian appears and asks: "Well, who built the cathedral?" Peter put a few stones here, then Pavel added a few more.

If you are not careful, you may be fooled by forcing yourself to believe that it was you who did the most important part. But the reality is that each contribution follows all the previous work. Everything is connected with everything else."

Wise words, it's even strange to hear them from a successful and prolific inventor (31 patents) and, probably, a tough entrepreneur (to found 8 companies and do business in them, you need a strong character and a good self-confidence).

But just an example of the creation of blockchain, which appeared as a result of the crossing of digital computer encryption technologies and communication technologies on the Internet, is a good illustration of the words of Paul Baran.

Cryptography is a very ancient science, and for thousands of years it has been a self-sufficient science. It remained so even after the encryptors had a new tool after World War II - a computer, then still in the hypostasis of a supercalculator with analytical functions. Such computers, we called them computers, could swallow rivers of letters and numbers and check an unthinkable number of possibilities to find an open text of the encryption among them in an acceptable period of time, that is, before it loses its meaning.

As digital computer encryption and computer decryption developed, by the early 1960s, the situation around cryptography began to resemble the times of the Manhattan Project.

Now, probably, few people remember how two cryptanalysts from the U.S. National Security Agency (NSA) William Martin and Bernon Mitchell escaped to the USSR at once. Their press conference on September 6, 1960 at the House of Journalists in Moscow was a sounding slap in the face of the NSA by the KGB. After them, another NSA employee, Victor Hamilton, asked for political asylum in the USSR. And after the appearance of Hamilton's letter in "Izvestia" in 1963, a certain sergeant Jack Dunlap, a personal driver, and then a courier of the assistant director of the NSA, Major General Harrison Cloverdale, committed suicide in America. The sergeant, as the American press wrote, got a 40-foot motor yacht, a sports Jaguar, two "Cadillacs" of the latest model and a blonde lover with his sergeant salary.

Hardly anyone will tell what and how it really was, but the "spy passions", similar to the espionage of the time of the creation of the atomic bomb, were a weighty indirect sign that computer encryption technologies were of strategic importance.

And they still have, already in the era of the World Wide Web, as shown by relatively recent stories with Julian Assange and Edward Snowden.

But even then, when the Internet existed only at the level of the idea, all IT specialists who worked on the implementation of this idea understood the inevitability of introducing purely cryptographic methods to protect information on the network.

In 1964, RAND Corporation engineer Paul Baran, in a series of his works published in his corporate report note (memorandum) "On Distributed Communications" ("On Distributed Communication Networks") described the architecture of "a highly tenable communication network that will allow several hundred large communication stations to communicate with each other after an enemy attack even in the fusion era".

He proposed a method of packaging in separate bags, which he called "message blocks".

These packets should not be sent according to the centralized (or star-shaped, as Paul Baran himself called it) principle, when all communication channels come from the single main center of their transmission and go from there to each recipient via a separate communication channel, allocated only to this recipient, but are sent in parts and different ways through a "distributed" (metwork or cellular) communication system and are collected in its original form at the destination point.

In fact, it was the Internet, and Paul Baran is rightly considered one of the creators of the World Wide Web, only slightly ahead of his time, that is, the forerunner or prophet, as they said in the old days, of the Internet.

In the same report note by Baran, which consists of 11 independent chapters, Chapter IX describes in detail the problem of the confidentiality of information transmitted over distributed networks.

According to him, communication encryption equipment is very expensive; the cost of providing cryptographic security on each communication channel through which confidential military traffic is transmitted may exceed the total costs for the rest of the system, and therefore in "non-crisis periods" the military does not always afford the luxury of cryptography.

Moreover, as Paul Baran noted, there is clearly a curious pattern: the higher the rank of an officer, the more often he does it. In his own distributed network, Paul Baran believed, there is an opportunity to radically reduce the cost of secrecy.

There is an idea that the money that is now spent on ensuring a high degree of security of cryptographic devices could be better spent on buying much more lower level cryptographic devices," writes Paul Baran.

"If it weren't for the almost unyielding requirement of absolute security, we could consider using many inexpensive cryptographic schemes that provide the ability to process all traffic."

"The proposed network is a universal system of high secrecy, consisting of a hierarchy of less secure subsystems. It is proposed that the network deliberately process all input data as if they were classified in order to increase the price of interception for the enemy to such a high value that the interception would not be worth his efforts,"

Paul Baran said the main idea of information protection in his network. And at the same time prudently made a reverence towards the top military and political leadership:

“Of course, an additional high level of traditional cryptography would be preserved for use in those extremely delicate cases when the proposed approach may seem risky."

Probably for him, that is, the decision-making of the senior management, engineer Baran explained the same thing more clearly:

"Thus, the proposed system uses a mechanism that takes a channel or message and cuts it into small pieces (such as a fruit salad in a bowl), transmitting it in the form of a series of message blocks, each of which uses its own path. In addition, most of the non-secret materials are deliberately transmitted cryptographically, and perhaps even a small dose of outdated traffic is mixed with them. Given a large enough bowl, it becomes very difficult to separate the garbage from the salad."

What is not the prophecy of blockchain or, at least, hashing?

Now they write about blockchain as a cryptographic primitive. But it's one thing to be an idea, quite another to implement it in practice.

In the first half of the 1960s, there were no people willing to implement it, neither in the military department nor in the IT business. In any case, AT&T engineers were skeptical about it.

A year later, in 1965, Donald Davis from the National Physical Laboratory (NPL) in London built a demonstration network for the transmission of information in packets that were independently transmitted over the network along different routes and assembled in its original form at the destination.

But his network, although it existed in a tatictile form, unlike Paul Baran's smetative network, remained a demonstration network.The case moved from a dead point in the second half of the 1970s, and not because the situation in the world changed, the "de-essing" of international tensions began, the Helsinki Agreements were concluded, etc.

For cryptographers, the main task remained the same - to create ciphers that a strategic enemy would not be able to split in a reasonable time.

In any case, the style of publications and even patent applications of Hellman, Diffie and Merkle remained the same, during the Cold War.

For example, Merkel set and solved the task of "ensuring security when the enemy knows everything and the enemy can listen to messages", against which he offered "a cryptographic key on an open communication line, even if the enemy knows everything".

It was different. The appeared cryptographic primitives that fell out from under the "top secret" stamp could be of interest to business.

Paul Baran wrote about this fifteen years ago:

It is interesting to note that, despite the severity of punishments for the protection of state secrets (not to mention patriotism), private "proprietary", commercial secrets are often stored better than secrets affecting national security (if the time between the first disclosure and the open publication of the "leak") is used as a measure of measurement. Nevertheless, most companies allow you to keep their civil secrets in thin wooden desk boxes, discuss them with people whose past has not been studied, and even discuss them through civil telephone networks.

In general, these three people, Hellman, Diffie and Merkel, broke the barrier to cryptography. And in the 1980s, cryptographer David Chaum, directly relying on their work, conceptualized the need for anonymous communications, payments and, ultimately, the need for decentralized services.

But in fact, this need was conceptualized by the then young, 24-year-old graduate student at the University of Berkeley David Chaum a little earlier.

In 1979, in an open report (memorandum) to the university authorities (and at the same time a message to business), he described "Computer systems created, maintained and trusted by mutually suspicious groups".

The euphemism of his formulation would do honor to Aesop himself.

It comprehensively reflected the most intimate essence of blockchain - a civilized tool for doing business in situations where not "good guys" hide their secrets from "bad guys", as in classical cryptography, and when everyone and everyone against everyone, as in the classic market business, where issues were always solved according to the principle described by O. Henry:

"Bolivar can't stand two."

"Security is a relative thing," Chaum wrote. - We will be interested in block diagrams, which make it very difficult to change part of the encrypted block of information without causing radical changes in the entire decrypted block. In such systems, a large serial number can be added to the block before encryption. Its presence after decryption indicates that the block has not been changed. In addition, it becomes extremely difficult for someone who does not have a key to create a block that will contain the desired serial number when it is decrypted by the owner of the key." Chaum's detailed note is long.

It is freely available on the Internet, anyone can read it from beginning to end on their own. But now the only important thing for us is that in order for the Chaum system to work, anonymity and strict unilateral authentication of the signatures of its participants were required.

That's what he tried to do. In 1982, he applies and in 1985 receives a U.S. patent №4529870 for "Cryptographic Identification, Financial Transactions and Credentials" Device, in which "one of the important properties is that the signatory cannot determine which converted message received for signature corresponds to which digital signature, even if the signatory knows that such correspondence must exist".

And in 1983 he applied for the invention of "Blind Signature Systems" and in 1988 received a U.S. patent №4759063 on them. In total, he has about three dozen patents for improving his system, as already mentioned. By the way, these patents expired a few years before the launch of bitcoin. Coincidence? No, I think:)

In the early 1990s, Chaum moved from theory to practice. DigiCash, registered in Amsterdam, made the world's first electronic payment via a computer network, introduced its own electronic currency eCash and deployed a payment system of the same name. Pretty quickly, the number of DigiCash customers reached thousands of people, but it didn't go any further.

In 1998, the company declared itself bankrupt. They say that Chaum had to put even his unexpired patents at auction.

Historians believe that he was too ahead of his time. Of course, he was ahead, but not much. The mythical Satoshi Nakamoto in 2011 in an interview with the New Yorker magazine frankly said that the idea of blockchain came to his mind when the global financial crisis of 2008 broke out, and he, they say, had such a personal dislike for the crisis that he could not eat, and everyone wrote programs for the blockchain, which would not be affected by such crises from now on.

And seriously, by the beginning of our century all the necessary elements for blockchain were available, and figuratively speaking, it remained to put them like a puzzle into an accounting book, which a group of people could have for general and anonymous use bypassing traditional financial institutions and the state regulator.

This ledger consisted of blocks (records) of information, including information about transactions between two or more parties.

The blocks were cryptographically linked to each other to create unchangeable accounting. Nodes could add information to the ledger by calling transactions. At the same time, in each specific case, the access policy determined who could read the information.

The control policy determined who could participate in the evolution of the blockchain and how new blocks could potentially be added to the blockchain. The consensus policy determined what state of the blockchain is acceptable, resolving disputes in case of contradictory continuations.

In 2008, such a scheme was finalized, and Satoshi Nakamoto publicly announced it online in his famous two page message:

"Bitcoin: Decentralized Electronic Monetary System".

But even then the time of blockchain did not come, for another two years the general public was not so interested in bitcoin. But then a boom began, and such that it still doesn't subside.

In 2011, blockchain-based cryptocurrency Litecoin appeared (it was called "silver", a changeable coin of "gold", that is, bitcoin) and Namecoin, both derivatives of Bitcoin.

Peercoin appeared behind them in 2012, and five more blockchains appeared behind it for a couple of years, and there are about fifty of them today and slightly fewer varieties of cryptocurrencies generated with their help.

In 2018, IT specialists from the University of Maryland counted more than 550 patent applications for a variety of distributed registry systems on the blockchain, and the bitcoin hashing rate exceeded 50 million teraheshas per second, consuming more than 73 TWh of electricity per day, which is more than Switzerland consumes. It is clear that in such an environment, the blockchain has finally acquired in the public consciousness the image of a temple of greed and a temple of hope at the same time as the impersonal chief priest in a kamilavka with a black veil.

Attempts to reveal the mysterious identity Nakamoto is an ungrateful occupation primarily because it was the excitement around his personality that he was counting on. They say that such serious offices as the CIA and the NSA, not to mention linguists, programmers and journalists of all stripes, were engaged in the identification of his person or a number of persons hiding behind this pseudonym.

Except that patent critics did not participate in this, although according to the principle of cui prodest, it was they who could more or less accurately outline the circle of the main suspects - those who at the time of the announcement of the blockchain were particularly zealously issued or had already issued patents for its technologies.

For example, between the beginning of 2021 and March 2022 (there is no later data in the public domain yet), more than a thousand patent applications for blockchain-related blockchain-related technologies were filed with the U.S. Patent and Trademark Office.

According to their statistics, it turns out that Advanced New Technologies and Alipay, affiliated with the Chinese Ant Group Co., Ltd. (which in turn is a daughter of Alibaba Group Holding Limited), were most actively sought patent protection for these technologies in the United States. These three companies, all associated with Alibaba Group, are significantly ahead of the next largest patent holder, IBM, in terms of the number of patents.

Everything is very clear here: the Chinese are aggressively moving into the American blockchain business, since American patents are subject to enforcement only within the United States. So the patent here is not only a document for an invention, but sometimes it can be a weighty and the only proof in court.

There are really a lot of patent applications for blockchains of various variations in developed countries of the world.

Now blockchain is considered not only as a source of cryptocurrencies and a tool of a new type of economy.

The first thing that comes to mind is a new voting model (without a guiding central election commission), where it is impossible to rig the results.

You can list other blockchain applications, smart contracts, private computation,data storages, etc.

The list will be long, because blockchain technologies are applicable wherever it is desirable to eliminate the "human factor".

After all, in a broad sense, the key feature of blockchain is the elimination of this factor the responsibility for the reliability of operations is assumed by the science of mathematics and computer, which in this sense are much more reliable.

So far, the attitude towards blockchain of big business (and its derivative - political power) is favorable, because it is a big business, fully controlling the intellectual component of the blockchain in the form of patents.