Traceability via blockchain anchoring
Frank Hillard
January 3, 2024
Web3
This article aims to introduce the concept of information traceability. We will see how the publication of fingerprints on a blockchain can create trust among all participants and ensure a consensus on the veracity and authenticity of the information.
Traceability implies knowing the state of an information system and tracking the evolution of its states. The goal is to provide accessibility to certain states that the system passes through for all participants who need to verify the authenticity of the information.
Trust between users is achieved through the publication of proofs, fingerprints indicating that information is known, called existence proofs. These fingerprints can also be cryptographically signed by the user who emits them. This allows specifying which user knew data in the past (without disclosing the information). Thus, the entire system allows tracing the information and its subsequent verification by all users of the system.
To implement the traceability of an object, for example, fingerprints of one or more of its states can be declared and publicly published. These fingerprints are used to verify that the issuer does indeed have information, such as proving that data was known in the past.
Hash functions are cryptographic algorithms that take variable size data as input and produce a fixed-size output, called a hash value. This value is a fingerprint that possesses all the required qualities. The fundamental idea is that it must uniquely represent the input data.
Hash functions are designed to be particularly:
Thus, we can create a unique proof for any data.
A hash function allows verifying that someone indeed knew data by recalculating the fingerprint of the information and comparing it with the original fingerprint.
The classic scenario is that an actor has information in their possession, so they create a fingerprint and make it public, so that if they need to prove they knew this information, they can always reveal the initial information later.
Inscribing fingerprints (proofs of existence) in immutable storage is called anchoring. Anchoring represents the provision of existence proof made by a user at a given time.
The last decade has highlighted Blockchain technology that allows immutable, secure, and traceable storage. This technology finds a particularly powerful synergy with the principle of proof of existence. Indeed, the intrinsic properties of the blockchain provide assurance that:
Another advantage of using a blockchain is that it relies on an existing network and thus does not require setting up hardware to store data.
To set up an anchoring system on the blockchain, just create a program on the blockchain (called a smart contract) that allows publishing a fingerprint. Once a smart contract is published on the blockchain, all users can interact with this smart contract and thus anchor a fingerprint.
Thus, anchoring data on the blockchain allows building a database of certified and verifiable proofs.
Here are some of the essential benefits of using anchoring:
Anchoring is a divisible process that can be performed in parallel on multiple blockchains (for redundancy needs or for parallelization needs). Scaling issues are common in popular public blockchains. By using two separate blockchains, companies can balance the workload. For example, some transactions can be carried out on one blockchain, while others can be executed on another, thus distributing the load and improving overall scalability.
By using two different blockchains, companies can also enhance the security of their operations. Re-creating fingerprints of fingerprints loses nothing, as the final fingerprints can only be found with the initial information. Thus, one can anchor on a blockchain reduced information that still possesses good properties.
In the event of a security breach or attack on one of the blockchains, data and operations on the other blockchain remain intact, thus ensuring business continuity. One can also have one blockchain more resistant than the other, thus increasing security.
Moreover, for scalability reasons, blockchains also come in a subsystem called layer-2 blockchains that offer better performance and are synchronized with the main blockchain. Indeed, layer-2 blockchains allow a greater number of anchored messages per second and a lower anchoring cost, but synchronization with the main blockchain requires a longer waiting time. The use of layer-2 blockchains is recommended when the use case accepts latency.
Transparency allows companies to comprehensively and immutably track the journey of their products throughout the supply chain.
Use cases are diverse: from the food industry, where the origin of products can be verified at each stage, to logistics, where the precise location of goods is recorded in real-time. This traceability is crucial to guarantee product quality, prevent counterfeiting, and ensure compliance with regulatory standards. Moreover, it reinforces consumer trust in brands, as they can verify the authenticity of the products they buy. In the food and pharmaceutical sectors, for example, traceability allows tracking the origin of products, quickly identifying defective or contaminated products, and removing these products from the market, thus ensuring consumer safety. In the event of an incident, such as food contamination, traceability allows companies to respond quickly and minimize losses by quickly identifying the source of the problem and removing defective products from the market.
In the case of digital, traceability is even more fundamental; it is present everywhere, to guarantee the authenticity of objects. Institutions, computer programs, the internet, blockchain, most services already benefit from it in one form or another. Moreover, in a context where privacy protection has become a major concern, transparent and secure traceability can help establish ethical standards and strengthen data privacy, which is crucial for compliance with regulations such as the GDPR (General Data Protection Regulation) in Europe. In short, in the digital world, traceability is an essential pillar to ensure security, trust, and privacy protection for users. By analyzing traceability data, companies can identify trends, customer preferences, and inefficiencies in their operations, which can lead to product innovations and continuous process improvements.
Trust between today's actors is inescapable in many respects. To obtain it, one can use the tool of existence proofs in the form of fingerprints anchored on the blockchain. We have thus composed a process allowing data certification (without disclosing its content) and data verification (with a posteriori revelation). This anchoring can rely on blockchain technology, which brings inherent properties of security, traceability, transparency, and data immutability.
