by Elli Andoulaki (IBM Research – Zurich), Matthias Jarke (RWTH Aachen University & Fraunhofer FIT) and Jean-Jacques Quisquater (Université catholique de Louvain, Belgium, and research affiliate at MIT)

In the last decade, the world of data management has been revolutionised by the influence of universally available distributed and mobile information technology. The jump from desktop and laptop to the smartphone has been a major driver, and the current explosive growth of the internet of things is another. Big data analytics is no longer only a buzzword in computer science, but transcends all levels of business, politics, and society.

In contrast to the explosion of the query processing and data mining side of this development, its equally important impact on transaction management has received much less attention. The problems of misleading information inputs (fake news, chatbots), broken or fraudulent transactions are discussed in public, but scalable solutions around these distributed transaction challenges, most prominently the blockchain technology, has only recent begun to capture more attention, fostered by speculation about crypto-currencies such as Bitcoin.

Conceptually, blockchains can be understood as distributed ledgers, aiming like traditional ledgers at transparent and falsification-proof documentation, while assuming a model where distribution of trust is required. That is, in blockchain systems, operational trust is distributed to two or more mutually distrusting entities. Technically, scalability, anonymity, security and durability are ensured by distributed storage combined with suitable cryptographic primitives and protocols, but many problems remain to be investigated.

In the last couple of years, European industries (e.g., the B3i Blockchain insurance industry initiative) as well as the European Union (e.g., EU blockchain observatory, Blockchain for Industrial Transformation, blockchain architecture call) have started or announced a significant number engineering and policy initiatives. In this special issue of the ERCIM News, we provide an overview of some of the active European research in the field of blockchain engineering.

In the first paper, Jean-Jacques Quisquater – a pioneer of blockchain research since the late 1990s – provides an overview of the concepts, history, and current challenges. In innovative businesses and research, the engineering of blockchain-based solutions is subject to quite a number of commercial and open source initiatives. As a current major open source example, Andoulaki et al. (IBM Research, Zurich)) provide a glimpse on the just released Fabric for permissioned blockchains within the international Hyperledger initiative. This is followed by three sections on different blockchain application engineering domains (finance, public sector, contract and workflow management) and a special focus on security and privacy issues in the context of blockchains. The special theme ends with a couple of blockchain labs and strategic initiatives.

Among the blockchain applications in finance, bitcoin is surely the best-known. Complementing an overview of Bitcoin applications (Judmayer, Zamyatin, Nicholas, SBA Research Vienna),  a team from the INRIA and partners (Augot, Chabanne, and George) is specifically studying the question of Identity Management on the Bitcoin blockchain, while a Norwegian-Australian collaboration (Carr, Boyd, Boyen (NTNU Trondheim) and Haines (QUT, Brisbane)) aims to release some restrictions of the current technologies. To strengthen the theoretical foundations, a different space-oriented proof technique for crypto-currencies, called SpaceMint, is presented in a  paper from Inria (Fuchsbauer), whereas the integration of cryptocurrencies such as bitcoin in efficient real-time payment processes is one of the practical challenges (Bocek, Rafati, and Mori, University of Zurich).

The seemingly paradoxical combination of transparency and privacy offered by blockchains make them suitable for many applications beyond crypto-currencies. Generalising from crypto-currencies to general asset exchange, a team around FORTH-ICS (Askoxylakis, Alexandris and Demetriou) discuss this aspect in a circular economy, and an Italian team around CNR-IIT looks at healthcare applications (Lo Duca, Bacciu, and Marchetti) whereas Christian Welzel (Fraunhofer FOKUS, Berlin) weighs the threats and opportunities of blockchains from the viewpoint of the public sector in general. This section ends with a discussion (Nowostawski, NTNU Trondheim) how blockchains can be used to make institutions more autonomous.

The concepts of smart contracts and associated workflows is ubiquitous in almost all blockchain application domains. Linking back to the financial application domain, Fridgen, Urbach and Sablowsky (Fraunhofer FIT Bayreuth) present the blockchain-based workflow management system at a German bank. Three other papers investigate the important proof of work (Biryukov, University of Luxembourg), consistency enforcement (Osterland and Rose, Fraunhofer FIT Sankt Augustin), and smart contract security (Stifter, Judmayer, and Weippl, SBA Research Vienna). Another important challenge is the merger of multiple workflows or blockchains (Mellissen, Storro B.V.).

Despite full transparency of the transactions, blockchains also need to protect the privacy of their users and of the person-related data within them. Indeed, blockchains can even support the implementation of the new European Data Privacy Regulation with respect to transparency of person data usage (Roth), and a flexible transparency approach can be employed to control the degree of user privacy as well (Christofi and Gouget, Trusted Labs Versailles). At the corporate and the individual level alike, data sovereignty has recently become an important goal in European policy making and system engineering; a suitable Identity Framework can be combined with blockchains to get closer to this challenging goal (Joosten). Also at the corporate level, the paper by Di Francesco Maesa, Ricci, and Mori (CNR-IIT and Pisa University) demonstrates the usefulness of blockchain technologies for data access control in large systems.

A number of blockchain research labs, national initiatives, have sprung up recently in several European countries. The special issue ends with a description of two examples from the Netherlands (CWI Amsterdam) and Germany (Fraunhofer).

This special theme shows that there are still many challenges to overcome from the perspective of engineering as well as business models and public policy regulations. Nevertheless, a growing number of applications already indicates the enormous potential of blockchain technologies.

Please contact:
Elli Andoulaki
IBM Research – Zurich, Switzerland
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Matthias Jarke
Information Systems Group, RWTH Aachen University & Fraunhofer FIT, Germany
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Jean-Jacques Quisquater
Crypto Group, Université catholique de Louvain, Belgium, and research affiliate at MIT
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Next issue: July 2023
Special theme:
"Eplainable AI"
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