For Want of a Stronger Chain

Jason Rupe, Ph.D., CableLabs, IEEE Blockchain Initiative Co-Chair

IEEE Blockchain Technical Briefs, July 2018


The permissionless, distributed blockchain has gained significant appeal and attention, but this attention is mostly premature to understanding the risk tradeoffs, and separate from the value to be obtained in the future after the industry invents better solutions.

Blockchain usually refers to a distributed ledger technology. In the technology tradeoff game, Satoshi traded cost for reliability (and a few other nice advantages) and hid the cost within a newly created free market. That move traded a centralized database for a distributed ledger, thus making fault tolerance a Byzantine general’s problem. While some literature uses blockchain to refer to distributed ledger systems, it serves us to use the terms public chain for distributed ledger blockchain based systems, and private chain for centralized (in terms of control) solutions.

Diffie and Hellman outlined methods for distributing keys over public channels.1 Blockchain relies on this technology as do competing solutions. The risk with using this method is well understood, and the risk is often considered acceptable as long as it is clear that the cost of breaking the security of this communication is much higher than the value of the information being protected. Note that there is at least a highly variable perception of value in Bitcoin which could affect the equation in that specific case.

Lamport, Shostak, and Pease outlined the Byzantine general’s problem, and showed that more than two-thirds of the generals must be loyal for agreement to happen.2 They also discussed applications to computer networks, and published a related paper on the subject.3 From these works, under assumptions such as the number of generals or network nodes, the risk is also well understood. However, in a permissionless network, there is no precise control of the number of generals or node-participants.

Pass and Shi analyze consensus in a permissionless network.5 They explain that permissionless consensus comes at a price of proof-of-work, requiring both limiting the upper bound on network delay, and transactions taking longer than the upper bound network delay. They then demonstrate that proof-of-work is required if lacking authentication.

Natoli and Gramoli point out that there is no guarantee of consensus in public blockchains, so they offer a smart contract approach and Ethereum as an alternative.6 Likewise, Saito and Yamada explain that participants cannot commit to decisions unless certain assumptions are true: correct participants must have more resources than faulty ones and all correct participants must be reachable to one another.7

So, with permissionless systems, which by nature are distributed (public blockchains), we accept the cost of proof-of-work (which means much of the work is not collecting value), a long transaction time (leading to poor performance or an increase in risk if waiting is not possible), and no guarantee of consensus unless certain conditions are true which are difficult to verify. Further, we accept certain risks which are difficult to quantify. It is a bit like sticking one’s head in the sand to avoid danger.  

Clearly, by moving to a permissionless system (public blockchain), we exchange a perceived risk of trusting a central authority with trusting a system. And that system is run like a game with uncountable players each with their own paradigms. While we can create methods to mitigate some of these risks, the cost of non-value-adding work from a permissionless system has yet to be solved; moving from a permissionless system is required to avoid the proof-of-work burden.

Xu and others provided a taxonomy for blockchain systems to support blockchain architecture.4 Their work outlines several degrees of freedom which could be exploited in alternative architectures. In doing so, they also highlight more risks; as a complex system, blockchains have many attack surfaces and failure modes.

Key in the work of Xu, et al., however, is the recognition that there is a continuum from fully private to fully public blockchains, and that the verifier can be conceptually decoupled from the rest of the system. Xu and her coauthors point out that cost efficiency, performance, and reliability can be well controlled and even optimized in a centralized private blockchain. However, they place significant value in what they refer to as the fundamental properties of blockchain: immutability, non-repudiation, integrity, transparency, and equal rights.4 However, these properties cannot be guaranteed in existing permissionless systems. If these five properties are important, then the work ahead is to find a way to gain these properties in a non-permissionless (not necessarily permissioned) system.

Here are some thoughts:

  • Immutability – by making the information public, immutability is supported. However, there can be errors, mistakes, software bugs, etc., all of which require mutability. We need something more like mutability under integrity, security, and reliability. The task then is to design a system with features that bring this property to all related technologies, decoupled from the rest of the design.
  • Non-repudiation – as cryptographic techniques can be decoupled from the design and applied intelligently to the correct parts of any design by good security engineers using best practices, non-repudiation need not be achieved only from a permissionless system.
  • Integrity – note that our treatment of immutability is now linked to our treatment of integrity here. Cryptographic techniques provide the integrity of the system in large part. Assurance of integrity can thus be decoupled as well.
  • Transparency – by making the data public, transparency is achieved to an extent. However, this statement further assumes the data are easily translated into information, and in a way that can be searched easily. There is work to do here in all ledger systems perhaps, but there is nothing inherent to permissionless systems that guarantee transparency; and further, there is nothing that prevents other systems from achieving transparency. In fact, a transaction system can be designed with transparency specifically in mind and it need not be based on blockchain.
  • Equal Rights – by being permissionless, anyone can participate. That means anyone can use the system, gain value from the system, damage the system, spoil its resources, or try to command those resources to their bidding. This is a core issue regarding public versus private blockchains. However, as these rights can be weighted by compute power, or stake, for examples, there is no blockchain with truly equal rights. Systems can be designed with participant rights in mind, but there is no evidence that indicates such a system must be a permissionless one.

Thus, by selective application of design and engineering practices to blockchain technologies, we can design systems to meet these fundamental properties without relying on permissonless systems.

However, fundamental to designing these systems is the definition of trust, and particularly trust in what or who, and how do you decide to trust? Clearly, blockchain technology has started an area of research; but it is only a start.



Thanks to my colleagues at CableLabs for their review of a draft version of this paper: Ann Finnie, Simon Krauss, and Zane Hintzman.



[1] W. Diffie, and M. Hellman, “New directions in cryptography,” IEEE Transactions on Information Theory, Vol. 22, No. 6, pp. 644-654, November 1976.

[2] L. Lamport, R. Shostak, and M. Pease, “The Byzantine Generals Problem,” Transactions on Programming Languages and Systems, pp. 382-401, July 1982.

[3] M. Pease, R. Shostak, and L. Lamport, “Reaching Agreement in the Presence of Faults,” Journal of the Association for Computing Machinery, Vol. 27, No. 2, pp. 228-234, April 1980.

[4] X. Xu, I. Weber, M. Staples, L. Zhu, J. Bosch, L. Bass, C. Pautasso, and P. Rimba, A Taxonomy of Blockchain-Based Systems for Architecture Design, presented at Data61, CSIRO, Sydney, NSW, Australia 2017 IEEE International Conference on Software Architecture (ICSA), 2017.

[5] R. Pass, and E. Shi, Rethinking Large-Scale Consensus, presented at 2017 IEEE 30th Computer Security Foundations Symposium (CSF), 2017.

[6] C. Natoli, and V. Gramoli, The Blockchain Anomaly, presented at 2016 IEEE 15th International Symposium on Network Computing and Applications (NCA), 2016, pp. 310-317.

[7] K. Saito; H. Yamada , What’s So Different about Blockchain? – Blockchain is a Probabilistic State Machine –, presented at Orb, Inc., Tokyo, Japan 2016 IEEE 36th International Conference on Distributed Computing Systems Workshops (ICDCSW), 2016, pp. 168-175.



Jason RupeDr. Jason Rupe received his Ph.D. from Texas A&M University. He is a Senior Member of IEEE, has served as Associate Editor for IEEE Transactions on Reliability, and was its last Managing Editor. Jason was the Director of the Technology Modeling Team at Qwest while also serving as the reliability expert.  Jason worked for over seven years as the Director of Operational Modeling at Polar Star Consulting. Currently, he is the Principal Architect for Proactive Network Maintenance at CableLabs. He has taught quality and reliability, published technical papers, contributed book chapters, and refereed publications and conference proceedings.  Currently, Jason is serving the IEEE as a co-chair of the Blockchain Initiative, is on the Reliability Society Administrative Committee, is the Chair Elect of the IEEE Denver Section, and on the management committee for the Prognostics and Health Management conference.



Raymond ChooKim-Kwang Raymond Choo received the Ph.D. in Information Security in 2006 from Queensland University of Technology, Australia. He currently holds the Cloud Technology Endowed Professorship at The University of Texas at San Antonio (UTSA). In 2016, he was named the Cybersecurity Educator of the Year - APAC (Cybersecurity Excellence Awards are produced in cooperation with the Information Security Community on LinkedIn), and in 2015 he and his team won the Digital Forensics Research Challenge organized by Germany's University of Erlangen-Nuremberg. He is the recipient of the 2018 UTSA College of Business Col. Jean Piccione and Lt. Col. Philip Piccione Endowed Research Award for Tenured Faculty, ESORICS 2015 Best Paper Award, 2014 Highly Commended Award by the Australia New Zealand Policing Advisory Agency, Fulbright Scholarship in 2009, 2008 Australia Day Achievement Medallion, and British Computer Society's Wilkes Award in 2008. He is also a Fellow of the Australian Computer Society, an IEEE Senior Member, and an Honorary Commander of the 502nd Air Base Wing, Joint Base San Antonio-Fort Sam Houston.



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