Over the last couple of years, blockchain has become the next big emerging technology, moving beyond crypto-currencies, and being applied to everything from human resource management, legal services and even security. But is blockchain worth the hype? In simple terms, as per Gartner Hype Cycle of Emerging Technologies 2018, blockchain is currently in their “peak of inflated expectations” and is projected to be highly likely to require another “5 to 10 years” to mature1. However, Shreemen Prabhakaran argues that we should start thinking about how emerging technologies like blockchain can improve aviation security so we can build it into long-term projects like Checkpoint of the Future and One Stop Security.
This article is divided into two sections. The first explains what blockchain technology is. The second will outline possible aviation security applications for blockchain technology, specifically looking at cargo, and One Stop Security. The use of real-world applications will hopefully inspire readers to think of other applications for this emerging technology and move beyond the hype.
What is Blockchain?
The concept of blockchain was first fully conceived as enabling technology for the Bitcoin cryptosystem, as introduced in 2008 by a mysterious character called Satoshi Nakamoto2. Therefore, blockchain is really a software design to create a purely peer-to-peer version of electronic cash – originally Bitcoin. Over time, this has expanded to other peer-to-peer transactions involving both public and private networks involving the incentive of tokens (coins) to verify transactions.
“…blockchain was first fully conceived as enabling technology for the Bitcoin cryptosystem, as introduced in 2008 by a mysterious character called Satoshi Nakamoto…”
Another way to think of blockchain technology is as a secure public ledger platform shared by all parties through the internet (public) or an alternative distributed network of computers (private). With the notable exception of token-free applications, the key function of blockchain technology is to remove the need for a trusted third party to guarantee a transaction. In Nakamoto’s original concept, blockchain worked as a unique software design with the advantage of removing third party intermediation to allow for the creation of digital cash.3 But it has moved beyond this, especially when you consider blockchain as a public or private distributed network; it is perhaps better understood as an institutional or social technology for coordinating people.4 Blockchain can be understood as a foundational element of the crypto economy. The crypto economy is an economic system, which is not defined by geographic location, political structure, or legal system, but which uses cryptographic techniques to constrain behaviour in place of using trusted third parties5. This economic structure shares some similarities with the aviation security industry, considering the global nature of aviation. We will discuss this in greater detail in the application section of the article.
Here are the fundamentals of how blockchain technology works, using the original application (Bitcoin) as an example: The essence of Bitcoin’s blockchain operation is that whenever two network members transact, they announce their transaction to all network members (nodes), who record the transaction into a block with a limited capacity. Once the block is full, nodes simultaneously perform Proof-of-Work – mathematical operations that are hard to solve but whose correct solution is easy to verify.
These mathematical operations are unrelated to the bitcoin transactions, but are indispensable to the operation of the system, as they force the verifying nodes to expend processing power which would be wasted if they included any fraudulent or invalid transactions. This is what builds trust in the network.
The first node that succeeds in solving a Proof-of-Work problem broadcasts the solution, along with the block of transactions, to all other nodes. Nodes can quickly and cheaply verify the accuracy of the transactions and solutions, and when 51% of the processing power of the network votes to approve a block, nodes begin recording new transactions to a new block, amended to all previous blocks.
The first node that solves the Proof-of-Work problem is rewarded with a specific quantity of the currency of the network. This reward makes verifying transactions potentially profitable, and leads to it being commonly referred to as ‘mining’, though ‘verifying’ is arguably a more functionally accurate description. Blockchain, by its design and architecture – consensus method and cryptographic techniques – is considered a ‘Trust Machine’.
Verifying the validity of a block’s Proof-of-Work is far cheaper than solving it correctly, which makes determining the correct status of ownership of the currency both economical and lucrative. Functionally, Blockchain technology is a technology of verification; since it is far more expensive to solve the Proof-of-Work than to verify its correctness, honesty is the only strategy for profitability for nodes.6
The operation of the decentralised blockchain is entirely dependent on solving the Proof-of-Work and voting on the validity of the blocks by nodes expending computing power. Transaction validity is not established by any authority, but by the consensus of the network members with the majority CPU. With this mechanism, Bitcoin has accurately recorded more than 140 million transactions in almost eight years7.
The Bitcoin algorithm is not a defining feature of the blockchain, but an application of it. Blockchains are the visible consequence of the actions taken by the users of a network. The blockchain is structured around a network, which can be either public or private. The nature of the network is important, especially as we consider blockchain applications within aviation security.
Public decentralised networks (ledgers) are accessible to every internet user, which is the case for Bitcoin. In a public or ‘permissionless’ blockchain ecosystem, anyone at any time and from anywhere in the world, having a computing device, can act as a participating node – joining and leaving the network at his or her own will.8 As explained, these fully decentralised blockchains rest on a consensus mechanism of Proof-of-Work.
In a fully private ledger, write-permissions are monitored by a central locus of decision-making. A private blockchain amounts to a permissioned ledger, whereby an organisational process of Know-Your-Business (KYB) and Know-Your-Customer (KYC) enables the white listing (or blacklisting) of user identity9. In a private or permissioned blockchain ecosystem, only ‘permitted’ or ‘invited’ nodes can be part of the network. These trusted nodes usually have both read and write access. However, a role-based policy or even specific node-based approach can also be applied. The difference between public and private blockchains is the extent to which they are decentralised or ensure anonymity10. The private ledger values predictability and authority whilst the public emphasises participation, representation, and flexibility. Naturally, for the aviation security industry only private ledgers would be applicable.
Applying Blockchain to Aviation Security
If blockchain is simply a design of a network that supports verified transactions of data, there are some clear benefits to its adoption within the aviation security industry. Blockchain technology will increase the transparency and reduce the involvement of third-party verification. Both of these outcomes support the industry’s move towards greater international harmonisation of security measures. This article will focus on blockchain application in cargo security, and in achieving One Stop Security.
Cargo
A key problem in cargo security is verification and authenticity. Reliably establishing where cargo was originally packed and screened prior to arriving at the aircraft for loading is crucial for effective cargo security. The inability to do this has resulted in some countries implementing screening requirements at the last port of departure.
Establishing a private blockchain network for freight forwarders and cargo agents creates a registry for each piece of cargo and will increase transparency. It will create a network where agents could validate consignments before they arrive at the airport building, based on the concept of trusted/known consigners. The blockchain will create a formal registry enabling the identification and the tracking of possession of goods throughout the supply chain11. It would be in the interest of the network, especially with the incentive of tokens, to validate/verify the authenticity of the contents of shipments. With the greater use of wireless technology and the Internet of Things, blockchain technology can also be used to record and track environmental conditions, such as temperature or location of consignments, further ensuring security.
“…distribute and validate passenger and baggage screening data across the airport network…”
The key elements of applying blockchain technology to cargo security is to increase transparency across the network, and the veracity of screening earlier in the network. This would improve facilitation and could future-proof the cargo industry as cargo security responsibility and verification would be spread wider across the network, and not focused at choke points or hubs alone. As mentioned earlier, blockchain technology can create a crypto economy that crosses geography, politics, and legal systems. Having a private ledger governed and regulated by an international body will ensure more transparency and better verification across the global air cargo network.
One Stop Security
The idea of an internationally harmonised aviation security system where passengers and baggage transferring between airports do not need to be rescreened is very beneficial for the industry. However, it is fundamentally based on trust between screening authorities in different countries. One way to encourage and support this trust is to use blockchain technology to distribute and validate passenger and baggage screening data across the airport network.
A private ledger creates a governance structure for passenger and baggage screening data to be verified12. The private ledger would allow screening authorities to share data across a network, which could then be verified either by national or international auditors. This process would improve the overall security of the airports within the network as there is greater harmonisation of screening outcomes as well as improved passenger and baggage facilitation. The focus will be similar to the cargo security example: to increase transparency of screening outcomes between airports. This may be easier that it seems, since there are limited numbers of screening technology providers and there already exists a connectivity between screening machines.
The larger issue will be establishing the governance structure with blockchain technology13, and multi-lateral agreements to scale the network and support harmonisation of security outcomes. However, another way to view the application of blockchain technology in this context is as an audit and transparency function, where harmonisation already exists. Blockchain technology applied in this context will spread the burden of verification of security screening outcomes across the network. Fundamentally, blockchain technology could be used effectively to improve harmonisation and facilitation across the aviation security industry; however, it would also involve a change in approach, acknowledging the need to increase trust, transparency and verification across the industry.
Blockchain is a new, but potentially revolutionary, technology as a cryptographically secure decentralised ledger upon which can be placed any information requiring validation.14 In the context of aviation security it has the potential to improve the current operating model. However, this involves thinking of blockchain as a technology to create an institutional or economic model where cryptographically secure data is verified for tokens or another form of incentive.
While this might be five to ten years away, it is important that we think about blockchain application now as it might be a way to future-proof strategic plans for aviation security at airlines and airports, on both a national and international level.
Shreemen Prabhakaran is an aviation security practitioner with 15 years’ experience in industry and government. Currently he is a PhD Candidate with Edith Cowan University, working with Global Elite Group and the Managing Director of The Big Sky Advisory. shree@thebigskyadvisory.com
- Panetta, K. (2018, August 16). 5 Trends Emerge in the Gartner Hype Cycle for Emerging Technologies, 2018. Smarter With Gartner. Retrieved January 7, 2019, from https://www.gartner.com/smarterwithgartner/5-trendsemerge-in-gartner-hype-cycle-for-emerging-technologies-2018/
- Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. White Paper, Bitcoin. Retrieved May 31, 2018, from https://bitcoin.org/bitcoin.pdf
- Ammous, Saifedean, Blockchain Technology: What is it Good for? (August 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2832751
- Davidson, Sinclair and De Filippi, Primavera and Potts, Jason, Economics of Blockchain (March 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2744751
- Babbitt, D.& Dietz, J. (2014). Crypto-economic Design: A Proposed Agent-Based Modelling Effort. Swarm Fest 2014: 18th Annual Meeting on Agent-Based Modelling & Simulation. University of Notre Dame. USA. June 29 – July 1. Retrieved from http://www3.nd.edu/~swarm06/SwarmFest2014/Babbitt.pdf
- Ammous, Saifedean, Blockchain Technology: What is it Good for? (August 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2832751
- Ammous, Saifedean, Blockchain Technology: What is it Good for? (August 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2832751
- Pilkington, Marc, Blockchain Technology: Principles and Applications (September 18, 2015). Research Handbook on Digital Transformations, edited by F. Xavier Olleros and Majlinda Zhegu. Edward Elgar, 2016. Available at SSRN: https://ssrn.com/abstract=2662660
- Davidson, Sinclair and De Filippi, Primavera and Potts, Jason, Economics of Blockchain (March 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2744751
- Pilkington, Marc, Blockchain Technology: Principles and Applications (September 18, 2015). Research Handbook on Digital Transformations, edited by F. Xavier Olleros and Majlinda Zhegu. Edward Elgar, 2016. Available at SSRN: https://ssrn.com/abstract=2662660
- Pilkington, Marc, Blockchain Technology: Principles and Applications (September 18, 2015). Research Handbook on Digital Transformations, edited by F. Xavier Olleros and Majlinda Zhegu. Edward Elgar, 2016. Available at SSRN: https://ssrn.com/abstract=2662660
- Pilkington, Marc, Blockchain Technology: Principles and Applications (September 18, 2015). Research Handbook on Digital Transformations, edited by F. Xavier Olleros and Majlinda Zhegu. Edward Elgar, 2016. Available at SSRN: https://ssrn.com/abstract=2662660
- Davidson, Sinclair and De Filippi, Primavera and Potts, Jason, Economics of Blockchain (March 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2744751
- Davidson, Sinclair and De Filippi, Primavera and Potts, Jason, Economics of Blockchain (March 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2744751
References
Ammous, Saifedean, Blockchain Technology: What is it Good for? (August 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2832751
Babbitt, D.& Dietz, J. (2014). Crypto-economic Design: A Proposed Agent-Based Modelling Effort. Swarm Fest 2014: 18th Annual Meeting on Agent-Based Modelling & Simulation. University of Notre Dame. USA. June 29 – July 1. Retrieved from http://www3.nd.edu/~swarm06/SwarmFest2014/Babbitt.pdf
Davidson, Sinclair and De Filippi, Primavera and Potts, Jason, Economics of Blockchain (March 8, 2016). Available at SSRN: http://dx.doi.org/10.2139/ssrn.2744751
Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. White Paper, Bitcoin. Retrieved May 31, 2018, from https://bitcoin.org/bitcoin.pdf
Panetta, K. (2018, August 16). 5 Trends Emerge in the Gartner Hype Cycle for Emerging Technologies, 2018. Smarter With Gartner. Retrieved January 7, 2019, from https://www.gartner.com/smarterwithgartner/5-trendsemerge-in-gartner-hype-cycle-for-emerging-technologies-2018/
Pilkington, Marc, Blockchain Technology: Principles and Applications (September 18, 2015). Research Handbook on Digital Transformations, edited by F. Xavier Olleros and Majlinda Zhegu. Edward Elgar, 2016. Available at SSRN: https://ssrn.com/abstract=2662660