Mobile Devices and Blockchain Technology

finjanmobileBlog, Mobile Security


New and evolving technologies like Voice over Internet Protocol (VoIP), 5G networks, Artificial Intelligence (AI), and WebRTC (Web Real Time Communication) have the potential to radically alter the speed and manner in which we interact with mobile devices, the internet, and the world at large.

One emerging field that’s already having an impact in financial circles – and one with the capacity to seriously impact the way our mobile telecommunications and wireless networks interact and operate – is blockchain technology.

What’s Blockchain?

In simple terms, blockchain technology is a mechanism for using multiple points in a network to act as independent verifiers of a particular kind of information. So, instead of having a central body (like a standards authority or a regulator) enforcing the rules to decide whether a certain kind of data or transaction is valid, each point or link in the blockchain has the power to do this by itself.

They can all do this because each part of the blockchain holds its own copy of the master database or ledger associated with all transactions of the kind that the blockchain has been put in place to facilitate. And the database or ledger in each blockchain can be configured to trigger specific actions in response to what’s observed at any given link. It’s for this reason that blockchain is sometimes referred to as “the distributed ledger.”

Now if you consider each link in the blockchain as representing an individual computer system, smartphone (using a blockchain-enabled app), or intelligent sensor, it’s clear that such a system has implications for mobile devices and technologies.

Blockchain and The Bitcoin Connection

Blockchain is the technology underlying Bitcoin – the cryptocurrency that’s simultaneously famous for making it possible for some forward-looking early adopters to make a killing by investing in it, and infamous for (allegedly) allowing drug traffickers, cyber-criminals, and shady dealers of all kinds to make a killing and hide the proceeds from financial regulators and law enforcement.

The reason for both sides of Bitcoin lies in the term “cryptocurrency” – and its implications for transaction security.

Peer-to-Peer Checking

The “crypto” in the “cryptocurrency” description of Bitcoin refers to encryption – the scrambling of data using mathematical algorithms so it can’t be read by anyone who overlooks or intercepts it. And encryption of data lies at the heart of the blockchain process.

Every account, process, or device that’s part of a blockchain has access to its central (distributed) ledger, the database recording all past transactions or interactions between members of the chain – and the same repository of data that records ongoing and future transactions.

Each time an interaction/transaction occurs between two points on the chain, a unique “block” is created, which is assigned a unique digital signature associated with its own private and public encryption keys. To begin a transaction (such as a payment or money transfer), the system generates a private key for it, which is then checked by every other part of the blockchain to verify that it corresponds to the public key also associated with that transaction.

The digital signature that’s created is unique to each transaction, and is encrypted. Every other node on the blockchain can refer to its copy of the ledger to verify if the signature and keys being used are valid – and authenticate or reject a transaction equally on that basis. And every single copy of the distributed ledger that’s held by the links on the chain is encrypted in its own right.

Once a transaction is complete, every single copy of the ledger is updated to reflect that, as well. At no time in the blockchain process is the transaction referred to an umbrella authority or clearing house. Any other node on the chain is capable of acting as the judge of whether a transaction is valid.

Digital Contracts and Transactions

Clearly, this kind of technology has the potential to do away with existing legal formalities like referrals to credit records held at banking headquarters, multiple copies of printed documents, or the notarization of handwritten signatures.

Blockchain technology also introduces the possibility of an entirely digital (and therefore mobile) process for negotiating and executing all kinds of contracts and transactions. As long as appropriate “ledgers”, databases, or digital records can be created and maintained, and encryption mechanisms are put in place to assign digital signatures and encryption keys to each transaction, the potential for its application is huge.

EncryptoTel and Authenticating Telecommunications

We’ve already begun to see some real-world applications of blockchain models in the business sector.

In April 2017, a company named EncryptoTel emerged with a plan to apply blockchain technology to authenticating transmissions in the telecommunications industry.

Describing itself as a “softphone infrastructure with blockchain-based VoIP communication,” EncryptoTel has been making moves to set up as a hosted PBX (Private Branch Exchange) provider, selling subscribers access to an internal private network capable of interfacing with external telecommunications networks via dedicated mobile apps and VoIP-compatible hardware.

The company intends to be able to offer VoIP or virtual phone numbers to users anywhere across the globe, via an infrastructure that uses blockchain technology to provide security and authentication between communications.

Blockchain and the Internet of Things (IoT)

Another potential application of blockchain technology lies with the Internet of Things (IoT) and its expanding global network of smart and connected sensors, tags, monitors, and infrastructure hardware devices.

As online and electronic payment technologies evolve to include mobile apps, smart cards, tokens, and wearable tags, the blockchain introduces new options for device authentication and transaction verification in a manner that’s quicker and more versatile than before. Individual payment histories may be recorded for each device, on the basis of an encrypted and distributed ledger that spans multiple device types, operating platforms, and users.

ADEPT and IoT Security

The problem of so many different (and often unsecured and low-rent) devices being always on and always connected to the Internet of Things has raised many questions about its security – and blockchain technology may have something to offer here, as well.

ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry) is an idea floated jointly by Samsung and IBM for providing secure and cost-effective interactivity between various devices. The proposed framework uses blockchain technology to create distributed networks of devices (sort of miniature IoT subsets) with their own secure databases and authentication protocols for negotiating “contracts” and “transactions” between the devices they include.

Wider Business Applications recently reported on a possible application of the blockchain in the travel industry. The idea essentially proposes using a blockchain ledger and authentication mechanisms to validate transactions based on wearable and biometric devices for passengers wishing to (for example) verify their identities, contact travel services remotely, or buy travel products and related services from any location, and at any time.

Such a scheme would require buy-in from airlines, travel firms, and authorities like the International Air Transport Association (IATA) and the U.S. Department of Homeland Security – but it’s notable that the latter two organizations have already been consulted by other governmental institutions over the possibility of setting up some kind of global distributed ledger to create a universally accepted “blockchain ID” for every registered traveler.

And the Future?

We shouldn’t get too excited just yet, as much of the infrastructure and technology described above is still very much at the drawing board stage. But with an estimated $1 billion in venture capital having been invested in the blockchain/Bitcoin sector since 2014 – and with the likes of Market Reports Hub predicting a $2.3 billion value for the global blockchain technology market by 2021 – it’s certainly worth watching.

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