Security firm Guardtime courting governments and banks with industrial-grade blockchain

Guardtime is a cyber-security provider that uses blockchain systems to ensure the integrity of data. In a recent announcement, its technology will be used to protect the UK's nuclear power stations, flood-defence mechanisms and other critical infrastructure.

The company has its roots in US defence systems and Estonia's expertise in state-level digital security. Estonia has built a seamless digital infrastructure since it regained independence in 1991. In 2007, the country experienced a state-level cyberattack from Russia and did an impressive job of defending itself.

This caught the attention of the US defence and intelligence services, which is how Guardtime CEO Mike Gault came to join forces with a contingent of Estonian cryptographers and form the company seven years ago. It has attracted former US defence personnel such as Matt Johnson, now chief technology officer (CTO), and business development chief Jamie Steiner. Steiner and Gault previously worked on Wall Street as traders, at JP Morgan and Barclays respectively, and it's worth noting that Guardime had been looking at distributed consensus models – blockchains, in today's parlance – before Bitcoin was actually invented.

Guardtime uses Keyless Signature Infrastructure (KSI), a blockchain technology that provides massive-scale data authentication without reliance on centralised trust authorities. Unlike traditional approaches that depend on asymmetric key cryptography, KSI uses only hash-function cryptography, allowing verification to rely only on the security of hash functions and the availability of a public ledger. In this way, Guardtime guarantees data integrity without the need to keep secrets.

Estonian insights

Mike Gault tells IBTimes: "For the last 40 years nobody has really figured out integrity, because they have tried to use the same tools: they have tried to keep secrets in order to verify that their data is correct. And it just doesn't work. This was the insight from the Estonian side. Actually, confidentiality and integrity are opposite problems: the more people that witness a crime, the stronger the integrity of the evidence. But the less confidential the evidence becomes because more people know about it.

"This insight led us to this technology and today this technology secures the Estonian IT systems. Government-held records, healthcare logs, financial transactions are registered into the blockchain, and can be independently verified for what happened to the data without having to go back to the administrators of the respective systems and trust them; in fact, without having to trust any party - the same principle as Bitcoin. This is widely deployed in Estonia now with great success."

Another wake-up call to the US government were the Edward Snowden revelations. And again, Estonia was viewed as candidate for performing state-level data integrity. It was around this time that former US Air Force intelligence officer Matt Johnson, a specialist in reverse engineering and developing anti-tamper technology, came to Estonia to examine approaches to data integrity. After doing due diligence on Guardtime, Johnson ended up joining the company as CTO.

Johnson says the integrity of an event or a digital asset registered using KSI allows verification of three things: proof of time, identity and authenticity. Guardtime's permissioned blockchain can do this while preserving confidentiality of the data at an industrial scale. As well as defence systems and telcos, financial-services firms are also looking at the technology.

Time, identity, authenticity

Johnson says: "Guardtime's keyless signature is a small portable piece of evidence, based on well-tested and proven math. It allows you to prove three properties for that data against the blockchain: 'time' – a context of time when that asset was actually registered in the blockchain; 'authenticity' – whether or not that data remains authentic; then 'identity' – or at least the hierarchical identity, where that asset was first registered on the blockchain.

"When we focus on integrity, we are trying to attest to the truth and accuracy behind the data, and systems that are actually processing that data. As a data-management tool, those three contexts of time, identity and authenticity, along with being able to process literally billions of transactions every single second, make our technology highly optimised for that data management and cyber-security. It's really that industrial capacity that sets us apart from other blockchain providers.

Steiner says both public blockchains and private distributed ledgers have one thing at least in common – they are designed to facilitate transfers of value between parties, so there's the concept of who owns what. "The thing that is very different about our blockchain is that it's not a ledger in the sense that there's a concept of somebody owning something and you can transfer it to someone to else. It's simply a registration of that data in the blockchain to be able to prove those three things: time, identity and authenticity."

"That means that we can do synchronous consensus, and it makes it a whole lot more scalable. It's a great trust anchor, a foundation for building other technologies on, and it's a much more general-purpose tool. In a lot of cases some of those other technologies that you see out there, which really come to the discussion with a predefined way of looking at world, or predefined problem that they are trying to solve. By contrast, KSI is much more general purpose and can be used in a lot of different areas, and wide varied use cases," says Steiner.

Privacy

Confidentiality is a key element of blockchain design. A lot of very clever people are working on things like homomorphic encryption, zero knowledge proofs and so forth. Johnson says: "One of the favourable characteristics of the technology is that, because we only use hash-function cryptography, the only thing that is used to update the blockchain publication each second is essentially a hash value from the contributing data. That hash value cannot be reversed, to disclose the data that the hash value protects. The only thing that's disclosed to the network is a hash value from the organisation that's seeking to extend a keyless signature for the data."

Steiner adds: "In a lot of financial-services contexts – especially when you are talking about transactions – even if you don't know what the transaction data actually is, information about the volume of transactions can be sensitive. This could leak information about how much of a certain trade is being done, or who is involved in a big programmed trade, for example."

He explains that using KSI, no matter how many signatures are requested in a particular second, only one request a second leaves the customer's premises . "It's actually impossible even to tell anything even about volumes of usage of KSI from an external view, and likewise on the verification side. All of that is done locally, so again there is no information that is kind of leaked or telegraphed outside their internal network about any volumes or usage levels within, say, a bank."

Quantum-computing proof

In addition, a move away from public key infrastructure means that Guardtime's security system is future-proofed against potential threats from things such as quantum computing. Demonstrating how this threat can be mitigated with quantum-resistant algorithms was listed as one of Microsoft's major predictions for 2016 and beyond.

Gault says: "People have been talking about quantum computing for a while, but I think they are starting to become more serious and people are looking at them. Maybe not your average enterprise CIO – he doesn't lose sleep over quantum computing, but governments do.

"This whole asymmetric key cryptography becomes completely broken whenever a realistic quantum computer is built. That's the beauty of hash functions, because they are completely immune to quantum computing."