Blockchain in Telco: Let’s Start Talking About Real Applications
At Amartus, we have always been exploring how cutting-edge technologies can be best used to add value to network solutions. We couldn’t ignore blockchain, the latest disruptor on the market.
It’s impossible to delve into application of a technology without fist understanding its basics. In this part of our blog series, we’ll try to come up with a valuable, rational blockchain definition that will spell out all its benefits for network businesses.
by Konrad Herba, our Senior Project Manager
Blockchain definition? Cryptic meanings and opposing views
Type blockchain definition in Google and check the top three definitions that pop up.
Here’s what we found:
- Investopedia: A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions.
As sophisticated as it sounds, this definition is not a tiniest bit descriptive. Besides, it may be well-suited for the financial sector, but does not help much networking. Let’s dig in further.
- Wikipedia: A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography.
Wikipedia to the contrary provides too simplistic a definition. It is all true, and very accessible information, but not sufficient to fully understand how blockchain in this perspective could benefit the network.
- Forbes: Blockchain is a public register in which transactions between two users belonging to the same network are stored in a secure, verifiable and permanent way.
Forbes’ definition seems to be the most comprehensive. However, to gain a better understanding of blockchain in the context of network, and to highlight the most important assets of the technology, let’s extract the vital information out of each definition, and compile it into our own statement.
Blockchain – A system with no central entity
Investopedia as a portal focusing on the financial industry builds their blockchain definition around the cryptocurrency application. Indeed, blockchain is the technology behind all the cryptocurrencies (like Bitcoin, Litecoin, Ethereum, etc.).
However, linking blockchain with cryptocurrencies only seems to be limiting and does not give justice to its immense potential.
The rest of the definition states: “A blockchain is a digitized, decentralized, public ledger(..).” The digitized part is a truism. Obviously, blockchain applies to computer technologies. This word adds nothing to our understanding of the notion.
On the other hand, decentralized is a critical element of blockchain. Blockchain is a system with no central entity. Let’s use an example from networking. The technology is based on a shared-trust model among peers.
Each user maintains a ledger of all information/transactions that occured inside of a blockchain. If you would like to check what events have occured on your “Blockchain account”, it is enough to refer to the local copy of the ledger and display whatever is of your interest.
The mentioned decentralization is one of blockchain features that makes possible secure execution of transactions in an untrusted environment. In other words, you do not have to trust partners (other bockchain users) to trust that the deal went right.
When we look at the telco sector, we can quickly find market for blockchain application. Connectivity Service Providers (CSPs) all have their own, competing business goals. However, at the same time they must cooperate to deliver what their customers require (e.g., connectivity between distant locations).
In the past, there appeared some concepts of introducing a central entity for the sake of orchestrating services, which span across multiple network domains (an orchestrator of orchestrator). However, this idea never got to the “main stream”, because of the conflicting interests of each of the involved parties. The distributed model represented by blockchain seems to be the most accurate to cater to that case.
Keywords: technology, decentralized
Block + chain = A list of linked blocks
Wikipedia’s definition of blockchain focuses on the way in which information is organized in the technology. The definition states that data is stored as a list of records, called blocks.
This means that each individual piece of information – such as a transaction – is stored in a single block. A block makes a grouping of information. Going further, blockchain is a list of blocks, which are linked. And when they are linked, they form a chain. Cryptography helps here.
“Imagine a diary. From rather shorter periods of life one choses important things and writes them down. If we called each entry a block than the dairy would be a list of blocks. They would be linked in a sense that chronology was applied. From such a blockchain you could retrieve any important information since the diary was started.“
Blockchain works using a similar principle. In the Bitcoin world, blocks contain financial transactions that Bitcoin owners performed (Alice pays Bob, Jenny pays Bill, etc.). And they are linked according to the principles of cryptography.
Blockchain and Call Data Records
In the telecommunications industry, billing is based on the so-called CDR (Call Detail Record or Call Data Record). The record is created when, for examples, a call is being made or a text has been sent. CDR generates and archives the history of the network events. It looks like blockchain can be of a great help here. It not only provides the means to store data (blocks) in such a way that it remains unchanged (through linking), but thanks to Smart Contracts it allows the billing process to be further improved.
And what about the security of sensitive data? Zero Knowledge Proof algorithms (ZKP) allow to achieve both, the benefits of blockchain and data anonymity.
Blockchain in telco – no longer a distant future
The use of blockchain in storing and processing CDR-like data has been already defined. We recommend referring to the use case by one of the TM Forum Catalyst proof of concept projects: Blockchain Unleashed! What is interesting, is that this is only one out of five defined use cases!
Keywords: list, blocks, linked
Is blockchain secure? What happens in blockchain…
Let’s come back to our definitions. The third one adds an important aspect to the picture: “stored in a secure, verifiable and permanent way”. As always when a new technology breaks in, sceptics raise questions (often justified) about its security.
In short, blockchain uses cryptographical functions to determine the way for the chain to be created, and at the same time, to makes it secure. Another element that increases blockchain’s security is the fact that it is immutable. What is essentially means is that transactions are stored in a permanent way, and cannot be tampered with.
The distributed nature of blockchain combined with the method of storing the data as a cryptographically secured chain of blocks form a secure, verifiable, and immutable source of information but also, through Smart Contracts, provide means to create applications. The possibilities seem to be limitless.
Security is an extensive topic, which requires in-depth explanation, so we will cover this part in another article. Smart Contracts is another area that deserves more time.
One could say that blockchain is like Las Vegas, “What happens in blockchain, stays in blockchain.” With one caveat, though. Since blockchain is distributed – everyone finds out what’s occurred.
Keywords: stored, secure, verifiable, permanent, immutable
Blockchain definition revamped
We have now collected some key points that help us understand blockchain better. These are: technology, decentralized, list, blocks, linked, stored, secure, verifiable, permanent, and immutable.
Blockchain allows us to store data in a decentralized manner. Each user stores a local copy of the entire list of linked information blocks. Since cryptography is involved, and the data stored is permanent and immutable, blockchain is a secure and verifiable technology.
Now that we have developed an all-inclusive definition, we will come back to our blog in a few weeks to provide more insights on how blockchain can be applied in networking. Check back soon!