Real research for the real world
Legal and governmental issues
We wish to engage with regulators to find appropriate ways of regulating the holding and transaction of assets on the blockchain. We see this as a necessary precondition to our Mainstream goal. The expectation is that the application of such regulation will be completely (or nearly so) automatic, and that the blockchain itself will ensure that the powers of regulators and governments are not abused. This raises the topics of jurisdiction: whose laws apply to a particular user or asset, how to specify regulations in a way that allows automation, and how regulations apply to smart contracts. For smart contracts, how can we tell in advance that the result of a given contract is certain to satisfy regulations? How can we handle regulations changing during a single contract? How does data protection privacy legislation impact blockchain. Is blockchain a good infrastructure for e-government?
We believe there is considerable scope for devising decentralised algorithms for blockchains, particularly private and mainstream ones where is a stronger expectation of trust. We have developed a variety of these for things like escrow and fair exchange. Such algorithms are needed for creating applications which sit on top of blockchains, whether in asset custody, banking and innovative finance, managing big data, supply chain management and a myriad of other areas.
Game theoretic modeling
Most blockchains are designed and analysed using the traditional cryptographic setting with two types of the users: honest users who follow the protocol faithfully and malicious users who deviate from the protocol arbitrarily. However, it is necessary to take reflect on rational users who are interested in maximising their personal gains. In this respect, adopting a game modelling perspective allows creating a balanced incentive structure.
Consensus algorithms and mining
Consensus algorithms are about how a set of decentralised users maintain a common state or a log. In a typical permission-less setting, the mining process causes a huge waste of real resources like electricity. An interesting question is whether the consensus or the trust among users in a decentralised environment can be achieved without the overconsumption of resources. We have a specific proposal for this — Work your Stake. We want to study this and other solutions.
Most public-key cryptographic algorithms are vulnerable to attacks by quantum computers, including the widely used RSA and ECC (Elliptic Curve Cryptography) crypto-systems. Designing digital signatures and public encryptions which are quantum-secure is fundamental for enabling blockchain to become the long-term infrastructure of our future digital economy. More widely we regard the problem of creating ultra secure and upgradable cryptographic hashing and signature as central.
Regulation and KYC
Anonymity in blockchain attracts criminal activities such as money laundering and ransomware. These constitute an obstacle for blockchain’s mainstream adoption both because of association with bad people, and because these same bad people are helping run the blockchain. We believe that blockchain should provide accountability for individuals and public organisations whenever necessary.
Smart contract and formal verification
A smart contract is placed on the blockchain by the parties to it. It is then executed by the blockchain itself. These can be difficult to program and flaws cannot be undone once launched on the blockchain. An automatic verification tool for smart contracts is clearly necessary to minimise the risk of errors and to provide a developer friendly interface.
The economics of blockchain
Blockchains have brought a new phenomenon into the world: cryptocurrencies such as Bitcoin. We are interested in what we might term the microeconomics of a blockchain: how an economy can arise within a single blockchain which coins are spent for goods and services; the forces affecting the value of a cryptocurrencies and the control theory of stabilisation. The corresponding “macroeconomics” then raises the problem of the effect that cryptocurrencies and blockchain applications have on the wider economy. The latter will include the effect of competition from decentralised blockchain applications on traditional sectors.
Bridging digital and physical worlds for security
Conventional authentication schemes used in blockchains are based on cryptographic credentials generated in the ‘digital world’, such as PINs/passwords, long-term secret keys, or digital signatures. Yet, such digital credentials are easy to copy and steal. We have designed security protocols which depend on the properties of the ‘physical world’ such as location, distance, and time — such physical properties are much harder to spoof or manipulate as they are governed by physics, i.e., physical laws. For example, to access the blockchain, a participant should have a correct ‘physical fingerprint’ which can be its location or a distance to an asset. These properties can be measured and observed and as such we can continuously verify the authenticity and integrity of the blockchains.