10thWEST AFRICAN INTERNET GOVERNANCE FORUM (WAIGF 2018) BURKINA FASO - - PowerPoint PPT Presentation
10thWEST AFRICAN INTERNET GOVERNANCE FORUM (WAIGF 2018) BURKINA FASO TOPIC : Digital Economy and Blockchain Technology Dr. Steven Bassey (Ph.D., DTh, CPMA, CEH, CHFI, USLPI/CSM, EC Council Certified) Chair Subcommittee on Data Protection
(Ph.D., DTh, CPMA, CEH, CHFI, USLPI/CSM, EC Council Certified)
Chair Subcommittee on Data Protection & Privacy Act, Senate Expert Working Group. Cyber/Forensic Research Fellow / Lecturer Center for Cyberspace Studies Nasarawa State University- Keffi dr.stevenba@gmail.com
Blockchain is the decentralized network and has no single point of failure. It is incorruptible, undeniably resourceful invention in digital era. It is entirely encrypted and digitalized form of data. All transaction are visible to all participants in the blockchain. The concept of digital economics is comprising under the rule of block chain technology which is entirely based on algorithm program These blocks are interlinked each other and peer network with storing transactions in each block. It cannot be deleted, replicated or be corrupted and hack blockchain technology operates without central body of network like central banks or government is a public ledger of all cryptocurrency transactions that have ever been executed. It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order & each node (computer connected to the network using a client that performs the task of validating and relaying transactions) gets a copy of the blockchain, which gets downloaded automatically upon joining the network. Block chain is a public ledger containing transaction records of digital money Blockchain security methods use encryption technology
A blockchain is the structure of data that represents a financial ledger entry, or a record of a transaction. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it, so the ledger itself and the existing transactions within it are assumed to be of high integrity. The real magic comes, however, from these digital ledger entries being distributed among a deployment
consensus about the state of a transaction at any given second; they all have copies of the existing authenticated ledger distributed amongst them.
Lawfulness, fairness and transparency personal information collected to deliver goods or service must be done so lawfully and fairly, and individuals must be told what their personal information will be used for; personal information can only be collected with the individual’s consent, and a record of this consent must be kept Purpose limitation personal information may only be collected for a specific and legitimate purpose and not for a new, incompatible purpose (unless consent for this new purpose is gained) Data minimization the processing of personal information needs to be limited to what is necessary in order to achieve the processing purpose Accuracy personal information must be collected accurately and kept up to date in order to avoid risk to the individual; inaccurate information must be erased or corrected without delay Storage limitation personal information may be stored only for as long as necessary in relation to the processing purpose, with the exception that it be kept longer for scientific purposes and/or archiving purposes in the public interest Data security holders of personal information are responsible for keeping it secure from internal threats such as unauthorized use, accidental loss and damage, as well as external threats such as cybercrime Accountability holders of personal information need to implement technical and organizational measures to ensure that processing activities are carried out according to the data protection regulation
ADVANTAGES OF BLOCKCHAIN DISINTERMEDIATION
a consensus mechanism to ensure the nodes stay in sync, transactions can be verified and processed independently.
PERFORMANCE Because of the nature of blockchains, it will always be slower than centralized databases. When a transaction is being processed, a blockchain has to do all the same things just like a regular database does, but it carries three additional burdens as well: Signature verification. Every blockchain transaction must be digitally signed using a public-private cryptography scheme such as Elliptic Curve Digital Signature Algorithm (ECDSA). Consensus mechanisms. In a distributed database such as a blockchain, effort must be expended in ensuring that nodes in the network reach consensus.. Redundancy. This isn’t about the performance of an individual node, but the total amount of computation that a blockchain requires.
Conclusion Indicators for Consideration Less Simple = Less Secure The more features and complexity in a distributed application, the more potential vulnerabilities What is our strategic goal? What functionality is necessary vs. just desirable? Jurisdiction issues Consider cross-border transactions, different laws and regulatory schemes Ensure clear and comprehensive choice of law, venue and jurisdiction provisions for resolving any disputes Vendor issues Blockchain vendors will want to disclaim as much risk and liability as possible Consider necessary service levels and performance required for business application in determining when to walk away Testing / Liability Robust testing environment to validate and debug application before launch Consider risk of improperly settled transactions, network failures, and other risks inherent to business application In customer and vendor agreements, clearly allocate risks and liabilities under all potential dispute and/or failure scenarios Privacy / Customer Data Understand benefits and need for comprehensive permission-based structure Verify identification of participants and set access levels to ensure compliance with all applicable privacy and security regulations
Conclusion Indicators for Consideration Less Simple = Less Secure The more features and complexity in a distributed application, the more potential vulnerabilities What is our strategic goal? What functionality is necessary vs. just desirable? Jurisdiction issues Consider cross-border transactions, different laws and regulatory schemes Ensure clear and comprehensive choice of law, venue and jurisdiction provisions for resolving any disputes Vendor issues Blockchain vendors will want to disclaim as much risk and liability as possible Consider necessary service levels and performance required for business application in determining when to walk away Testing / Liability Robust testing environment to validate and debug application before launch Consider risk of improperly settled transactions, network failures, and other risks inherent to business application In customer and vendor agreements, clearly allocate risks and liabilities under all potential dispute and/or failure scenarios Privacy / Customer Data Understand benefits and need for comprehensive permission-based structure Verify identification of participants and set access levels to ensure compliance with all applicable privacy and security regulations
Indicators for Consideration -1 Intellectual Property Ensure appropriate user permissions and access limitations to prevent harvesting of proprietary business data or trade secret information Vendor and customer agreements should address ownership of existing IP, later-developed IP, and comprehensive restrictions on use / disclosure Enforceability / Dispute Resolution of Smart Contracts Automated process, but what if something goes wrong? Allocate liability & risks, and outline procedures for enforcement / dispute resolution Have "in case of fire" plan – may need to unwind transactions or manually evaluate and create corrective entries. Consider including real-time monitoring and auditing functionality Regulatory Compliance Same rules, different game Critical to understand technology, how it works, what processes it is supplanting, and what it is doing to coordinate and update compliance regimes Transaction Due Diligence Ownership of data / property on Blockchain Critical to understand how Blockchain technology works Traditional approaches to due diligence may need to be altered
Lack of Identity Verification In conventional transactions, trust between the parties is generally established through identity verification. Similarly, identity verification is a core aspect of the 'know your client' requirement that applies to many businesses and transactions. Blockchain implementations are naturally geared towards enabling automated processing where the identity of the underlying actors are not relevant or automatically masqueraded. While identity can be verified separately and linked to the on-chain data, this creates privacy risks. Recommendation Legislatures must regulate blockchain as a technology itself, the implementation of blockchain in particular use cases may be the subject of additional regulatory scrutiny (for example, within the financial or health sectors).