Welcome to the Government Blockchain Association (GBA) Meet Up May - - PowerPoint PPT Presentation

Welcome to the Government Blockchain Association (GBA)

Meet Up  May 15th, 2017

Blockchain for Homeland Security, Defense and Law Enforcement

Agenda

• Brief Review – What is blockchain and why is it important?
• What are the defining characteristics of L.E., H.S. and Defense
• What do L.E., DHS and DoD have in common?
• What do criminals have in common?
• Law enforcement update
• Homeland security update
• Defense update
• Discussion

Industry Government Technology Ethics/Prudence Annual Leadership Summit Working Groups White Papers Forums Education/ Training Certification Research/ Surveys Networking

• Global
• Nonprofit
• Wide view
• Advocacy
• Access
• Neutrality
• Need help
• Collab.
• Exposure
• Inputs
• Show Me The $$
• Large/Small

Conversations /Conferences /Collaborations

• Standards
• Best Practice
• Pilots / Proofs of Concepts

Opinion & Enforce- ment Opinion Law Enforcement/Homeland Sec./Health Records/Prop. Rights/Convenience/Taxation/Benefits/Commerce/Intelligence

Expertise/Knowledge Government Blockchain Association (GBA)

Citizens Citizens Citizens

Government Blockchain Association (GBA) Course Catalog (future)

What is blockchain and a cryptocurrency?

• A voluntary “value exchange system” that highly leverages:
• Software and mobile devices
• A community of participants
• Digitally interconnected participants via infrastructure software (i.e.,

blockchain software over the Internet)

• Cryptography (and non-repudiation)
• Distributed ledger technology (DLT)
• No need to trust the other party in the transaction
• No need for third party validation and transaction

management (and their delays and fees!)

• Treated like a currency to some, treated like an

commoditized asset, to others

An Ideal Use Case to Leverage Blockchain

• Highly distributed application environment
• Loose federation or purely voluntary participation (opt in/opt out)
• High transaction frequency
• A true need to increase security at all levels (i.e., trust model

enhancement)

• High need for fluidity and mobility (or at least one side of the

dynamic)

• A true need for a transactions or bilateral information + confirmation
• Anonymity or brokered (permissioned) identity management is

required

A Poor Use Case for Blockchain

• An application that is not distributed
• A very closed network of participants (proprietary)
• Low quantity of transactions
• High trust already exists (no deep need to enforcement)
• Static actors and low need for fluidity or mobility
• Pure one way transfer of information or data
• Identity is not a big driver in the dynamics of the application

Investors Business Daily – Sat. Edition – May 13, 2017

From IBD, May 13, 2017

• Wireless carriers in a transition now
• 4G has peaked…
• They’re positioning for Next Generation, i.e., 5G
• Will usher in a new bevy of services, enhancements upgrades, etc.
• IoT, Machine-to-Machine, expected to play a big part
• This represents multi-billion dollar mega evolution
• Will take years…

US Federal Spend – to date….

How Far Behind are we?

• General acknowledgement that L.E. is a

catch-up game;

• There really are crimes being committed by

criminals using blockchain-based netwks

• “Indeed, the Department of Justice and other federal law

enforcement agencies have a long history of adapting and evolving … law enforcement has had to evolve as new technology designed for legitimate purposes is used to facilitate criminal activity.”

• Jason Weinstein, Steptoe and Johnson, Attorneys at Law, W.D.C.

DLT, Cryptocurrencies, blockchain Law Enforcement

LAW ENFORCEMENT

• Cryptocurrencies are used by criminals to commit crimes or hold data

hostage … and want to be paid in cryptocurrency

• 75% of cases bitcoin is the currency of choice
• During 2016, DHS funded the dev. of a bitcoin analysis tool specifically

aimed at detecting and mitigating ransomware (see next slide)

• Internet Crime Complaint Center (IC3) cataloging $275M in losses

during 2015 (of these kind)

• Combination of blockchain and “old school” investigation protocols

FBI… continued

• Collaboration between and among other federal agencies – Treasury,

state police, secret service, etc.

• Private sector collaboration as well
• Battaglia said "the fact that everything is recorded in a public ledger

that’s permanent and not modifiable is very good from an evidence collection perspective".

• Speaking from the audience at the event, Kramer said that the FBI

recognizes the old days of getting "access to content" through wiretaps are largely over.

L.E. agencies getting smarter

Law Enforcement Tools for Investigations

• Chainalysis – New York, software dev. company…
• BitCluster – determines if transactions are from the same source
• Elliptic (Partnering with Internet Watch Foundation) to fight child

pornography … both are based in London.

• These and others are helping to…
• Legitimize the use of cryptocurrencies
• Use Collaboration as a very positive approach
• See www.bitcoin.com

• Danish law enforcement have arrested drug traffickers after an

investigation that included surveilling the blockchain, according to the regional publication Berlingske. The Danish police’s cyber crime unit NC3 claim they have made arrests based on criminal activity tracked via bitcoin transactions.

HOMELAND SECURITY

DHS Writing Software to Analyze Code

• DHS S&T /HSARPA  paid Sandia National Lab to write application
• Software tool for analyzing & investigating Bitcoin transactions
• Combines multiple investigative tools and “good ol’ fashioned

detective work”

• May be duplicative to COTS products --
• Chainalysis
• Skry
• Elliptic (based in London)

DHS S&T Program for Innovation

• The contract is part of DHS’ Silicon Valley Innovation Program (SVIP)

Other Transaction Solicitation (OTS), which aims to bring small, innovative companies that haven’t contracted with the federal government into the government contracting space.

• Launched in 2015
• Intended to familiarize firms w/DHS Mission and points of focus
• Leverages commercial investments (additively)
• FOCUS: IT, finance, energy, health, first responders

SVIP Continued

• The SVIP is expanding DHS’s reach to find new technologies that

strengthen national security with the goal of reshaping how government, entrepreneurs and industry work together to find cutting-edge solutions.

• DHS is reaching out to Silicon Valley and all of the innovation

communities across the nation to harness the commercial R&D ecosystem for government applications, co-invest in ideas and accelerate transition-to-market.

Call To Action for GBA Members:

DHS Follow Up

Contracting Office Address: Office of the Chief Procurement Officer Washington, District of Columbia 20528 Place of Performance: See OTS Washington , District of Columbia 20005 Primary Point of Contact.: DHS-Silicon-Valley DHS-Silicon-Valley@hq.dhs.gov Secondary Point of Contact: Aaron H. Ford, Procuring Contracting Officer Aaron.Ford@hq.dhs.gov Phone: 202-254-6302

• Testing for Camera usage at ports of entry, including borders and

airports

• Goal: detect & stop intruders who may try to manipulate the data

being collected

Former CIA Technologist, OPINION

• Critics of Silicon Valley from the national-security

community charge that technology is enabling terrorists to operate undetected.

• This same technological knowhow, however, could help the

intelligence community thwart those plotting against us and our allies.

• Silicon Valley has become renowned for innovation, but it could one

day become a byword for something even more important: keeping America and the world safe.

Yaya J. Fanusie is director of analysis for the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance and co-founder of the mobile startup ICmed, LLC. Prior to this, Yaya spent seven years as both an economic and counterterrorism analyst in the Central Intelligence Agency. Yaya J. Fanusie

DoD FY 17 Budget Submission (2/16)

• Exhibit R-2, RDT&E Budget Item Justification,
• Published: Feb. 2016 (vol 3, page 212)
• PEN 0603122D8Z / Combating Terrorism Technology Support:
• “This effort will develop statistical models using near real time

Blockchain data to determine the probability that a Bitcoin transaction is associated with illicit activities.”

• “Phone and walk-in based reporting fail to incorporate the potential to

dramatically increase the volume, information security, and quality of reporting possible through crowdsourcing applications, particularly when combined with the micro-payment processing breakthrough afforded by Blockchain technology.”

DEFENSE

NATO Comm. And Infor. Agency

NATO 2016 Cyber Innovation

https://www.ncia.nato.int/NewsRoom/Pages/160425_Innovation.aspx

Blockchain as part of an integrated solution is much more interesting to military organizations!

Defense Advanced Research Projects Agency (DARPA)

• September 2016 - awarded a $1.8 million contract to a computer

security firm called Galois

• …to formally verify—a sort of computer-code audit, using

mathematics—a particular type of blockchain tech supplied by a company called Guardtime.

• As with much military spending, this could be a catalyst for the

federal agencies, and for commercial markets as well

• Perspective: 1st QTR spending in Commercial markets (2016) =

$134M

• All of 2016 spending in 2016: <$3M

Countering Counterfeit Parts?

• DLA / DHS / ITC … care about counterfeit parts and supply chains
• In one infamous case, a few US military disasters involving $2.00

counterfeit parts led the U.S. Defense Logistics Agency (DLA) to discover that the U.S. defense supply chain is filled with counterfeit electronic parts.

• The outcome of the DLA’s finding, in 2012, was for the agency to

mandate that certain electronic parts would be marked with unique ink, that contains DNA signatures, to make it easy to spot the fakes.

• 1. Discussion – other use cases not mentioned here?
• 2. What is the lowest hanging fruit in Defense, L.E. and homeland

security?

• 3. What are you hearing from other countries?
• 4. What role should the intelligence community play in the US Federal

government adopting blockchain?

Discussion