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DHS Official Tells Congress Blockchain Uses Are 'Almost Limitless'

“I think the applications are almost limitless.”

So said Douglas Maughan – who serves as the Science and Technology Directorate’s cybersecurity division director, a group within the Department of Homeland Security – before two Congressional subcommittees on Tuesday. Maughan’s remarks came during a wider discussion on the application of blockchain to supply chains, joining a panel of witnesses that included Maersk head of global trade digitization Michael White, UPS vice president of global customs brokerage staff Chris Rubio and Nuby Law IPR counsel Robert Chiaviello.

Announced last week, the “Leveraging Blockchain Technology to Improve Supply Chain Management and Combat Counterfeit Goods” hearing is the second such event hosted by the  House Science, Space and Technology Committee’s Oversight and Research and Technology subcommittees this year.

As expected, the session was largely educational in nature. But even still, as articulated by Maughn, such discussions can have a significant impact on the work being done by U.S. agencies on the blockchain front.

According to Maughn, the Science and Technology Directorate “must aggressively work with its research, development, test and evaluation partners throughout government and industry so Homeland Security applications of blockchain and distributed ledger technology are effective and trusted.”

Indeed, in his “limitless” remark, Maughan suggested that the scale of work was spread throughout the U.S. government.

“I think the applications are almost limitless and it’s up to the departments or agencies as to how to address that,” he told the subcommittees, later noting that not every potential use case requires a blockchain.

‘There must be a better way’

White, appearing on behalf of shipping giant Maersk, framed the firm’s move toward applications of blockchain as a way to break up the iceberg-like state of shipping today.

He began by describing how the shipping industry works at present, noting in particular that “the industry operates much as it does or has since the introduction of shipping containers in the 1950s.”

Transactions are filed through fax machines and documents about shipments are sent by way of carrier mail – and can sometimes arrive too late, he said, adding:

“Container shipments can also be delayed because essential paperwork has not caught up with the goods they are carrying. Everyone agrees that there must be a better way but no single participant can effect change … in 2016 Maersk and IBM began a collaboration with the goal of digitizing supply chain.”

That collaboration utilized a blockchain to create an immutable, but efficient record, he said.

UPS’s Rubio expanded on this concept, noting that “by having the ability to track any product from the beginning of its journey through the supply chain, blockchain may provide a solution to unknown or unverified product origins.”

“In fact, we are already seeing this tech used to track origins of various products,” he went on to say.

When asked how exactly blockchain can help the shipping industry, White remarked that “blockchain is especially suitable for that because you can enable the parties which have a right to see and have access to information and see that information has not been tampered with or modified in any way, shape or form.”

“By posting information in real time to the supply chain data can be shared and that can streamline the flow of goods. The benefit to the consumer is they can receive their product sooner,” Rubio asserted.

What the members said

Though the session largely saw the witnesses sharing their views and input on blockchain, the hearing did present some opportunities for subcommittee members to offer a window into their thinking on the technology.

At the outset, Rep. Ralph Abraham – who chaired the hearing – positioned the event as one that would look at both private and public-sector use.

“We recognize [blockchain] technologies can benefit both the public and private sectors, and seek to understand just how,” he told attendees.

As might be expected, the subject of cryptocurrencies crept into the hearing, with one lawmaker suggesting that those present ought to look into “the technology beneath it.”

“If we can overlook the stigma of cryptocurrency and look at the technology beneath it I think we can see [useful applications],” Rep. Barry Loudermilk of Georgia remarked at one point.

Rep. Don Bayer of Virginia declared that, in his view, the U.S. ought to play a major role in advancing the tech more broadly.

“I believe America should take the lead in blockchain research,” he said.

Capitol Hill image via Shutterstock

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DC Blockchain Hearing Sees Call for Congressional Commission

Members of the U.S. House of Representatives got a crash course on blockchain today, with subcommittees of the Science, Space and Technology Committee meeting to hear testimony on the tech.

During the “Beyond Bitcoin: Emerging Applications for Blockchain Technologyhearing, the House Subcommittee on Research and Technology and the Subcommittee on Oversight asked a range of questions, primarily aimed at getting a sense of which use cases have attracted the most attention today – and could, in theory, wind up being used by the U.S. government itself.

Ultimately, the witnesses would recommend that Congress set up a legal framework which would encourage and, perhaps, even fund research into uses of the technology within the public sphere.

“I would encourage Congress to commission a blockchain advisory group,” Aaron Wright, an associate clinical professor at the Benjamin N. Cardozo School of Law and co-director of its Blockchain Project. 

He later elaborated:

“So the idea with the blockchain commission would be to provide a degree of uniformity and a unified approach to the numerous regulatory decisions. Some issues raised by the witnesses today – there’s privacy issue, identity issues, consumer protection, commodities laws, and there’s competing interpretations that have been issued already by federal agencies, so the thought would be to standardize that.”

Applications, not regulations

The hearing pointedly sought to avoid a topic that has been a hot one, both in and outside of Washington, D.C.: regulation. While it was a subject that came up through witness testimony, chair Ralph Abraham (R-LA) said he wanted to focus on what he described as a potentially “transformative” technology.

To that end, the hearing called for examples of how the technology can be used, both in the private sector and by the federal government.

Representative Barbara Comstock (R.-VA) started listing use cases by noting that her personal information was likely stolen or compromised by a data breach at the Office of Personnel Management. As a result, she said she was “pleased” to hear about efforts to create more secure identity management platforms that uses blockchain as a means to encrypt data.

One notable topic of exploration came through Chris Jaikaran, a cybersecurity analyst from the Congressional Research Office, who discussed the tech’s use for underpinning voting systems.

“The blockchain doesn’t record the vote, it records the person, the identity, the voting. The vote itself is stored on another secure system,” he explained.

Frank Yiannas, vice president of food safety, Walmart Inc., detailed his company’s work with blockchain to the subcommittee members, explaining how the retail giant is using the tech to track food shipments.

Yiannas spoke on the pilot projects the retail giant had concluded already, explaining that blockchain has already seen success in helping track food supply chains.

He explained:

“In 2017, Walmart and IBM decided to trial a blockchain to track mangos from source to store … at the end of the trial, we proved we could cut down the time to trace food from seven days to 2.2 seconds. That’s food traceability at the speed of thought.”

Security concerns

While committee members seemed enthused on the idea of private-sector blockchains helping businesses solve problems, they shared concerns about using similar platforms to share government-related information. Representatives Clay Higgins (R-LA) and Ed Perlmutter (D-CO) in particular asked for clarification on how distributed ledgers would be secured from potential attackers.

Charles Romine, director of the Information Technology Lab at the National Institute of Standards and Technology (NIST), noted that 51 percent attacks and compromised computers could both disrupt a blockchain, but that these types of attacks would be less dangerous for large – and therefore powerful – networks.

One particular area that was honed in on is quantum computing, which some have warned could undermine the security of blockchain systems.

These concerns are being considered but are at least 15 to 30 years away from becoming a reality, Romine explained.

“If there is a concerted effort to develop quantum computing, I believe we have a number of years before it reaches maturity – what we refer to as being cryptographically relevant.”

Looking ahead

As with any hearing before Congress, the natural question becomes: what comes next?

Prior to the hearing, aides to the committee downplayed the prospects of immediate action, though they floated the idea that the testimony on Wednesday could form the basis of work toward some kind of legislation around blockchain.

IBM’s Jerry Cuomo prepared a list of potential actions Congress could take in order to provide more support for blockchain research. First and foremost, he recommended that the government should encourage projects which can directly impact the U.S.

Cuomo argued in favor of a “thoughtful” approach to legislation.

“Perhaps most importantly, [Congress should] recognize the difference between blockchain’s use in new forms of currency from broader uses of blockchain when considering regulatory policy. Carefully evaluate policies established regarding cryptocurrencies to ensure that there will not be unintended consequences that stymie the innovation and development surrounding blockchain.”

Ultimately, it’s tough to say whether Congress will move on such legislation anytime soon – especially considering the current political climate in the U.S. today – but the process likely moved one step closer through today’s testimony.

Panel image via YouTube

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