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1 | Open Data Institute 2016 | Applying blockchain technology in global data infrastructure

Applying
blockchain
technology
in global data
infrastructure

Open Data InstituteODI-TR-2016-001

Page 2

Table of contents

Executive summary 2

Introduction 3

The foundations of blockchain technology 4

The technology landscape 8

Scaling and linking blockchains 13

Privacy and security 16

Practical experimentation 20

Conclusions 22

About the ODI 23

Bibliography 24

Authors: James Smith, Jeni Tennison,
Peter Wells, Jamie Fawcett, Stuart Harrison

Editor: Anna Scott

Design: Christie Brewster

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12 | Open Data Institute 2016 | Applying blockchain technology in global data infrastructure

Digital content distribution

The following services aim to provide a means to distribute digital content equitably – whether
for IP protection, or fair remuneration – in a way that does not rely on centralised platforms.

� ALEXANDRIA: a standard allowing users to distribute digital content
(blocktech.com)

� UjoMusic: a service for distributing creative digital products, such as music,
focused on generating greater transparency, fairness and profitability
(ujomusic.com)

� Blockai: a digital asset distribution service (blockai.com)

False promises

While there are promising applications as identified above, a great many of the ideas out
there are ‘vapourware’, with no viable implementation or model. For instance, development on
Honduras’ land registry, which is being turned into a distributed ledger by Factom, has stalled
with no working system (Rizzo, 2015). This is particularly important, as this example is used
repeatedly to show that blockchains can be useful in traditional government applications, but
has not yet shown any results.

There are also many instances of old ideas being brought back to life with an application of new
technology sheen. For instance, tracking benefit payments and how they are spent is a policy
idea that has been proposed and rejected in the past, but is now reappearing with blockchains.
Many such projects failed for good reasons in the past, and the addition of blockchains will not
change those reasons, which is more often social or cultural than technological.

Section summary
� The distributed ledger technology stack is still emerging, with

unclear boundaries between platforms and applications
� Many blockchain applications are technology-centric rather than

focused on user needs
� While there are good examples of blockchains being used to

build useful services, they are currently in the minority
� Interested parties must be alert to blockchain hype and myths

when surveying the landscape, and should focus on those
applications solving real problems

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13 | Open Data Institute 2016 | Applying blockchain technology in global data infrastructure

Scaling and linking blockchains
Blockchains are emerging from their origins in cryptocurrencies and being explored as a
mechanism for storing data of other kinds. We are very early in our understanding of when
and how best to use blockchain technology. We need to anticipate and plan for what happens
when blockchains scale from low levels of use to potential ubiquity for other applications, like
recording marriages (Alexander, 2014), registering land ownership (van Wirdum, 2015) and
maintaining supply-chain provenance (Provenance, 2015).

Blockchains are maintained by a distributed network of nodes: computers that store the
blockchains and may add data to them. There are drivers for having a few blockchains that are
each maintained by a large number of nodes and for having many blockchains that are each
maintained by a small number of nodes. It is likely it will end up somewhere in the middle. The
suitable number of blockchains needed to support the applications that use them will change
over time. We have to ensure that it is possible to adjust: to split blockchains or to merge
blockchains as required, and to migrate data between them.

What are the drivers for having fewer blockchains?

Blockchains are attractive as a data store because their distributed nature makes them robust
and tamper-proof. Robustness ensures that the data is always available. A blockchain being
tamper-proof guarantees data integrity; even if some nodes are compromised, the other nodes
will not accept changes they make to the blockchain.

A blockchain that is maintained by a single node could be struck by a hardware failure, or
could rewind and rewrite the blockchain it is maintaining without detection.

Blockchains that are only maintained by small numbers of nodes can get into situations where
the majority of the network is owned by a single organisation or cartel. This happened with
the GHash Bitcoin mining pool in 2014 (Hern, 2014), and was the reason behind Onename’s
recent migration from Namecoin to the Bitcoin blockchain (Onename, 2015). When more than
half a blockchain is owned by a single organisation, it is possible that they can collaborate to
alter the content of the blockchain or to accept invalid transactions.

The fact that small networks of nodes undermine the utility of a blockchain is a driver towards
having a few, large-scale blockchains maintained by many nodes.

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24 | Open Data Institute 2016 | Applying blockchain technology in global data infrastructure

Bibliography
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Borah, P. (2015). DAO Wars. [Online] Available at: https://github.com/consensys/dao-wars [Accessed 2016-05-23].

Buterin, V. (2016). Privacy on the Blockchain. [Online] Available at: https://blog.ethereum.org/2016/01/15/privacy-on-the-
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Hern, A. (2014). Bitcoin currency could have been destroyed by ‘51%’ attack. The Guardian [Online] Available at: https://
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Resnikoff, P. (2015). I’m Imogen Heap. And This Is Why I’m Releasing My Music on Blockchain. [Online] Available at:
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