Advisory Note

Blockchains and Cybersecurity: Augmenting Trust with Algorithms

From trusted third parties to algorithmic consensus: new cybersecurity opportunities and challenges with blockchains. Blockchains can provide distributed and decentralised improvements to the merely distributed critical systems the internet depends on today, but we cannot yet completely replace trusted third parties and human judgement with algorithms.

Ivan Niccolai

1 Management Summary

Cybersecurity today relies overwhelmingly on centralised systems and trusted third parties. These systems are essential for answering the fundamental questions “can I trust you?” (the trust dilemma) and “are you who you say you are?” (The identity dilemma). Yet these systems by their very design have inherent vulnerabilities. Centralised, trusted parties have their place in technology and society, in the foreseeable future it will simply not be possible to completely replace centralised trust with algorithms.

Blockchains and decentralised systems can offer some significant benefits to these traditional systems by adding mathematical proof to implicit trust. What will be more likely is a proliferation of hybrid systems which utilise a combination of centralised and decentralised technologies.

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