Blockchain – The Coming Global Paradigm Shift!

George Gilder, in his latest book, Life After Google: The Fall of the Big Data and the Rise of the Blockchain Economy, effectively argues that our current big data IT world (he uses Google as the metaphor and leading provider) is not here to stay because of inherent flaws, the most significant being cyber-insecurity and the associated loss of human privacy. George Gilder is an American writer, investor, 20-book author, and techno-utopian advocate. Despite it’s current hype, some may ask, what is blockchain?

“A blockchain, originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a merkle tree root hash).

By design, a blockchain is resistant to modification of the data. It is ‘an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way’.”

Wikipedia

Most people associate blockchain with the cryptocurrency Bitcoin which is a new form of electronic cash. Bitcoin is a decentralized digital currency designed to bypass central banks and Nation State fiat monies undergirding today’s global financial transactions. Unlike fiat currencies, Bitcoin transactions are verified by network nodes through cryptography, and recorded in a public distributed ledger called a blockchain. Bitcoin was invented by an unknown person or group of people using the name Satoshi Nakamoto and released as open-source software in 2009.

Although several cryptocurrencies have been started since Bitcoin first stood up, the real hype and interest surrounding blockchain is the possibility of truly distributed immutable ledgers that offer the possibility of transparent ledgers, for all business types, without the need for continuous verifiable auditing, and without the possibility of ledger fraud and related crime.

Gilder’s concern about big data and internet security leads him to predict that blockchain and immutable ledgers will become the technical foundation of a future he calls the “cryptocosm.”

“Google’s security foibles, its “aggregate and advertise” model, its avoidance of price signals, its vertical silos of customer data, and its visions of machine mind are unlikely to survive the root-and-branch revolution of distributed peer-to-peer technology, which I call the ‘cryptocosm’.”

Gilder, George. Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy (Kindle Locations 723-727).

While the free and/or low cost IT services we currently use on the internet have provided unprecedented access to information for anyone able to access it through computers and mobile devices, it hasn’t really been free when one considers the massive loss of personal privacy, intellectual property, and the growing effectiveness of cybercrime. In addition, as Gilder points out, free ultimately robs us of time, our ultimate immutable resource.

Even more interesting to me is his comparison of Marxism and the failed twentieth-century socialist governments that perpetrated the slaughter of over 100-million of their citizens in the name of rational centralized government planning. While Gilder acknowledges the brilliance of Silicon Valley leaders such as Google founders, Sergey Brin and Larry Page, he also argues that modern centralized big data systems are the neo-Marxism of our day.

“Marx was typical of intellectuals in imagining that his own epoch was the final stage of human history. William F. Buckley used to call it an immanentized eschaton, a belief the “last things” were taking place in one’s own time. The neo-Marxism of today’s Silicon Valley titans repeats the error of the old Marxists in its belief that today’s technology—not steam and electricity, but silicon microchips, artificial intelligence, machine learning, cloud computing, algorithmic biology, and robotics—is the definitive human achievement. The algorithmic eschaton renders obsolete not only human labor but the human mind as well.”

Gilder, George. Life After Google, Kindle Locations 224-229

Alternately Gilder argues, based upon Shannon’s information theory, that information is surprise and inventive human minds will always provide that surprise in a system of economics that rewards surprise. He also doesn’t fear the AI takeover of the human race by machines, as is predicted by Ray Kurzweil’s singularity or Elon Musk’s AI fears, because machines are, by definition, deterministic and will never achieve the non-determinism of human consciousness that provides our human ability to invent surprise. Inventing surprise or knowledge is Gilder’s definition of economy.

To bring this back to Naval and DoD practicalities, the near-term value of this discussion is that blockchain, as an enabler of immutable distributed ledgers, offers a fundamental transformation of today’s unsecured DoD IT architecture. Working with this emerging technology, provides DoD an opportunity to start building the security stepping stones needed to transform today’s cyber-insecurity into tomorrow’s National Security cryptocosm. To that end, consider the value of secure distributed ledgers for challenges such as: encryption key distribution; supply chain logistics; military medical records management; weapon and nuclear material tracking; human resource skills and assignment tracking; and, perhaps even situation awareness track management.

China’s First Aircraft Carrier, Liaoning Type 001A

One thing is certain! Without a fundamental improvement in IT cybersecurity across the DoD, the future of warfare is up for grabs with our near-peer competitors, and the solution will be more about proven results than Information Assurance process driven activities like Risk Management Framework.

Posted in Cybersecurity, DoD IT Acquisition, Global Perspectives, Leadership, Technology Evolution | 10 Comments