Blockchain based secure storage

Abstract

Blockchain serves as ideal infrastructure for storing private data in encrypted form utilizing existing blockchain PKI infrastructure for encryption, signing and granting access.

Blockchain can be viewed as highly replicated immutable distributed data storage. Every user on a Blockchain network has public key, which uniquely identifies the user and a private key (known only by the user). One of the challenges with Cryptocurrencies is inabilities of many nontechnical users to manage their own private keys. Many have lost their keys and lost control to their wallets and accounts. Others had their private keys stolen due to various reasons.

Many prefer to have third parties like exchanges to manage their private keys for them — effectively giving away control to a third party. The proposed solution in this paper seeks to address these issues. The distributed secure data storage application will allow users to record, retrieve and share access to their private data directly on Blockchain in a secure and controlled manner.

Background

Blockchain technology was first introduced in 2008 with a Bitcoin whitepaper released under a nickname Satoshi Nakomoto. It took years for technology to develop and we are observing a real explosive grows of Blockchain technology.

However behind rising prices of many cryptocurrencies and speculative interests many are losing sight of something far more important: a technological revolution Blockchain brings to many sectors of our lives.

Ethereum became a first smart platform, which builds on original Bitcoin Blockchain idea and adds ability to write distributed programs called smart contracts using language called Solidity.

And yet the only practical usage of the smart contracts that we see became distribution contracts for the new ICOs and token distribution when users exchange their Ethereum for new tokens created.

Ethereum smart contract platform is burdened by limited computational ability and gas cost for every operation done on blockchain including read only operations, making it impractical for wider adoption.

On Exchanges and regulatory pressure

Another phenomenon that we observe is flight of masses into Exchanges as not only means of buying cryptocurrency but also as a way to manage their own wallets and storage of cryptocurrency.

This goes against the spirit and intention of Blockchain technology to provide decentralized access and allow people to manage their own wallets. At the same time Exchanges like Coinbase effectively inserted themselves between Blockchain and end users becoming a de-facto crypto bank and providing a familiar banking interface to the end users without burden of keeping their own private key secured and providing recovery mechanism for access as well as easy to use mobile access.

This gave regulators an ability to apply pressure on companies like Coinbase and to impose limits and restrictions as well as requiring it to share data on it’s users accounts.

What I think is keeping regular non-technical users from managing their own wallets is a fear of loosing private key and perceived inability to manage it in a secure way.

For many even a two-phase login procedure used by Coinbase requiring secure token is challenging enough for many users. Hence providing a way to secure private key and be able to recover it if lost without involvement of any central party while providing an easy to use interface could become a catalyst for wider adoption of private wallets and move away from centralized Exchanges.

Dec 2017, Eugene Luzgin, ses.network