HiPEAC Vision
Distributed Ledger Technologies (DLT) and InterPlanetary File System (IPFS) are key enablers to achieve an overall decentralized, secured platform over the Internet, like the Next computing Paradigm (NCP).
DLT and IPFS Technologies are Paving the Way for the Next Paradigm in Computing
by Emmanuel Bertin
Key insights
Distributed Ledger Technologies (DLT) and InterPlanetary File System (IPFS) are key enablers to achieve an overall decentralized, secured platform over the Internet.
Mass adoption of this new computing paradigm will require thorough transformation of European laws and policies, including on the legal value of smart contracts.
Many challenges are still ahead to pave the road to this new computing paradigm.
Key recommendations
DLT and IPFS allow combining security and controlled openness. EU companies should consider these technologies as a driver to rethink their business models, relying on mission-oriented consortiums rather than on mere competition, and moving from “paper-based partnerships” (e.g., through contracts and agreements) to “code-base partnership” (e.g., using smart-contracts).
Similarly, EU public authorities (including regulation bodies) should consider moving from “paper-based policies” to “code-base policies” (e.g., with smart-contracts) relying on DLT and IPFS. They may also consider becoming part of DLT consortiums, in order to monitor the dynamic enforcement of policies.
Investigate and monitor possible ways, especially security issues, to circumvent European policies using Blockchain and IPFS technologies, whether by European or foreign actors.
Key components for a decentralized internet paradigm
Distributed Ledger Technologies (DLT) and InterPlanetary File System (IPFS) are not just technologies; they are the building blocks of a new computing paradigm that promises to reshape our digital landscape. These technologies are indeed at the forefront of building a distributed computer over the entire internet. This concept, often referred to as the "world computer" envisions a future where decentralized applications (dApps) run on a peer-to-peer network, leveraging the collective processing power and storage capacity of millions of devices connected to the internet [1].
DLT refers to a digital system for recording the transaction of assets in which the transactions and their details are recorded in a decentralized manner, each peer holding a synchronized copy of every transaction. It enables the creation of a distributed ledger that records data across a network of nodes, ensuring that no single point of failure can compromise the integrity of the data. Unlike traditional databases, DLT has no central data store or administration functionality. Blockchain, which underpins cryptocurrencies like Bitcoin, is one of the most well-known types of DLT.
IPFS complements blockchain by addressing one of its limitations: storage. While blockchain is excellent for recording transactions and small amounts of data, it is not efficient for storing large files. IPFS is a protocol and network designed to create a content-addressable (meaning files are retrieved based on their content address rather than their location), peer-to-peer method of storing and sharing hypermedia in a distributed file system. IPFS enables files to be stored across multiple nodes globally, which can reduce redundancy, increase efficiency, and improve the web's permanence.
The "World Computer" Concept: The idea of a "world computer" stems from the vision of a decentralized computing infrastructure. In this paradigm, dApps (decentralized applications) operate on a global peer-to-peer network, utilizing the combined processing power and storage of millions of devices. This can potentially offer benefits such as increased resilience against failures, censorship resistance, and a new model for digital interactions and transactions without the need for traditional centralized intermediaries. This vision could be a way to achieve the Next Computer Paradigm (NCP). While the NCP is focused on a global nest of services, systems and devices, this idea of "world computer” relying on DLT and IPFS can be seen as one of the enablers to implement the NCP vision (e.g., for achieving global and decentralized computing and storage, as well as applications built on top of them).
Together, DLT and IPFS are foundational to enable this vision by respectively providing mechanisms for secure, decentralized transaction recording, and file storage and distribution. However, governance issues have to be considered.
Governance in a Distributed World
In a distributed network, governance refers to the mechanisms through which decisions are made, changes are implemented, and conflicts are resolved. The challenges include ensuring that the system is fair, transparent, and efficient while preventing any single entity from gaining too much control.
Various models have emerged to address these challenges:
On-chain governance: Decisions are made through a formalized process coded into the blockchain itself, often involving token-based voting[1]. When disagreements arise, the blockchain may undergo a "fork," where the ledger diverges into two separate chains, each reflecting different decisions or rule sets.
Off-chain governance: Decisions are made through discussions and agreements among the community in charge of the network, and then implemented by the network's validators or developers.
These different governance models can be illustrated with some famous public blockchain projects, featuring different governance structures:
Bitcoin [2]: Utilizes an informal off-chain governance model where the community, developers, and miners discuss and implement changes through consensus, with the possibility of forks.
Ethereum [3]: Has a mix of on-chain and off-chain governance, with formal improvement proposals and community discussions leading to upgrades like Ethereum 2.0.
Tezos [4]: Features an on-chain governance model where token holders vote on proposals for protocol upgrades that are then automatically implemented without forking.
In addition, DLT may also be deployed and operated in a private way by a consortium of actors (typically a set of companies). Those cases mainly rely on a pure off-chain governance, to let the involved companies shape the consortium. However, the detailed governance models are not publicly documented and remain specific to each consortium.
We believe here there is an opportunity for EU public authorities and companies to work together on this topic of governance. On-chain governance appears clearly as a very promising scenario, enabling to automate many back-office tasks. However, its limitations and its lawful status should be addressed in the EU scope. The possibility to include in Blockchain consortiums a national or EU public authority, which would be in charge to monitor the governance model, and enforce it in litigation cases, should also be considered.
Sovereignty and Data Ownership
DLT and IPFS can empower users with sovereignty over their data by enabling them to control where and how their data is stored and shared.
DLT: Provides a secure and immutable ledger where users can prove ownership of data or assets without the need for a central authority. Smart-contracts can enforce the rules of data access and usage.
IPFS: Allows users to store data on a distributed network where they control who has access to it. Data is addressed by content rather than location, making it resilient to censorship and server failure. Decentralization enables a high scalability and a low latency for reading accesses (writing accesses are immediate, but there is of course a synchronization delay, as in any peer-to-peer system).
The implications for privacy and data security include:
Enhanced Privacy: Users can control their personal data and share it selectively, potentially reducing the risk of mass data collection by centralized entities.
Improved Data Security: A distributed network reduces the risk of centralized data breaches. Data is spread across multiple nodes, making it harder to compromise.
However, these technologies also introduce new challenges, such as the need for robust encryption and secure key management, as users are responsible for their own data security.
Theoretical and Operational Challenges
More precisely, the challenges associated with enhanced privacy and improved data security in a distributed network [6] like those enabled by DLT and IPFS include the following ones.
Secure Key Management: Users are responsible for their own private keys, which are required to access their data and assets. Losing a private key can result in the permanent loss of access to data or digital assets. Storing keys securely while making them accessible and recoverable is a complex issue.
Data Availability and Persistence: In a distributed system, data is replicated among multiple nodes to ensure it remains accessible even if some nodes go offline. Ensuring that data effectively persists on the network over time remains a long-term challenge, especially on DLT that are not massively used.
Scalability: As the number of transactions and users grows, maintaining performance and efficiency is a challenge. Blockchain networks, in particular, can suffer from slow transaction times and higher fees during periods of congestion. For example, the large-scale public Bitcoin network can proceed about 7 transactions per second, while Visa processes around 1,700 transactions per second on average, claiming to be able to support 24,000. However, this issue can be partly circumvented by relying on layer 2 DLT, that are built as an overlay on top of an existing Blockchain network.
Regulatory Compliance: Data sovereignty laws and regulations, such as GDPR, may impose requirements on data storage and transfer that are difficult to reconcile with decentralized networks. Ensuring compliance while maintaining the decentralized ethos poses a significant challenge. In particular, the EU “right to be forgotten” (RTBF) is not easily compatible with the data immutability property of DLT (meaning that once written in the chain, a data can never be deleted).
User Experience: The complexity of managing one's own data and security can be a barrier to adoption for less technical users. Developing user-friendly interfaces and processes that do not compromise security is crucial for wider acceptance. Key management being here clearly an issue to achieve a great ease of use while maintaining a high security level.
Smart-Contract Security: Smart-contracts are immutable once deployed to a blockchain, and bugs or vulnerabilities can lead to loss of funds or data breaches. Ensuring the security of smart-contracts requires rigorous testing and auditing before deployment.
Network Security: Decentralized networks must be resilient to various attacks, such as 51% attacks [7] (meaning that more than 51% of the nodes are malicious), Sybil attacks [8] (meaning that a single malicious entity controls directly or indirectly a large number of nodes), and routing attacks [9] (meaning attacks at the IP routing level in order to block communication between nodes and split the network). While these attacks are well documented, and addressed in current DLT and IPFS networks, maintaining a secure and robust network requires constant vigilance and adaptation to new threats.
Addressing these challenges is an ongoing process that involves both technological innovation and changes in user behavior. As these technologies mature, solutions to these challenges are being developed, but the responsibility for data security and privacy increasingly falls on the individual user. For example, as DLT are massively relying on asymmetric cryptography (e.g., any operation must be signed by user’s private key), the loss of his or her private key by the user of a public blockchain implies the loss of any ability to act on the chain (including retrieving funds); systems that could help to circumvent the problem are often hardly compatible with the decentralization principles of DLT).
Early Use Cases
DLT and IPFS are being utilized across various industries, each with specific applications and business benefits.
In Finance, Blockchain is used for cryptocurrencies, cross-border payments, and smart-contracts that automate complex financial transactions [10]. It reduces transaction times and costs while increasing transparency. In Supply Chain, Blockchain provides traceability and transparency from production to delivery, helping to verify the authenticity of products and streamline logistics [11]. For Healthcare, IPFS can store large medical files in a decentralized manner [12]. Concerning Real Estate, Blockchain may simplifies property transactions by reducing the need for intermediaries, automating land registry updates, and ensuring the immutability of records [13]. For Media and Entertainment, IPFS helps content creators distribute their work directly to consumers, potentially reducing hosting costs and improving content addressability [14].
However, these use cases are not so easily converted into business. For example, Maersk and IBM's TradeLens platform uses blockchain to streamline maritime shipping was stopped in November 2022, nearly five years after the creation of a dedicated joint-venture to create and deply this platform. The reason invoked for this closure was not technical, but about the lack of involvement of other business partners, leading to a poor commercial viability: “TradeLens was founded on the bold vision to make a leap in global supply chain digitization as an open and neutral industry platform. Unfortunately, while we successfully developed a viable platform, the need for full global industry collaboration has not been achieved. As a result, TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations as an independent business.” [15]
Conclusion
The combination of blockchain and IPFS creates a synergistic effect that can revolutionize how we think about computing resources. Instead of relying on centralized servers and data centers, a distributed computer over the internet would harness the unused computational resources and storage space of participating devices, creating a more resilient and efficient system.
This distributed approach also has profound implications for governance and sovereignty. In a world where data and applications are not tied to any single entity, users regain control over their digital assets. This shift challenges traditional models of operation and requires new frameworks for governance that can accommodate the decentralized nature of these technologies.
However, the path to realizing this vision is not without obstacles. Scalability, interoperability, and user adoption remain significant challenges. Blockchain networks, in particular, must find ways to handle an increasing number of transactions without compromising speed or security. Similarly, IPFS must ensure that data retrieval remains fast and reliable as the network grows.
In addition, mass adoption of this new computing paradigm will require thorough transformation of European laws and policies, including on the legal value of smart-contracts, and also to detail how existing norms can be applied, including the “right to be forgotten”. Possible ways to circumvent European policies using these technologies, whether by European or foreign actors, should however be carefully investigated and monitored, especially concerning security issues.
Concerning Public authorities (including regulation bodies, in particular for sectorial regulation), we recommend they progressively consider moving from “paper-based policies” to “code-base policies”, by framing consortiums of business actors, relying on Blockchain and IPFS technologies. For example, Mobile Number Portability could be performed by smart-contracts with encrypted data stored on IPFS, with the underlying Blockchain being implemented as a consortium among Mobile Network Operators and regulatory bodies for each country, as proposed in [16].
More broadly, EU companies should consider Blockchain and IPFS as an opportunity to rethink their models, relying more on mission-oriented consortiums rather than on mere competition, as these technologies are now enabling to couple security, control, and (more or less) openness. Traceability, recycling or logistics are here typical examples.
AUTHOR
Emmanuel Bertin is Senior Expert at Orange, Paris, France, as well as associated Professor at Telcom Sud Paris, Palaiseau, France.
REFERENCES
[1]: Julien Hatin, Emmanuel Bertin, Baptiste Hemery, Nour El Madhoun. Welcome to the jungle: A Reference Model for Blockchain, DLT and Smart-Contracts. Tokenomics 2020 on Blockchain Economics, Security & Protocols (2nd International Conference), Oct 2020, Toulouse, France. https://hal.science/hal-03014631
[2]: What is Bitcoin governance? https://www.bitcoin.com/get-started/what-is-bitcoin-governance/
[3]: Introduction to Ethereum governance. https://ethereum.org/en/governance/
[4]: Governance and validation on Tezos. https://tezos.com/governance/
[5]: Hassan, Samer, and Primavera De Filippi. 2021. "Decentralized Autonomous Organization". Internet Policy Review 10 (2). DOI: 10.14763/2021.2.1556. https://policyreview.info/glossary/DAO
[6]: Huang, Huawei, Jianru Lin, Baichuan Zheng, Zibin Zheng, and Jing Bian. "When blockchain meets distributed file systems: An overview, challenges, and open issues." IEEE Access 8 (2020): 50574-50586. https://ieeexplore.ieee.org/document/9031420
[7]: Sayeed, Sarwar, and Hector Marco-Gisbert. "Assessing blockchain consensus and security mechanisms against the 51% attack." Applied sciences 9, no. 9 (2019): 1788.
[8]: Iqbal, Mubashar, and Raimundas Matulevičius. "Exploring sybil and double-spending risks in blockchain systems." IEEE Access 9 (2021): 76153-76177.
[9]: Chaganti, Rajasekhar, Rajendra V. Boppana, Vinayakumar Ravi, Kashif Munir, Mubarak Almutairi, Furqan Rustam, Ernesto Lee, and Imran Ashraf. "A comprehensive review of denial of service attacks in blockchain ecosystem and open challenges." IEEE Access 10 (2022): 96538-96555.
[10]: Patel, Ritesh, Milena Migliavacca, and Marco E. Oriani. "Blockchain in banking and finance: A bibliometric review." Research in International Business and Finance 62 (2022): 101718.
[11]: Raja Santhi, Abirami, and Padmakumar Muthuswamy. "Influence of blockchain technology in manufacturing supply chain and logistics." Logistics 6, no. 1 (2022): 15.
[12]: Jayabalan, Jayapriya, and N. Jeyanthi. "Scalable blockchain model using off-chain IPFS storage for healthcare data security and privacy." Journal of Parallel and Distributed Computing 164 (2022): 152-1
[13]: Garcia-Teruel, Rosa M. "Legal challenges and opportunities of blockchain technology in the real estate sector." Journal of Property, Planning and Environmental Law 12, no. 2 (2020): 129-145.
[14]: Dutra, Andre, Andranik Tumasjan, and Isabell M. Welpe. "Blockchain is changing how media and entertainment companies compete." MIT Sloan Management Review (2018).
[15]: Maersk and IBM to discontinue TradeLens, a blockchain-enabled global trade platform. https://www.maersk.com/news/articles/2022/11/29/maersk-and-ibm-to-discontinue-tradelens
[16]: Ghaffari, Fariba, Emmanuel Bertin, and Noel Crespi. "User Profile and Mobile Number Portability for Beyond 5G: Blockchain-based Solution." In 2023 26th Conference on Innovation in Clouds, Internet and Networks and Workshops (ICIN), pp. 187-194. IEEE, 2023.
Such on-chain governance is the ground for DAO (Distributed Autonomous Organizations) [5], where this token-based voting model is applied to the governance of a whole organization. However, this type of organization has not yet proven a widescale and sustainable viability. ↩︎