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How are Blockchain Technology --A Fintech Breakthrough-- and Security Technology Making Transactions Safe?

Blockchain, Platform Technology that Supports Safe Transactions

Have you ever heard “Fintech?” Fintech is a word formed from “Financial Technology” and means innovative and disruptive new financial services created by integrating finance with technology in various ways. The first step of Fintech is that “your smartphone can make a deposit into a bank account or make a payment for online shopping or shopping at stores.”

Blockchain has received much attention within Fintech. Blockchain is a fundamental technology of the Bitcoin (a cryptocurrency), which provides distributed ledger and records every transactions. A prominent characteristic of blockchain is that it shares information without any specified central authority by multiple computers participating in a network to mutually verify data and keep their copies of records at the same time, which makes it impossible to alter data practically and also shows high resistance against system failures and cyberattacks.

When a transaction is issued on blockchain, each user needs his digital key. Therefore there is a risk if a user loses his digital key within his device, he is unable to make a payment or if his digital key gets stolen, the money may be spent by someone else. In addition, as information recorded on blockchain is shared among all computers participating in the blockchain, it is difficult to control the information confidentiality. For example, in order to apply blockchain to document management that assures originality of contracts, the way to limit the number of people who can browse the contents must be considered.

Development of Blockchain Security Enhancement Technologies such as Restricting Transactions and Encrypting Information

Fujitsu Laboratories Ltd. and FLA (Fujitsu Laboratories of America, Inc.) have developed two blockchain-based security technologies, which enable to handle confidential data safely among multiple organizations.

The first technology is a transaction restriction that realizes virtual currency used only for a specific purpose by means of establishing a transaction policy in advance. The technology verifies whether transaction conform to the pre-established policy by multiple computers participating in the blockchain and does not record to the blockchain if it violates the policy. As the technology does not allow company expenses to be used for something other than the authorized purpose and minimizes misuse by others in case a user loses his digital key, it is possible to limit damage.

Virtual currency used only for specific shops (For example, it can be used at a supermarket, but not at a casino.)

The other technology is a document encryption technology on blockchain, which not only guarantees the originality of the document but also encrypts part of the content by storing documents such as contracts on blockchains. Multiple users have partial information of one digital key, and when certain numbers of partial information of the key are present, the digital key is restored to decode the document. For example, confidential parts of contracts and written wills can be viewed only when concerned people give consent. As a result, it adds the functionality of confidentiality control of information to blockchain technology.

Example of a partially encrypted contract on a blockchain

Logistics, Supply chain...Toward Applying in Various Fields

These technologies prevent the misuse and abuse of digital keys, which were issues of blockchain, and ensure secure blockchain operations. Further applications include enabling managers to recover lost digital key or achieving workflow such as requesting an approval from a number of managers just like collective decisions. It is hoped that in the future, blockchains can be applied not only to finance but also to wider areas such as logistics, supply chain and managing official documents.

Going forward, Fujitsu Laboratories Ltd. and FLA will continue verifying these technologies by implementing them on Fujitsu's cloud platform and moving ahead to put them into practical use.

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