Heinz Students Help Top Firms Untangle Blockchain
By Scott Barsotti
Two student teams take a deep dive into the potentially disruptive technology, with high impact results.
If technologies were debutantes, blockchain would be 2017’s belle of the ball.
Blockchain is one of the buzziest technology trends in recent memory. Everyone’s talking about it. Everyone claims to be pioneering it. Big firms are scrambling just to understand it, let alone utilize it. And some experts say it will, given time, completely reshape the Internet. It’s just a matter of “when,” not “if.”
Recently, two major multinational clients tapped Heinz College students from the Master of Information Systems Management (MISM) program to investigate use cases for blockchain, in order to better understand how this allegedly revolutionary technology might impact their industries and verticals of interest.
But first things first…what is it? What is this magical tech marvel that’s going to reinvent the virtual world, change everything we thought we knew, and buy everyone a pony?
Blockchain—the technology underlying the cryptocurrency Bitcoin—is a distributed digital ledger, a chronological and immutable record of transactions.
(Wait a minute…a ledger? Like in accounting? I’m supposed to get excited about some accounting thing?)
Well, yes. You are.
While “ledger” may not be a splashy term in and of itself, the concept of a distributed, incorruptible ledger is, to put it mildly, a pretty major idea. If blockchain technology achieved mainstream adoption, it could resolve one of the single most persistent problems dogging the web since the early days of dot com: the problem of trust.
Will blockchain really change the Internet?
Consider these frequently asked questions: how do you know what you can trust online? How do you know the information you’re getting is valid? How do you verify a fact? How do you know a bitcoin (or some other digital currency) someone transfers to you hasn’t already been spent? Who vouches for the integrity of the avatar-faced and pseudonymed eBay seller you’re about to buy that autographed Lebron James jersey from?
In the future, the blockchain can. And that future may be closer than you think.
The “distributed” part of a blockchain means that the record is spread out across many computers, called “nodes,” which means there is no one single point of vulnerability where a hacker can break in. In order for a new transaction to be added, that transaction has to verified by a majority of the nodes on the blockchain (a sensible, albeit somewhat complicated, consensus process called “mining”). Once the verified transaction has been added to a bundle of other similar transactions (a “block”) and that block has been added to the chain, it becomes virtually impossible (or at least, statistically, highly improbable) for the information to be changed. Records can be amended and added to, but not altered or deleted.
All this is to say that in its perfect form, blockchain is a resilient record that is tamper-proof. Its boldest advocates would describe it as “hacker-proof.”
That ideal form translates into an ever-growing repository of solid, verifiable truths in the vast wilderness of fraud and fake news. That outcome would be, in and of itself, an undeniable good. But blockchain has many other purported uses and benefits.
One of the more frequently touted is so-called “smart contracts,” self-executing transactions that remit and accept payments automatically when an agreement’s terms are fulfilled. Eventually, smart contracts could lead to businesses “staffed” by algorithms, entities with fully automated operations transacting with each other and consumers free of any intervention from human analysts.
Blockchain has already found heavy adoption in the financial services industry along those lines, promising in time to cut massive costs, to negate the need for intermediaries to establish trust between parties and regulate transactions, and to make markets more inclusive the world over, especially in less wealthy regions. In the eyes of some, blockchain will usher in a utopia of transparency, openness, and economic freedom.
Cool your jets, though. Blockchain has yet to mature to such an extent (or anywhere near it). There have been instances of breaches, such as the highly publicized Mt. Gox bitcoin theft and Ethereum “DAO” hack, which have laid bare exploitable kinks, not to mention a fair bit of hubris.
As a nascent technology, researchers are still laboring to understand blockchain’s possible uses and probable pitfalls. But the potential is there and is difficult to overstate, which is why companies all over the world have taken notice and want answers.
And that’s where Heinz College comes in.
Heinz students plot blockchain uses (and ferret out fraudsters) in key industries
For one project, a group of Heinz College students partnered with a global consulting firm to break down possible impacts, viability, and security implications of blockchain in seven key sectors: health care, finance, retail operations, energy, farming, transportation, and document management.
The students explored the current ecosystem of blockchain, mapping out use cases and failures, and creating a risk framework and SWOT analysis for each of the chosen sectors as well as a thorough breakdown of the impact on various stakeholders.
One thing that the students were surprised by in their research was the prevalence of companies that say they use blockchain simply for hype—whether that’s for marketing value or possibly even to deceive investors. The team’s dataset initially included 228 possible blockchain use cases, but when they went through these products one by one and examined source code and business models, they realized that not all of these cases had legitimately implemented blockchain.
After a painstaking data purge, they ended up with only 21 cases. That drop-off rate is a convincing illustration of blockchain’s marketing allure.
Through their analysis, the students were able to provide a realistic idea of risks and rewards, and exhaustively educate the client (and themselves) about the current state of the blockchain market.
In its perfect form, blockchain is a resilient record that is tamper-proof. Its boldest advocates would describe it as “hacker-proof."
“Though block chain adoption is still in its infancy, the students were able to demystify it for the client,” said Dr. Nicolas Christin, who was the project’s faculty advisor. “Their thoroughness and determination had a definite impact. By creating a repeatable methodology for risk assessment, they provided a valuable tool for the client moving forward.”
Thomson Reuters taps Heinz students on blockchain in IoT
For a separate project, global news and information firm Thomson Reuters gave the Heinz students an open-ended prompt: research applications for blockchain in the burgeoning Internet of Things (IoT).
The client asked the students to devise a solution to a huge IoT problem: how to identify, track, and verify sensors that are attached to IoT assets. Having an architecture that allowed that verification within a network would improve inventory management, maintenance, and, vitally, cybersecurity.
“At Thompson Reuters, we see tremendous crossover between the Internet of Things and the Identity of Things,” said Robert Schukai, Global Head of Design, Digital Identity at Thomson Reuters. “It isn’t enough to just have information from sensors and other devices; it is also important to know what those sensors are and that the sensor content itself is secure and accurate. Corrupted content can have tremendous impact on commodity prices and markets. Blockchain technology can potentially solve both of these challenges.”
The Heinz team came up with an ingenious way to define the problem in order to research it further: smart farming.
You may not think of farming as being a particularly high-tech industry, but connected devices have found widespread use in agriculture. U.S. farmers use Internet-enabled devices to monitor crops and conditions to improve yield. If those sensors could be identified and authenticated in an efficient, standardized way, it would not only have direct benefits to farmers assessing their network, it would also help USDA auditors, who could use the data collected by these sensors to ensure food safety during packing, handling, and storing.
The students used a Raspberry Pi mini-computer and Microsoft Azure alongside the blockchain platform Ethereum to create a prototype system that securely managed the identity of IoT sensors on a fictional farm. True to the promise of blockchain, the information stored was retrievable, verifiable, and immutable.
Not only that, but the students also put forth a white paper based on this project, making the case that IoT devices managed on a blockchain could create an additional revenue stream for farmers and other stakeholders by monetizing the data collected by their devices. Since the data would be stored on a blockchain, a third party purchasing that data could be confident it had not been tampered with.
This is the second blockchain-related Capstone project Heinz College students have completed with Thomson Reuters.
“We are thrilled with the project results and are continually impressed at the caliber of the work, the passion of the students, and the excitement that comes with working on cutting edge technology,” said Schukai.
Ready for the future, whatever it holds
Heinz College’s corporate partners know they can count on our students to take on big problems and new trends without being intimidated. Blockchain is so new that conventional wisdom around it is still forming, but the students on both of these projects parachuted into the blockchain jungle with clear eyes and curiosity, drawing their maps as they went.
That’s a big part of the Heinz College experience: challenging students to confront the newest technologies and equipping them to innovate on the leading edge. Show them the latest in tech, and they will not simply show you what it does. They’ll tell you what it means and why it matters.
The first Capstone Project cited, titled “Exploring Privacy and Security Risks in Blockchain Ecosystem,” was completed by Melissa Burns, Chad Davis, Yupin Huang, Hyun Soo Park, and Yadi Yang.
The second Capstone Project, titled "Smart Farming Using IoT & Blockchain," was completed by Richa Bhuria, Abhishek Singhal, Pushkar Waghdhare, and Owen Wagoner.