Page 69 - FIGI: Security Aspects of Distributed Ledger Technologies

135 Blockchain is designed to operate a single distributed ledger in a decentralized manner over a trustless peer-to-peer
network but kept reliable through the utilization of cryptographic proofs and a consensus mechanisms to reach global
agreement as to transactions to be entered into the ledger.
136 Coined by Vitalik Buterin, Ethereum Founder. NeonVest (2018) The Scalability Trilemma in Blockchain, https:// bit .ly/
2Y3dEpb
137 See Fischer, M; Lynch, N & Paterson, M (1985) Impossibility of Distributed Consensus with One Faulty Process, available
at http:// bit .ly/ 2Z1YT6q; Gilbert, S & Lynch, N (2002) Brewer’s Conjecture and the Feasibility of Consistent, available
at http:// bit .ly/ 2XVRMuF; NULS (2019) Why it is Impossible to Solve Blockchain Trilemma?, available at https:// bit .ly/
2W7Dkzt; See also Kleppmann, M (2015) A Critique of the CAP Theorem, https:// bit .ly/ 2W2h0XN
138 Ryan, D & Liang, C (2018) EIP 1011: Hybrid Casper FFG, available at http:// bit .ly/ 32uA3y9
139 Willemse, L (2018) Solving the Blockchain Scalability Issue: Sharding VS Sidechains, available at http:// bit .ly/ 2M5HOEG;
Skidanov, A (2018) The Authoritative Guide to Blockchain Sharding, Part 1, available at http:// bit .ly/ 2O4e261
140 Jia, Y (2018) Op Ed: The Many Faces of Sharding for Blockchain Scalability, available at http:// bit .ly/ 30L6Mxv
141 The core idea in sharded blockchains is that most participants operating or using the network cannot validate blocks
in all the shards. As such, whenever any participant needs to interact with a particular shard they generally cannot
download and validate the entire history of the shard.
142 This issue does not exist in a non-sharded DLTs. See Medium (2018) Unsolved Problems in Blockchain Sharding,
available at http:// bit .ly/ 30F1kw0
143 Wright, C (2017) The Risks of Segregated Witness: Opening the Door to Mining Cartels Which Could Undermine the
Bitcoin Network, available at http:// bit .ly/ 2Z0A8as
144 Freewallet (2019) Why Is It Unacceptable to Send Coins to Segwit Addresses?, available at http:// bit .ly/ 2JPJsYq
145 Bitcoinnews.com (2018) Blockchain Sharding Brings Scalability Benefits and Security Risks, available at http:// bit .ly/
30J7lIb
146 McAfee (2018) Blockchain Threat Report, available at http:// bit .ly/ 2YZBq5D
147 Norton Rose Fulbright (2016) Unlocking the blockchain: A global legal and regulatory guide - Chapter 1, available at
http:// bit .ly/ 2QPntUK
148 ibid
149 https:// www .hackerone .com/
150 Github (2019) Ethereum Smart Contract Best Practices Bug Bounty Programs, available at http:// bit .ly/ 2JMODZg
151 A type of equivalence to this issue would be security compromises of the circa-1980s GSM ‒ and later generations of ‒
mobile communications encryption specifications affecting feature (non-smart) phones whose firmware cannot easily
be updated with a fix for any vulnerabilities. The ability then to upgrade the cryptographic techniques used for ‘old’
transactions should be considered in DLT designs.
152 See further, DarkReading (2019) Quantum Computing and Code-Breaking, available at https:// ubm .io/ 32zrbY3
153 IDQ (2018) Presentation to ITU DFC Work group, July 2018, New York
154 ibid.
155 A type of equivalence to this issue would be security compromises of the circa-1980s GSM ‒ and later generations of ‒
mobile communications encryption specifications affecting feature (non-smart) phones whose firmware cannot easily
be updated with a fix for any vulnerabilities.

156 See Bitcoins Guide (2019) Komodo Incorporates Dilithium, a Digital Signature Able to Ensure Quantum Computing
Security, available at http:// bit .ly/ 30Cr7Vy
157 VentureBeat (2019) D-Wave Previews Quantum Computing Platform with Over 5,000 Qubits, available at http:// bit .ly/
2Lsk1PU
158 ID Quantique (IDQ) is provides quantum-safe crypto solutions, designed to protect data for the long-term future. The
company provides quantum-safe network encryption, secure quantum key generation and quantum key distribution
solutions and services to the financial industry, enterprises and government organisations globally. See https:// www
.idquantique .com/
159 EveryCRSReport (2012) Supervision of U.S. Payment, Clearing, and Settlement Systems: Designation of Financial Market
Utilities (FMUs) , available at http:// bit .ly/ 2K1Q5Ht

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