For security agencies, blockchain goes from suspect to potential solution

Police and security agencies have so far only taken an interest in blockchain – the distributed ledger technology behind cryptocurrencies like bitcoin – for tracking criminals hiding illegal money from banks.

But that’s changing as some civilian, police and military agencies see blockchain as a potential solution to problems they have wrestled with for years: how to secure data, but also be able to share it in a way that lets the owner keep control.

Australia, for example, has recently hired HoustonKemp, a Singapore-based consultancy, to build a blockchain-based system to record intelligence created by investigators and others, and improve the way important information is shared.

“They’ve been trying for years to come up with a centralised platform, but people are reluctant to share information,” said Adrian Kemp, who runs the consultancy, which was awarded a A$1 million ($757,500) grant by AUSTRAC, Australia’s financial intelligence agency, and the Australian Criminal Intelligence Commission.

Blockchain’s appeal for data sharing is threefold.

Its ledger, or database, is not controlled by any single party and is spread across multiple computers, making it hard to break. Once entered, any information cannot be altered or tampered with. And, by using so-called smart contracts, the owner of information can easily tweak who has access to what.

It’s a sign of how far blockchain technology has come within a decade since the publication of a pseudonymous paper describing bitcoin and the blockchain ledger that would record transactions in it.

Bitcoin has since become the preferred currency not only of libertarians and speculators, but also of criminal hackers. The bitcoin price is volatile, and hit record peaks late last month.

Governments are already exploring ways to store some data, such as land records, contracts and assets, in blockchains, and the financial industry, too, has experimented with blockchain technologies to streamline transactions and back-office systems, though with limited success.

The closest most law enforcement agencies have come to the blockchain has been working with start-up firms to analyse it for evidence of criminal deals.

But in the past year or so that attitude has begun to change.

The United States Air Force (USAF) has funded research into how blockchain could ensure its data isn’t changed. In May, the Defence Advanced Research Projects Agency (DARPA) awarded a grant to the company behind an encrypted chat program to make a secure messaging service based on the blockchain…

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