Blockchain for the Defence Sector
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on April 5th,2021

A blockchain is all about organizing and storing information in accordance with a predefined logic. Instead of data being accounted for and stored on a central server’s database, it’s encrypted, and a copy is stored on every node connected to the network. This disruptive technology is recognised as a possible revolution of the way the Internet functions and opens infinite possibilities. Blockchain is based on distributed databases that are shared among peers. It can thus be seen as a huge file that stores data in a logical, historical, secure, and immutable way. 

They can be thought of as a succession of virtual blocks, each containing distinct pieces of information concerning a given record or series of transactions, and which can be made public, private, or permission. Blockchains can be populated with data from any approved parties (e.g., buyers and sellers, supply chain partners, financial institutions, etc.) and, once that data is broadcast to the network, it is verified by participants or “nodes”, protected using cryptography, and added to the “chain”. 

This peer-to-peer system stores and shares a digital ledger of data using cryptography to ensure confidentiality and integrity. As a result, blockchain networks not only reduce the probability of compromise but also impose significantly greater costs on an adversary to do so. The importance of this technology is the creation of trust in digital data because a large decentralised network is able to attest the validity of data and it holds a permanent secure digital record. 

Other possible applications come in the implementation of smart contracts on the blockchain, identity protection or data protection. However, the benefits and real applications in the fields of communications and countering cyber threats will likely not be seen until 2025 at the earliest.

But the question that has been getting asked a lot lately is, “How can blockchain transform the defence sector?”

Views on blockchain’s potential in the defence sector range from claims it’s the ‘next generational leap’ as an outright replacement for ‘current security protocols and databases that are no longer fit for purpose’; to accusations it has been ‘overhyped’, with critics arguing it is unlikely we will realise any benefit from its deployment until 2025. Our view is that blockchain has the potential to be useful in defence organisations and that this needs to be explored and tested now.

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How does blockchain in the defence sector work? 

Underpinning the cryptocurrency Bitcoin, blockchain is a large distributed accounting ledger that records all user transactions. Unlike traditional ledgers, blockchain verifies transactions using peer-to-peer networks to establish distributed consensus, eliminating single points of failure. Its design ensures that the data is immutable and auditable as each transaction links to its predecessor and every member of the network has a copy of the ledger.

Making the case for Blockchain in Defence to deliver value now 

The immutability and peer-to-peer characteristics of blockchain mean that a successful hack would require enormous quantities of computing power to access thousands of user computers to manipulate the data. This inherent security lends itself to some critical applications within defence.

Blockchains in the defence or aerospace fields are more likely to be private or permissioned, but many core concepts remain. When one better understands how blockchains can facilitate complex transactions, the benefits of applying them to the aerospace and defense industry come into focus. Here are some examples: 

Verifying partner identities: With greater transparency comes greater accountability. The blockchain can verify that all partners in a defence or aerospace supply chain relationship are operating within established parameters and are indeed who they claim to be. This can provide comfort to all stakeholders, especially when it comes to ensuring critical weapons and equipment are made and supplied by approved partners and being sent to trustworthy hands. 

Parts certification: Blockchains can track the origin and quality of parts and materials in an industry where quality is paramount and mission-critical, from aerospace components to military-grade navigational devices, and everything in between. Moreover, the ability to determine the origin of materials and their history can stop counterfeit or non-approved components from entering the supply chain, while also ensuring the final product reaches its intended destination. 

For example, with a blockchain enabled supply chain, the journey of a weapon’s part can be tracked from its initial production to its final delivery, and beyond. This is achieved by embedding sensors, reporting processes, and Internet-of-Things technologies at every step to monitor and report where its materials were sourced from, when and where it was manufactured, how it was transported and stored, and any repairs or maintenance that it has undergone. By coding this information to blocks along the chain, stakeholders can continually verify the source of their equipment and other details of importance if issues of quality and accountability arise. 

Connecting allies: Many of today’s defense initiatives include partners from around the world. Herein, blockchains have the potential to enable supranational defence projects between allied governments by providing all participants with an ability to securely track commitments required to build and maintain trust. Moreover, using smart contracts, blockchains can facilitate commitment to agreed initiatives, for example by automatically committing funds to build shared infrastructure when the right conditions are met. 

Managing Supply Chains 

One of these is in defence’s complex supply chains, which transport equipment and personnel in difficult terrains across the globe. The lack of visibility and cyber resilience across the tiers in these supply chains are recognised as one of the biggest threats facing the sector today. Consider the transportation of medical devices that starts with the supplier(s) before transit through MOD delivery organisations to Brize Norton for transport to an overseas base, before the onward journey to the end user on operations. During this process, there are a series of critical points where the process could fail and where there are opportunities for manipulation.

Not only can blockchain address these issues, it offers a more secure record for supply chain management and enables greater auditability and real-time identification of responsibility. The American supermarket, Walmart, has recently demonstrated this to great effect, with its development of a food safety blockchain that reduced the time taken to trace the source of food from seven days to 2.2 seconds, helping to speed up remediation and tackle E.coli outbreaks.

Most defence platforms and systems are staggeringly complex. These assets are very mobile (globally) and require collaboration among a number of entities to keep them operational and mission-ready. Technology can help operators, manufacturers and suppliers ‘harden’ the supply chain and improve operational performance through the entire life cycle, from raw material to retired asset.

Despite the sophistication of many weapons systems and platforms, their supply chains — both for raw material to finished product and post-production maintenance — are often still managed using traditional, and largely manual, processes. Some government customers have applications to trace and certify parts, but orders, parts status, retrofits and other routine processes have to be coordinated across multiple systems, with each supplier keeping tabs on its own information. Many original equipment manufacturers (OEMs) also have their own centralised systems to coordinate with suppliers for a given programme, but those are proprietary and siloed.

Because most weapons systems supply chains are so complex — with some components requiring parts from fourth- or fifthlevel suppliers — they are prone to disruptions. For example, the US Government Accountability Office flagged several issues with the F-35 supply chain, including shortages of spare parts, limited repair capabilities, mismatched parts for deploying aircraft and an immature global network to move parts.

Also, Blockchain can help make the supply chains for defence assets — and the assets themselves — more secure. As noted above, cyber threats, either from hackers or foreign states, can attack the supply chains of weapons platforms and systems. They can also attack the underlying intellectual property behind those designs, or the assets themselves. Some estimates hold that a new asset has, at best, a six-month advantage on the battlefield before enemy forces have figured it out and developed countermeasures. 

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Access and Identity Management 

It is paramount that defence organisations understand who is accessing physical and virtual sites at different security classifications and, crucially, what visitors are doing once they are granted access. This requires significant investment in databases that store and process volumes of confidential and personal information. Past cases have illustrated how these databases have vulnerabilities, such as the way hackers gained unapproved access to background information submitted by military personnel for security clearances in 2015. A further challenge can be seen in the way different parts of the UK defence sector can spend weeks on processes, such as updating a contractor’s access to particular sites and IT, only to have to repeat the process when they need to work elsewhere. 

Blockchain can reduce these problems by working alongside existing directories and databases using Signature Chains to act as a personal blockchain for each user. This helps generate digital identities and ensures all documentation, access rights and vetting are recorded. This then eliminates the need for any repetition and management of access rights, making change requests almost instantaneous.

Setting the conditions for success 

However, there are some steps that will need to be taken to enable the successful adoption of blockchain on a wide scale. This includes making sure there is stringent data governance and quality assurance in place, as once the data is stored on a blockchain it is immutable, and so must be quality assured prior to storage. This makes data management policies, backed by technology like Physical Unclonable Functions, essential. It may also require the adjustment of the public-private key cryptography. Most blockchains use SHA-256, however certain defence-grade solutions require specific private-public key cryptography to comply with cyber security standards.

Another important element is the need for organisations to choose the right platform as the market is inundated with platforms to develop blockchain applications. Each of these have their own weaknesses and strengths and these will require careful consideration before a solution is adopted. Then, as with any disruptive technology, implementation will need to be accompanied by appropriate training to minimise user error.

Acting in anticipation of the hype 

Defence organisations should recognise that there is hype, but blockchain can deliver significant value, though, for now at least, this will be slow to realise. Nevertheless, this should not be a reason to postpone experimentation, there are existing opportunities where tangible benefits can be realised immediately and the risks of delaying exploration of these are higher than waiting until the hype becomes a reality.

The way ahead 

Due to the nature of blockchain, challenges may require further research on areas such as interoperability, network infrastructure and a thorough analysis on its regulatory framework. 

In the coming years, the defence research community is expected to search for new applications for the military based on blockchain technology with predominant candidate areas such as cyber defence, secure messaging, resilient communications, logistics support and the networking of the defence Internet of Things. 

It seems unavoidable that the work on CIS and neighbouring fields as Modelling and Simulation will strongly be affected by the advances to come from this disruptive technology.

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The Bottom Line

There are tangible benefits to embracing the blockchain in this industry. Yet more than simply enhancing the speed, efficiency, and security of transactions, blockchains can increase transparency and contribute to the defense industry’s. In our future article, we’ll look at real world examples of where digital ledgers are already changing the field, and the steps to consider before embracing this technology.