Updated: May 17
The blockchain cannot be described just as a revolution. It is a tsunami-like phenomenon, slowly advancing and gradually enveloping everything along its way by the force of its progression.
– William Mougayar
Bitcoin, Blockchain and GIS
War torn and ragged, the once glistening jewel on the Dnieper River adorned in Christmas lights bustled with Yuletide celebration. But, further from the city center the streets were quieter, more demure as the dark night settled in. A black Mercedes Benz pulled up and parked along a poorly lit street. In the car sat four men wearing facemasks and carrying Kalashnikovs. In the cold Kiev night they waited. Across the street a large, husky man pulled shut the security curtain, turned out the lights and locked the front door of his store. He turned, his briefcase hanging at his side and walked a few steps towards his car. The four men crossed the dim street forming a semi-circle as they moved towards the man. He slowly raised his hands. He was Russian, his accent gave him away. One of the four men placed a thick black bag over the Russian’s head. With gun barrels pointed into his back he followed their orders climbing into the back of the Mercedes Benz. The four men got into the car and sped away into the cold, dark Kiev night. The man was Pavel Lerner, a blockchain expert and owner of a digital currency exchange in the Ukrainian capital. His captors demanded a ransom of $1,000,000 paid in Bitcoins, the highest valued cryptocurrency. Three days later, on December 29th, 2017 safe and unharmed, Pavel’s abductors released him along an unmarked road in the middle of nowhere.
Crimes involving cryptocurrencies have been increasing; perhaps the most widespread is hackers using ransomware demanding payment in Bitcoins. The worldwide WannaCry virus is the most pernicious of these attacks costing hundreds of billions of dollars. Other crimes of the more traditional variety are also on the rise like kidnapping, as in the case of Chloe Ayling, a British glamour model held for $500,000 payable in Bitcoin. Blackmail and money laundering are also on the rise all of them are using Bitcoin as the currency of choice; and, as are black markets lurking on the darknet. The most infamous of these was Silk Road, the “Amazon” of the underworld, where a person could buy drugs, guns, sex, and murder for hire. Silk Road began operations in February 2011. It was shut down by the FBI in October 2013 with the capture of Ross Ulbricht, code named the Dread Pirate Roberts, the supposed mastermind behind Silk Road. The fall of Silk Road netted unexpected surprises capturing two rogue FBI Agents and a DEA agent found to be peddling in the underworld’s vast enterprise. Silk Road’s net worth when it was shut down was 614,305 Bitcoins. As December 2017 came to a close and Pavel Lerner paid his ransom the value of one Bitcoin peaked at $19,843 making Silk Road worth $12.2 billion and the Dread Pirate Roberts the second wealthiest criminal in history. Ross Ulbricht the creator of Silk Road is serving a life sentence. Dark Web is a documentary about the government’s takedown of Silk Road released in 2015.
Governments have always been slow, and if not slow to act then slow to comprehend. Such is the case with cryptocurrencies. The government sees the phenomenon as a mechanism supporting criminal enterprise but the trending use in digital currencies represents a seismic shift in the way people think about money and where they are placing their trust. There is a decline in the faith of fiat currencies as the countries backing them fall into mounting debt. Concern is fueled by the instability of national and international politics and the threat to the U.S. Dollar by the unraveling of the Petro Dollar. As well, the Euro has been hit by wave after wave of bad news by the economies of Greece, Italy, and Portugal and the so called Brexit, as the United Kingdom withdraws from the European Union. What does that spell for the future of the Euro? Plus, the sanctions and the slide of Russia’s Ruble losing 50% of its value since 2013. The farcical worthlessness of a Zimbabwe 50 trillion dollar note proves there is no limit to the loss in value a fiat currency can suffer when it implodes.
And now, Venezuela is in a plummeting currency death spiral officially falling in value from a par of 10 Bolivars to equal one U.S. Dollar to 25,000 Bolivars all in the month of February 2018, but unofficially reports are that the value has sunk to 230,000 Bolivars to the dollar. As of Tuesday, February 27, 2018, in a desperate attempt to salvage itself Venezuela announced an initial coin offering (ICO) for a national cryptocurrency called the ‘Petro’. The irony in this is that the digital currency will probably survive because it’s on the blockchain but Venezuela will not. If anyone wants to learn about what happens when a nation’s currency collapses Venezuela is a terrifying case study. It is no wonder people around the world seek refuge in an asset which promises freedom from government meddling. It is also no wonder governments are terrified of blockchain’s potential yet fascinated at the same time, like so many other technologies holding great power for both good and evil. There is a stalemate of sorts, a stand-off, between those early adopters with the courage to invest and risk it all for the hope of great fortunes against governments who hold the power to regulate, fine, confiscate and imprison. Tension separates both sides. Who will budge? The United States and Europe have so far been measured in their response while China and South Korea are cracking down on cryptocurrencies. Most people, curious and cautious, sit waiting it out. These stories represent the darker side of Bitcoin, blockchain, and the rise of cryptocurrencies, but there is another side, the more benevolent, useful and hopeful side.
What are cryptocurrencies? Unlike gold which has traditionally been considered a store of value cryptocurrencies have no physical existence. They are digital assets held in a digital wallet. They are an asset with a finite number of tokens. They are driven purely by supply and demand. If there is a greater supply than there are traders the value is next to nothing as there was in 2009 when Bitcoin first came into existence. May 22, 2010 marks the milestone when a digital currency first purchased something in the physical world. Two pizzas sold for 10,000 Bitcoins. Now, there are more traders than tokens and the demand has driven the value to unprecedented heights. One Bitcoin was worth $19,499 on December 15, 2017. Bitcoin is the most explosive financial instrument ever created. But, Bitcoin is not the only digital currency. In all, there are over 1,800 cryptocurrencies. The term “crypto” implies they are secretive and have a layer of anonymity, but there is an irony. Cryptocurrencies are based on blockchain technology. Blockchains have an unalterable integrity system built into them leading to the adage, what happens on the blockchain stays on the blockchain. That creates a conundrum and begs the question, just how is it that what provides a veil of secrecy also holds the promise of open transparency?
To answer that question what exactly is a blockchain? A blockchain is a digital, decentralized, distributed, open and immutable ledger. Each transaction has a string of characters called a hash. Each hash includes a date/time stamp, a unique ID, a code linking it to the previous hash, and a private key identifying ownership, albeit anonymously. Each transaction is another link in a chain that can be traced backwards to the previous link all the way back to the origin of the entire chain called the Genesis Block. What makes the blockchain decentralized is no single computer or entity controls it. Hundreds and thousands of computers make up a blockchain network. Each computer is called a node. A blockchain is distributed because all the nodes work together in a peer to peer network. Nodes on a network record each transaction and these transactions are mirrored on every other node throughout the network. The transactions can be accessed and downloaded from any node on the network. This makes a blockchain an open and distributed ledger. When a node is out of sync with other nodes on the network it is rejected until it is reset to match the other nodes. That makes it impossible to alter any records making a blockchain immutable. For these reasons integrity is built into the blockchain. Anonymity is provided by a private key which ties it to a digital wallet that can only be accessed by the owner. The digital wallet connects to the owner but not the blockchain itself. As a result, a blockchain identifies what, when and who about a transaction. A blockchain does not provide where the transaction occurred. At this time blockchains lack a geospatial capability.
Anytime there’s some data that needs to maintain its integrity, blockchain is definitely there. Essentially, what you would do is get the hash and you would have a hash key and then any changes or alterations are made fully aware at all times.
– Reem El Seed
A Geospatial Blockchain
A company called FOAM is working to change that creating a geospatially enabled blockchain using their crypto-spatial coordinate (CSC) system. Location in a FOAM blockchain doesn’t just record a specific time it also validates proof of location and gives a spatial context that regular blockchains lack. This functionality creates an immutable digital connection to the physical world. Kristoffer Josefsson, CTO FOAM Inc. confirms this saying, “…we can securely connect offline spaces to online assets.”
If digital currencies based on blockchain technology are going to be considered a safe and viable medium for conducting business they must include location. Blockchain’s abilities are what the world needs to curtail crime and corruption and be able to follow the money trail from whom and to where it flows.
“This is what we are working on at FOAM and believe that such a system is needed as a crucial infrastructure in our decentralized future and can open new marketplaces of privacy preserving location data.”
-- John Ryan King, CEO FOAM Inc.
Adding a geotag to a blockchain is like adding Ribonucleic Acid to a cell bringing it to life. Something can’t exist until it exists in time and space. A blockchain with a geospatial tag makes that possible and allows mapping of events in a temporal sequence. This inhibits criminal activity. If a crime were committed using a geotagged blockchain the location of the crime would immediately be known. The hash code from the blockchain would be extracted with a date/time/location stamp and would be flagged on the network to all the nodes making that hash code “hot”. A “hot” blockchain means that hash in the chain would be monitored and if it were involved in a transaction an alert would be broadcast throughout the network focusing on the location. Security cameras and other assets would converge putting eyes on the target, and the transaction would be rejected. Authorities would then be able to trace the digital wallet’s owner like running license plate tags for a car, and shortly thereafter, descend and apprehend the offender. Did George Orwell dream the dream we are now living, “Big Brother is watching you”, while he himself mocks us from his eternal sleep?
Mansour Raad, Senior Software Engineer and Big Data Advocate at ESRI, sees location enabled blockchain opening up opportunities for people to interact with their representatives. He is excited about the prospects saying, “We can envision dozens of potential use cases in geospatial contexts from fine-grained citizen engagement in smart city initiatives through to activity-based military intelligence applications.” Certainly, this is a more empowering view. Some of the largest companies in the world are also exploring uses for blockchain and geospatially tagged ledgers. This mass effort and focus on innovation will have some magnificent results. Mansour goes on to add, “The influx of companies like Boeing and Lockheed Martin and forward-thinking communities like Dubai are searching for blockchain-based solutions to their problems.” This will drive innovation. Both ends of the spectrum are there from the frontline developers to the back end buyers with large pockets.
Latitude and Longitude has been the backbone of location and navigation for over 2000 years, when people navigated primarily by landmarks and the stars. That worked well for those not venturing beyond their familiar locales; but as knowledge of the world expanded and monarchs ruled larger and larger empires, and trade spread to further and further regions, and wars and conquest extended to unknown realms maps were necessary. A grid system for maps was created by Hipparchus, another of those great Greeks upon whose shoulders the world still stands, and that coordinate system known as latitude and longitude has served well for two millennia, but the digital age demands another solution.
And so it is with change, it happens over many years but the transformation happens all at once. The change has been taking place for years with location based formats such as the Military Grid Reference System (MGRS) and the more universal digital Degrees Minutes Seconds (DMS) supporting GPS based systems, as well as, the more novice friendly, What Three Words (W3W), which is especially useful for disaster relief operations. All of these serve their purpose but fall short of providing a concise code which is critically important to make geotagging a blockchain possible. That is of great value considering blockchain’s potential in logistics and transportation, both dependent upon precise location data. Add the growth of IoT and one gets a sense of the demand for a location based blockchain and how enormous such a system would be. The Port of Rotterdam, Europe’s largest shipping facility is currently testing blockchain for logistics. Companies like Ford, IBM and PwC are looking at its potential. Mansour Raad adds, “…Some data scientists see a benefit to utilizing an addressed reference system such as the Open Geospatial Consortium Discrete Global Grid System (OGC DGGS), due to its holistic ability to fit into existing hashing algorithms. This also turns map algebra into map set mathematics with drastic advantages to speed, computational resource usage and distribution.” Get ready! Blockchain is a disruptive technology. It is so powerful that it is difficult to predict its impact, but it will touch everything. “The old question 'Is it in the database?' will be replaced by 'Is it on the blockchain?” – William Mougaya
Government more accountable to the people tracing where their expenses are actually going. The government could post an annual tax bill for each person online that could, in theory, show each person based on the taxes they paid where each dollar was spent. This is empowering and a new model for transparency.
A digital wallet is virtual, but it can be connected to the physical world through a smart key, like a SIM card. And, if the blockchain were geospatially enabled it would create a layer of security preventing any use if the owner of the digital wallet were not nearby. That’s automatic two-step authentication. At the personal scale imagine a digital wallet having to be within a certain distance of a smart key for it to be effective? It would render money useless to anyone other than the owner. A geospatially embedded blockchain could make that possible. Cash can transfer hands and no one is any wiser about where the money came from, but transfer a blockchain based currency and the new owner is part of the permanent record. What would that do to crime? How would it effect blackmail, kidnapping, human trafficking? Perhaps the smart key is attached to the owner’s cellphone, or a smart watch, or a smart ring? Most likely it would be a smart chip implanted in the owner’s arm or thigh. The technology would also be useful for password tokens, building access security cards, passports, etc. It holds great promise for warding off theft and increasing security.
Uses for a blockchain extend beyond currency and are not necessarily associated with financial transactions. Transactions are events: a download is a transaction; clicks on a webpage are transactions; passing through a checkpoint is a transaction; an image capture is a transaction; IoT triggered events are transactions; and electronically signing a document is a transaction. Blockchains can be coded into software to track downloads of digital copies such as songs, movies, audio, video, images, programs, documents, etc. The obvious implications are copyright protection. Blockchains can also provide information security for trade secrets, military secrets and even national secrets. Companies that contract to the government would be able to lock their trade secrets from hackers and spies by controlling digital copies with a blockchain. A geocoded blockchain could encrypt data outside of geospatially approved areas or if accessed by anyone other than approved private keys. The contents of secure packages could never fall into the wrong hands even if the package was intercepted. The encryption could not be unscrambled without being in the proximity of the smart key. Additionally, every download would record what, when, who and where any attempts at access occurred. Blockchain technology also enables smart contracts such as medical records, land ownership records, shipping manifests, and notaries, etc. Blockchains can be made a part of physical inventory. Geocoded embedded blockchains make asset management more secure restricting transactions to within specific locations. This would be beneficial in a store for controlling inventory, or at a facility for tracking movements of assets, whether the facility is a military installation, an industrial complex, a government facility, a school campus, or a penitentiary. In the case of a penitentiary the prisoners themselves can be tracked.
Closing Thoughts about Blockchain
“In a time of deceit telling the truth is a revolutionary act.”
In a free republic the integrity of elections must be protected and made fully transparent. Geotagged blockchain election ballots would be an immutable record of the election. A little geospatial analysis could easily detect locations with multiple votes making it highly suspect for voter fraud. Add the requirement to have a private key associated with each voter and voter fraud would be eliminated. One of the benefits would be eradicating the months of post-election bickering wasting time, tax dollars, and sanity. It’s hard to argue with a transparent, decentralized, distributed, and immutable ledger; so, no matter which side of the political divide someone is on removing reasons for conflict should benefit everyone.
If you look at the non-stop news cycle about the government missing texts, missing emails, possible collusion, a dossier, possibly two, and who knew what, and when did they know it, all of that could be resolved with blockchain technology. An immutable record would make it nearly impossible for anything to come up missing and a geospatially tagged blockchain would show exactly who knew, what they knew, and where they were when they learned it. Deception would be made much more difficult. Blockchain has the potential to sterilize corruption in politics. The ideal for an open and transparent political system is worth holding on to.
Learn about blockchain because it will become more and more prevalent in conversations, on television, in movies, and on the news. I hope this article helped shed some light on the technology and its future and the advantages of adding a geospatial component to a blockchain.
 William Mougayar is the Voltaire of the blockchain revolution. He applies his visionary intellect to the merits of a trust-based, information-sharing system prescribing it a cure against the ills of business, politics and society. Mougayar is stoking the coals of the digital transformation just as Voltaire helped light the torch of the French Revolution.
 Reem El Seed is the coordinator of the Blockchain Users Group for the Washington, DC Chapter. She is a prodigious and enthusiastic proponent of blockchain and cryptocurrencies and a well-known figure in the Washington, DC area.
Reprinted courtesy of Geospatial Solutions Magazine
About the Author: William Tewelow, GISP
William retired from the U.S. Navy in 2009 after 23 years as a geospatial imagery intelligence specialist, a naval aviator, a meteorologist and an oceanographer. In 2004 William was on the first team to test the Navy’s geospatially enabled, real-time battlespace. In 2007 William led one of the first teams of geospatial analysts to support Special Operations Forces. In 2006 he was among the first in the nation to earn a Geospatial Specialist certification from the U.S. Department of Labor. In 2015 He earned the Geospatial Information Systems Professional designation (GISP). In 2016 William was on special assignment to the U.S. Department of Transportation working for the Geographic Information Officer to develop a crowdsource app for the National Address Database, under the authority of the White House Open Government Partnership. William is a manager in the Federal Aviation Administration’s Aeronautical Information Services. He also serves as chairman of the board of Smart Cities Group. He authors GeoIntelligence Insider, a bi-monthly column for Geospatial Solutions, a publication of North Coast Media.