Sun. Mar 7th, 2021
Blockchain, History

The age of the blockchain is usually counted from the moment bitcoin appeared. And the very name of the technology, and at first it was a combination of the words Block and Chain, was invented by the author of the Bitcoin cryptocurrency protocol.

In 2008, Satoshi Nakamoto embodied the idea of blockchain in the implementation of the Bitcoin system. But the claim that the Bitcoin system was the first implementation of the blockchain is not entirely true. The history of blockchain began much earlier, and this year the blockchain concept marks a round date.

Exactly thirty years ago, in 1991, cryptographers Stuart Haber and Scott Stornetta in their work “How to Time-Stamp a Digital Document” described the scheme that formed the basis for building a modern blockchain.

And in the anniversary year, it is worth remembering the fascinating story of the birth of an idea that is currently turning our world upside down.

“To Stamp The Seal Of Time In Aged Things”

The title of the chapter includes a Shakespeare quote from the work of Stuart Haber and Scott Stornetta “How to Time-Stamp a Digital Document”.

On a rainy autumn day, a person sends an envelope in his own name by mail. What for? To confirm the authorship of the document attached to the envelope. A sealed envelope with a the postmark, where the date of departure is indicated, serves as proof in possible disputes about the time of creation of the document. In fact, this is the block that underlies the idea of the blockchain.

In the early 90s of the last century, young scientists Stuart Haber and Scott Stornetta could not have imagined that their idea would become the starting point for a huge virtual financial system. Their goals were quite modest and purely practical.

Cryptographers have gathered to develop technology that will once and for all solve the issue of intellectual property ownership. At the time, they both worked at research company Bellcore.

In their paper, Stuart Haber and Scott Stornetta describe a chronologically constructed hash chain data to confirm the authenticity of time-stamps on digital documents. At the same time, scientists take on two obvious tasks: to insure the document itself and the time-stamp against changes.

“A Naive Solution”

In the third part, called “A Naive Solution”, the authors describe a “digital safety-deposit box” when a client transmits a document with a fixed date to a time stamping service (TSS). This service records the time and date and retains a copy of for safe-keeping. However, as Haber and Stornetta point out, this approach raises several problems at once:

  • Privacy. A third party could eavesdrop while the document is being transmitted, and after transmission it is available to the time stamp service. That is, the client now has to worry about the safety of the original and the copy in storage.
  • Bandwidth and storage. The time and amount of memory required to retrieve and store depends on the length of the document. The cost of processing a large document can be huge.
  • Incompetence. An error may occur in the date on the document, or an incorrect date may be entered due to malicious intent. In addition, data can be lost at any time of storage.
  • Trust. Its presence or absence is considered by the authors to be a fundamental element of the entire structure. Nothing in the above scheme prevents the client from colluding with the storage service to change the date on both the original and the copy.

The idea of Haber and Stornetta was that the document was hashed, and the value of the cryptographic hash function was already sent to the “digital safety-deposit box”, and the document remained with the sender. In the fourth part of the article, what is today a hash chain blocks is absolutely transparently indicated:

In this case, any change in the document, even by one bit, would lead to a mismatch of the hash identifier in the storage and in the document on hand.

The question of trust was initially considered unsolvable by the authors. And only by going from the opposite, undertaking to prove that the problem of trust is insoluble to the end, they came across a solution. To prevent or prove collusion between the two parties, the researchers suggest introducing a third party. To test its integrity, in turn, you need to involve the fourth party, and so on indefinitely, until the whole world is involved in the scheme. At this point, Haber and Stornetta may well have exclaimed “Eureka!”. So they had the idea of decentralizing the “digital safety-deposit box”, when the third party will have a lot of disparate witnesses. The article also describes a digital signature that would allow you to identify the signer in the future. 

Scientists believed in their idea and over the years refined and expanded the set of proposed methods. However, to implement it in life thirty years ago, there were no hunters.

 “Faith Without Works Is Dead”

Perhaps the work of two New Jersey cryptographers would have remained gathering dust among the many scientific works in university libraries. But scientists believed in their idea so much that they did not stop at the theory. Three years after writing the article, they organize the service “Surety”, which provides services for applying time-stamps. And this is where they put their theoretical knowledge into practice. Surety offers its “Surety AbsoluteProof” for calculating the hash function of a document.

The hash function on the Surety server gets a timestamp for creating a seal identifier. The document identifier is sent for storage to the client and to the AbsoluteProof registry database. This database contains all the identifiers of the Surety service, and its architecture is a familiar hash chain. In this way, Haber and Stornetta embody their idea of an immutable, consistent data storage system.

It remained to solve the problem of trust. It was necessary to find a witness to the authenticity of the data, the credibility of which would not cause doubts. And such a witness was found — in the person of hundreds of thousands of American breakfast lovers with a morning newspaper in their hands.

Surety chose the New York Times newspaper as the carrier of information. It is an ingenious solution to satisfy the basic requirements at the time:

  • General availability — the daily edition was published with a circulation of about half a million copies on weekdays and over a million on Sunday – the day the hashes were published.
  • Immutability — after the publication of the newspaper, it is almost impossible to change the information in printed copies.

Since 1995, the New York Times has been used as a public protocol. Surety printed the hash code of all the identifiers added during the week and printed this value in the newspaper, in an inconspicuous section called “Notices & Lost and Found”.

Most of the newspaper’s readers had no idea what was hidden behind a set of numbers and letters. The genius of the solution also lies in the fact that the popularity of the newspaper has become a guarantee against falsification of hash codes. In order to imperceptibly change the data, an attacker would have to replace the entire circulation of the newspaper with a hash. The applied technology is the world’s first blockchain. With only one difference from modern blockchains — the involvement in the authentication of print media.

In their work, Stuart Haber and Scott Stornetta also used the Merkle tree to reduce a set of hashes to a root value.

Let Go, But Don’t Forget

Haber and Stornett did not gain untold wealth and world fame as the authors of the most promising technology of the future. For several years they ran their Surety service, then went to work in other blockchain projects. And Surety still exists today, offering long-term and independent proof of document integrity.

Bitcoin also became the first incarnation of the cryptocurrency on the blockchain technology. In the main bitcoin document describing the philosophy and concept of the system, there are eight references to supporting scientific works, three of them are the work of Stuart Haber and Scott Stornetta. That is, the developer of the world’s first cryptocurrency relied on the technology they described.

In an interview with BREAKER Magazine for 2019 Scott Stornetta admits that even after spending a lot of time developing the idea, he did not immediately see the connection between blockchain and money.

A slide from a presentation Haber and Stornetta gave to an investment firm in 1993 lists the intended applications of their technology.

Among the promising areas of application of the distributed immutable ledger are court records, faxes, records from laboratories, criminal investigations, accounting, etc.

The scientist believes that it is necessary to further explore the possibilities of the blockchain space in search of answers to the questions:

  • where and what calculations should be carried out?
  • what incentives should be used to maintain the stability of systems?
  • how to reach consensus?

All we really need to do is have a self-sustaining system where there’s an incentive for users to naturally want to hold the record for their own self-interest, which benefits others using the system.

Could two young cryptographers at the end of the 20th century imagine that they will go down in history as the creators of the first blockchain in the world? Of course not. But their ideas have already been picked up by new inquisitive minds in the 21st century. And one day, textbooks on the history of blockchain will start with their names, Stuart Haber and Scott Stornetta, two cryptographers who quoted Shakespeare in scientific work and printed hashes in a paper newspaper.