We must take the blockchain as an important breakthrough for independent innovation of core technologies, clarify the main direction, increase investment, focus on several key core technologies, and accelerate the development of blockchain technology and industrial innovation.

- President Xi Jinping1 (at the Political Bureau of the Central Committee meeting on 24 October 2019)

Embracing blockchain technology and Artificial Intelligence will be beneficial for all sectors.

- Prime Minister Narendra Modi2 (at 54th Convocation Ceremony at IIT Kanpur on 28 December 2021)

Background

The above two statements give key insights into the different types of approaches adopted by the two emerging economies in espousing new technologies. One premier spoke precisely and to the point as to what is required, how to make headway about blockchain technology and the end goal. On the other hand, the other version is an all encompassing statement and definitely, two years late. Arriving at every technological and innovation milestone at the earliest should not only be stimulated but also needs to become a prime objective. It behooves a potential world leader to take the lead and promote this revolutionary technology and use it to augment India’s position in the new millennium.

China has made fundamental system preparations for its digital economy. In this regard, blockchain technology would be one of the core building blocks in establishing an effective system. The integrated application of blockchain technology has the wherewithal to play a pivotal role in future military tech innovation in the country. This paper aims to examine nuances of blockchain, discuss its needs and advantages, whilst exploring ideas for implementation in the Navy and put across recommendations to double down on the tail chase with technological upgrades.

Introduction

The word Blockchain sounds familiar to many but it has become a complex word for a simple concept. Ledgers and records have been at the core of commerce for ages, being used as records for numerous resources, such as the exchange of articles, money and property. An extended arm of this concept, a distributed ledger, at its essence is an asset storage that is shared across multiple sites, geographies, or institutions. All network participants have their identical copies and any changes need to be reflected across all entities. Distributed ledgers also have been around for thousands of years, with the first notable implementation being a banking system used by the Roman Empire that allowed people to participate in transactions across its regions. They also extended this concept to paper cheques, which fed into the ledger to record transactions.3

Extension of these ideas into the digital domain began in the nineties which led to the concept of Distributed Ledger Technology (DLT), and has been described as a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. This led to the creation of global blockchain systems.

What is Blockchain?

Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack or cheat the system. It is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on a blockchain network.4 So instead of one computer or authority, which holds all the information, now the database is spread across the entire network. These ledgers are immutable, meaning that they cannot be changed without proper consensus, or agreement, among network participants.5

Any attempt to alter any block will alert the participants of the tampering attempt. “Smart contracts” can be created to apply business rules automatically as contractual or business obligations are met. A similar concept can be used in military terms to pass instructions as directives/ orders apply automatically, once a tactical or operational situation is achieved. The ‘distributed’ nature of the ledger ensures that all participants (different fighting units, formations, fleet and flotillas), across different geographies and environments, can transact with a shared common view.

Blockchains can also be used to provide high-quality, trusted data on a large scale to track any asset and transaction, ranging from ammunition tracking or audit data for physical or digital objects (e.g. the tracking of weapons/ machinery parts for delivery, turnaround or maintenance schedule, data recording and analysis of weapons firing to assess technical/ human errors).

Key Technologies within Blockchain. Blockchain technology has undergone more than ten years or even decades of development and evolution. Aside from a combination of existing technologies, new technologies have been integrated and innovation has been continuously explored. The key technologies involved are mainly: -

  • Block+Chain. This is a basic structure for data recording. The block is composed of a block header and a block body. The block body is responsible for recording data from the previous period, mainly quantity and details. The block header encapsulates the current version number, the former block’s address, and the time stamp.6

  • Point-to-Point Communication. The blockchain uses a Peer-to-Peer (P2P) network for communication, making each user in the network not only a node but also a server. The resources and services in the network are scattered on all the nodes, and the transmission of information and the realization of services are performed directly between nodes without any intermediary participation or server intervention.

  • Consensus Mechanism. In light of this mechanism, any node in the network can produce new blocks, provided that the new block meets pre-set requirements of the consensus mechanism, i.e., to be recognized by all nodes in the entire network and added to the shared blockchain with independent storage.7 The consensus mechanism may sound verbose but it is essentially an agreement to make any change or addition/alteration to the data block upon reaching a pre-defined situation or outcome.

  • Smart Contract. It is a set of procedural rules and logic realised through decentralised, trusted, and shared script codes deployed on the blockchain. Generally, smart contracts are signed or encoded by relevant parties (authorities such as OTC, Fleet Commander or Theatre Commander), and then attached to blockchain data in the form of program codes. Smart contracts encapsulate several predefined states, transition rules and scenarios that could trigger contract execution (e.g. clear to engage targets after reaching certain coordinates) as well as response actions in specific scenarios. The blockchain can monitor the status of smart contracts in real-time, and activate and execute the contract after checking external data sources and confirming that certain trigger conditions are met. Smart contracts can ensure traceability, irreversibility and transaction security in the absence of third parties.8

Relationship with Artificial Intelligence (AI), Big Data and the Internet of Things (IoT). The development and application of blockchain technology will not be possible without infrastructure support of next-generation information technologies such as AI, Big Data, Cloud Computing, and the IoT. In turn, blockchain technology has also promoted advancing of these information technologies. Combined with the decentralization and data tamper-proof characteristics of the blockchain, it has potential of promoting widespread application within the military domain.9

Where We Stand. Blockchain technology may not be an easy concept to appreciate for our military forces which are rapidly transforming into technologically enabled forces. The sooner they embrace this concept, the better. The opportunities offered by implementing widespread use of blockchain technology are immense and its non-application can have a negative impact. To push ourselves as a world leader in technological innovation, there is a need to engage with policymakers, the private sector, and academia to promote research and development of blockchain technology into the military fabric. While the USA, China and Russia have invested millions of dollars on Research and Development (R&D) in blockchain technology, the policymakers of our country are still attempting to understand what this technology is all about. Regulators are still trying to enforce old laws on new technology (banning of cryptocurrencies, high taxation on the exchange of crypto etc.).

Prospects - Military Application

The practical applications of this technology are numerous and can cover the entire spectrum of military warfare. However, some of the major and significant applications which will facilitate appreciation of direct implications and future possibilities have been elaborated below: -

  • Naval Logistics. Blockchain technology can create a separate, secure, shared and permanent record as well as help track and audit transactions of various supply chains and among all operating partners. It can also perform effective lifecycle management on defence supply chains and the system of procurement and logistics.10 By incorporating blockchain technology into the military logistics network, a decentralised autonomous network of personnel and materials in logistics systems can be built. Data related to production, procurement, transportation and distribution of materials in the systems can be stored in various blocks in a unified manner, which can greatly improve the security of military logistics information, and enable military logistics to meet requirements of various services and departments. Modern military logistics involves intelligent warehousing, packaging, transportation and distribution. The different processes morph into a small military IoT, which is based on a dynamic autonomous network of people and objects.

  • Blockchain + Command Information System. The command information system is a vital method to form a real-time, accurate picture of war and help headquarters implement methodical and efficient management of subordinate units and weapons. As an organic “human-machine” system, taking Commanders to be the core, and using computers and other information technology equipment as the prerequisite and material guarantee, the system progressively combines various command-and-control methods to enable high-level automation in the collection, transmission, processing and usage of military command information.11 It ensures data integrity, availability, and security of the command information system, and guarantees enhancement of combat effectiveness and the successful seizure of initiative in a war.

  • The command information system has centralized networks and a common database. As an important target in wartime and even peacetime, it is vulnerable to enemies, adversaries or hackers. The enemy may use information warfare to conduct network and electrical attacks, causing the entire information system to be paralysed, or to steal and falsify identity information by tampering with important data. Therefore, Commanders face great risks in data authenticity. Relying on incorrect or fallacious data can seduce Commanders into making wrong decisions and issuing false commands. The enemy could also pass fake orders by tempering data. All these issues however, can be avoided by using blockchain technology.12

  • Blockchain + Lifetime Weapon Management. Modern warfare requires Combat Systems to have alacrity in response and agility. These however, need a large amount of data to be recorded such as design plans, test results, and combat technology status during the whole lifecycle of weapons, from project demonstrations, development, production, and from delivery to service to retirement. Information can be easily lost or tampered in the process. Based on blockchain technology, building a lifecycle weapon and equipment management system jointly operated and mutually supervised by developers, producers and users is possible.13 With the system, users can track and manage equipment design parameters, test data, combat technology status and maintenance records. No content can be manipulated or deleted, which improves information security, convenience and credibility. All management actions will rely on smart contracts for open and transparent decisions, reducing management hierarchy, and finally improving efficiency. At the same time, every component of weapons and equipment can be traced to their origin, which helps resolve disputes over procurement contracts, and constructs a complete unbreakable monitoring, management and control system, thus improving management security, convenience and credibility.

  • Blockchain + Sensitive Data Management. Using the tamper-proof feature of blockchain technology, we can provide a solution to the problem of ‘hard to maintain evidence’ in sensitive data management in military inspections and supervision, human resources, medical and healthcare. ‘Truthful record’ of all information can be realised through ‘whole-network witness,’ thus avoiding counterfeit documents, missing files and information tampering.

  • Naval Procurement. New ways of contract management and transparency in the procurement process on a real-time basis provide increased efficiency for both naval contracting directorates and the private sector contractors providing goods and services. Just as the Government of India and the Navy found a way to build new applications and make distributed systems possible on the internet through the Government eMart (GeM). Blockchain enables new capabilities by offering a layer of trust that the Navy can apply to improve its procurement process.

  • Naval Data Security. Security of battlefield data transmission has to be ensured, and problems of signal interception, deciphering and reconnaissance need to be resolved to optimally ensure having an edge over the enemy. By using quantum key distribution as a replacement for the original private key structure, and tapping into the anti-eavesdropping and anti-interception features of quantum cryptography in the blockchain network, we can greatly improve the robustness of the blockchain network as demonstrated by the Russian Quantum Centre and Russian Academy of Sciences, which successfully tested the first quantum blockchain system.14

Drawbacks of Blockchain

Like any other developing technology, blockchain also suffers from certain problems, which can be mitigated through research and development. However, the challenges are minor as compared to the benefits achieved. Some teething issues which the end user may face are as follows: -

  • Time and Processing Power Intensive. It is challenging to meet high-frequency response requirements with a complex data synchronization mechanism. Each data modification in the blockchain requires all nodes in the system to update ledger data synchronously, which takes a long time. Modern warfare requires split-second decision making, especially at the tactical level. This means situational information updates are required faster, and combat units stream information at high data rates. It can be difficult for blockchain technology to meet these real-time response requirements instantaneously.

  • Data Security Risks. The consensus mechanism and encryption algorithm still have security risks. The security of the blockchain technology consensus mechanism depends on the cryptographic algorithm, which by itself is not secure and there are still risks to be proofed against. At present, leading technology developers are stepping up efforts to make breakthroughs in quantum computing technology. Once a reliable and practical quantum computer is developed, most blockchain technologies of today may become redundant unless updated.15

Way Ahead for the Indian Navy

It is imperative that the relatively new blockchain technology and its advantages be understood by policy makers and that it gets a ‘go-ahead’ for implementation. The Navy has become virtually digital in its data transfer, management and storage as seen through the use of Rukmani, Maritime Domain Awareness Operation Centres etc. The blockchain allows these systems to become smarter and more efficient. A roadmap and suggestions for achieving the desired state have been discussed below: -

  • Formation of Blockchain Team. A team comprising personnel from various branches and backgrounds at Naval Headquarters level is required to perform the role of a think tank, understand the technical advantages and challenges of every scenario whilst exploring various avenues where blockchain can be introduced in the IN to attain efficiency in naval warfare. As discussed earlier, the applications of the technology are varied and many. But certain areas such as the use of blockchain in Maritime Domain Awareness (MDA), Tracking Radars, Satellite Communication and Quantum Communication, Electronic Warfare, Charge Books, Charge Documents, Cipher, Sensitive Data Handling, Maritime and Joint Operation Centres, War Room, Audit Organisations etc. can be given priority. These systems and nodes/ centres can enhance efficiency, efficacy and allow the IN to reap the benefits which this technology has to offer.

  • Pilot Testing. A selected area from the above mentioned domains/ systems offering flexibility and learning opportunities, can be used for pilot testing. The operation will offer insight into the problems with integrating blockchain into existing naval networks and would also bring out the deficiency in system hardware and software configuration. The advantages assessed can be used to predict the nature of this tech in other fields. This in turn will serve as a guide for identifying the hardware and the software requirements for the induction of blockchain technology, its application and the goals to be achieved. A pool of personnel trained in this tech will also be required to be appointed at its various nodes.

  • Partnership with Blockchain and AI Firms. The more efficient and expeditious way to integrate blockchain into the Navy can be pursued by partnering with the private sector industry leaders offering state-of-the-art services such as Tata Consultancy Services, Tech Mahindra, Infosys, Zensar Tech etc. Also, partnerships with leading Higher Education Institutions in technology such as IITs can be beneficial for making headway and supporting the road map for induction of this technology.

  • Conceptualisation at Fleet and Flotilla Level. A detailed study into the Cost-Benefit analysis of implementing blockchain technology in the fleet and flotilla, and the advantages gained in terms of battlefield superiority will offer a clear understanding of its intrinsic value. The known benefits in terms of ordnance delivery, tracking, electronic warfare, MDA, sensitive data handling, logistics benefits, etc. have been discussed and will certainly offer us an edge over the enemy.

  • Implementation at Material Organisations. The benefits of implementing the technology in logistics have been discussed earlier. Larger organisations such as Material Organisations, Naval Armament Depots and other contractual offices will benefit from accurate information of products, parts, handling and even real-time tracking data. This information will not only facilitate better and more efficient stocking but will also help in autonomous operations in terms of placing demands and supply chain cycles when integrated with AI. The expertise gained from these organisations will help the IN to proceed with implementation in other diverse areas/operations.

  • Blockchain Education. Blockchain courses are fast becoming a first choice of major engineering and technical courses in the civil world. With the INs policy of BTech qualification becoming compulsory for executive branch officers, it becomes imperative that blockchain is introduced in the syllabus at our training and professional military education institutions.

Conclusion

Blockchain can be seen as enabling machinery with a distributed ledger that allows for the integration of technologies and workflows that have not been possible before. The need to understand its radical transformation in the digital field cannot be over-emphasized. India is in an advantageous position with a very high number of tech graduates and field experts which can propel India in becoming a major hub of this technology. Programmes like Digital India and Atmanirbhar Bharat are steps in the right direction.

Policy shifts of the Indian armed forces towards modernisation and technology infusion are reassuring. However, passage towards an agile defence innovation ecosystem is difficult and needs to be more reactive and welcoming to testing and induction of emerging technology and trends. The Navy should move swiftly and develop innovative ways in which it can modernize naval warfare and other issues using blockchain fundamentals in order to be ready and prepared for future battlefields.

Endnotes

  1. “Chinese President Xi Jinping: Blockchain Reshaping Global Economic Structure,” CNN, 04 March 2021. https://www.ccn.com/chinese-president-xi-blockchain-breakthrough-is-reshaping-global-economic-structu re/, accessed 20 October 2022.

  1. Sumit Arora, “PM Modi Unveiled Atal Bihari Vajpayee Statue in Lucknow,” Current Affairs, 26 December 2019. https://www.currentaffairs.adda247.com/modi-iit-lucknow, accessed 22 October 2022.

  1. “Ledgers Over the Years - From Ancient Egypt to Blockchain, DAG and Beyond,” COTI, 11 February 2018. https://cotinetwork.medium.com/ledgers-over-the-years, accessed 22 October 2022.

  1. “What is Blockchain?” Euromoney. https://www.euromoney.com/what-is-blockchain, accessed 20 October 2022.

  2. Stuart Haber and W Scott Stornetta, “How to Time-Stamp a Digital Document,” Journal of Cryptology no. 3 (1991, Januray), 99-111. https://doi.org/10.1007/BF00196791, accessed 01 November 2022.

  1. Blockstreet HQ Team, “Before Blockchain, There was Distributed Ledger Technology,” Medium, 06 September 2018. https://medium.com/blockstreethq/before-blockchain-there-was- distributed- ledger-technology-319d0295f011, accessed 20 October 2022.

  1. Department of Defence, United States of America, Potential Uses of Blockchain by the U.S. Department of Defense, March 2020.

  2. Y Zhu et al., “A Study of Blockchain Technology Development and Military Application Prospects,”Journal of Physics: Conference Series, The 2020 Spring International Conference on Defence Technology (2020). doi:10.1088/1742- 6596/1507/5/052018.

  3. Yu MY et al. “Logistics Sci-Tech,” 2018.

  4. Zhu, Op Cit., n. 11.

  5. Muyao Shen, “The Russian Military is Building a Blockchain Research Lab : The Russian Ministry of Defense is Launching a Blockchain Research Lab to Examine How to Combat Cybersecurity Threats,” CoinDesk, 02 July 2018. https://www.coindesk.com/the-russian-military-is-building-a-blockchain- research-lab, accessed 20 November 2022.

  6. https://satander.globaltech.com/, accessed 28 November 2022.

  7. Zhu, Op Cit., n. 11.

  8. Muyao Shen, “The Russian Military is Building a Blockchain Research Lab : The Russian Ministry of Defense is Launching a Blockchain Research Lab to Examine How to Combat Cybersecurity Threats,” CoinDesk, 02 July 2018. https://www.coindesk.com/the-russian-military-is-building-a-blockchain- research-lab, accessed 20 November 2022.

  9. https://satander.globaltech.com/, accessed 28 November 2022.