Posted: 12 May 2022 10 min. read

Blockchain and quantum technologies: Driving the future of digital trust

A blog post by Diana Kearns-Manolatos, senior manager, Center for Integrated Research, Deloitte Services LP and Jay Parekh, senior analyst, Center for Integrated Research, Deloitte SVCS India Pvt Ltd. Saurabh Rijhwani, assistant manager, Center for Integrated Research, Deloitte SVCS India Pvt Ltd.

 

Digital trust has increasingly become a necessity in today’s global economy, reliant on ever-increasing connectivity, data use, and new innovative technologies. Embedding trust by ensuring security, confidentiality, and integrity of an organization’s data requires responsible use of technology and prioritizing cybersecurity. However, choosing the right tools can be challenging due to rapid technological innovation and the large number of available options. To help businesses make smart choices when it comes to improving digital trust, Deloitte’s research explores how these advanced solutions can help organizations meet their unique digital trust needs with a focus on tomorrow’s next horizon: digital infrastructures.

Deloitte interviewed global subject-matter specialists, analyzed emerging technology digital trust–related patents granted over the past five to six years (figure 1), and found two critical platform and computation technologies integral to future digital strategies that will have implications on digital trust: blockchain and quantum technologies. Blockchain is considered the trust infrastructure of tomorrow and has seen an almost 200% year-over-year increase over the past three years. This indicates that blockchain may have promising growth potential as an increasingly viable digital trust solution—but has not yet reached peak maturity. Additionally, quantum technologies while early in their digital trust patent innovation curve could introduce new threats as well as quantum-based countermeasures.

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Blockchain

Often referred to as a trust-less solution, blockchain provides a mechanism to trust individuals, organizations, and contractual details through an independently verifiable, immutable, and trusted database or ledger. This can reduce the need for trusted third parties as organizations trust the technology instead. Uniform, continually auditable systems could eventually replace the current patchwork of separate systems—streamlining permissions, security, and privacy. Digital fingerprinting, digital identity, digital assets, and smart contracts are some of the foundational capabilities of blockchain (figure 2) and are intertwined to provide a robust framework for trusted relationships.

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Blockchain can help maintain a trusted record of transactions. By tracking data and its fingerprint, stakeholders gain greater transparency and can easily establish data authenticity and integrity. There is a gradual increase in adoption of blockchain-based systems that can track products and corresponding information across complex global supply chains.

Blockchain can help with trusted identities. This is a key component when it comes to any digital relationship or transaction. Blockchain can verify credentials without revealing details behind that identity and enables decentralized, tamper-proof self-sovereign identities, which can be used for various commercial and government services.

Blockchain can establish asset ownership. Digital assets, especially cryptocurrencies, comprise a use case currently adopted at scale. According to Deloitte’s 2021 Global Blockchain survey, around 40% of respondents say digital assets will have a significantly positive impact on improving compliance and transparency, reducing risk, and enhancing trust. Non-fungible tokens (NFTs)— unique, non-interchangeable data units stored on a blockchain—are emerging as a viable solution to authenticate and certify ownership of digital assets.

Lastly, blockchain-based smart contracts can enable faster legal agreements and automate trust. They can help parties agree on terms and transact without any third-party intermediary or escrow, and trust that they will be executed automatically with reduced risk of error or manipulation.

While there are technical restraints to be sure, ongoing rapid innovation and increasing maturity and understanding among stakeholders suggest that we can expect many of these limitations to be addressed in the coming years, resulting in a transformative change to digital trust. Hence, organizations should begin understanding this upcoming digital infrastructure now to incubate future solutions.

Quantum technologies

Quantum technologies are fast evolving and bring both threats and opportunities related to digital trust. On one hand it unleashes exponentially higher compute power that enables applications previously unimaginable, but this computation power could also make today’s internet vulnerable to tomorrow’s quantum hackers. While it will be difficult to accurately predict when such a scenario could unfold, it’s important that leaders gain awareness and begin to prepare as early as possible. As organizations look to get more up to speed on the impacts of quantum and where and how it impacts digital trust, they can focus on three key areas.

Quantum computing analytics and the impacts on cyber and data privacy 

  • The immense computing power that quantum computers promise can help to sort and understand large sets of data, including the ability to perform vast analytics on cyber and privacy data to detect anomalous or suspicious behavior and improve cyber risk management.

Quantum principles for cryptographic key generation and distribution 

  • Quantum principles can potentially enhance data-encryption systems, using methods such as quantum key distribution (QKD). QKD uses quantum mechanics to distribute encryption keys between two parties. Due to the inherent tamper-evident properties of quantum physics, any attempt to eavesdrop the keys would be detected. But QKD technology has some limitations, including complex processes, oversized special equipment, and high costs. The fragile state of quantum particles involved can significantly limit its coverage and reach.

Shor’s algorithm and the impact on common encryption techniques 

  • Shor’s algorithm could render today’s encryption techniques easy to crack, making data and transactions more vulnerable. While the full use of Shor’s algorithm using quantum computing is easily more than a decade away, preparing countermeasures is easily a decade’s worth of work as well. This hinges on organization’s advancing postquantum cryptography (PQC). PQC are “quantum-resistant” encryption techniques that run on traditional computers and rely on complex mathematical problems believed to be unsolvable by quantum computers. PQC is expected to be interoperable with current communication protocols and networks, making it more cost-effective, agile, and easier to maintain.

Organizations should keep a pulse on quantum technology and the related cryptography landscape and ensure timely technology and talent investment for developing the needed crypto-agility and infrastructure.

The road ahead

While there is no single solution to solve the digital trust puzzle, blockchain and quantum technologies are some of the solutions that can play a valuable role in the coming years. How might these digital trust tech approaches protect you? Consider the danger that deepfakes pose to organizations. Let’s say you’ve been targeted by bad actors who pose as your company’s CEO and attempt a false transaction or data breach. A robust blockchain-based solution could help easily verify the transaction details and establish fail-safe mechanisms within a smart contract. And, if your organization someday implements quantum-resistant safeguards within network and communications channels, other organizations can have much stronger confidence in the integrity of your data and transactions. If you are looking for your organization to be future ready in the digital trust space, now is the time to go ahead and invest and implement in these technologies.

To know more about blockchain and quantum technologies for digital trust, and what solutions organizations can consider implementing today, check out our recent Deloitte Insights articleEarning digital trust: Where to invest today and tomorrow.

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David Linthicum

David Linthicum

Managing Director | Chief Cloud Strategy Officer

As the chief cloud strategy officer for Deloitte Consulting LLP, David is responsible for building innovative technologies that help clients operate more efficiently while delivering strategies that enable them to disrupt their markets. David is widely respected as a visionary in cloud computing—he was recently named the number one cloud influencer in a report by Apollo Research. For more than 20 years, he has inspired corporations and start-ups to innovate and use resources more productively. As the author of more than 13 books and 5,000 articles, David’s thought leadership has appeared in InfoWorld, Wall Street Journal, Forbes, NPR, Gigaom, and Lynda.com. Prior to joining Deloitte, David served as senior vice president at Cloud Technology Partners, where he grew the practice into a major force in the cloud computing market. Previously, he led Blue Mountain Labs, helping organizations find value in cloud and other emerging technologies. He is a graduate of George Mason University.