Recently there have been multiple writings about the X-Road which have stated that X-Road is a blockchain based technology or it utilizes blockchain internally. Are these claims true, is X-Road based on blockchain? Let’s take a look at the facts.
Blockchain
Blockchain is one of this year’s buzzwords and one of the hottest technologies out there. Blockchain became known as the technology behind bitcoin – the first cryptocurrency launched in 2009. Since then its use has expanded to cover many different business areas and use cases in addition to cryptocurrencies.
Blockchain is a distributed, decentralized and public database that stores transactions in a chain that protects them against alterations and ensures data integrity. Blockchain is a peer-to-peer network where all the nodes are equal and every node has a full copy of the blockchain. The data stored in a blockchain cannot be altered afterwards without altering all the subsequent blocks and replicating the changes to all the nodes of the network. This makes tampering the data stored in a blockchain extremely difficult.
Transaction data is stored in blocks in the form of a Merkle tree. Consecutive blocks are linked to each other so that together they form a chain. Each block contains the cryptographic hash of the preceding block in the chain which makes it possible to verify the order and the integrity of the blocks from the previous block till the very first block of the chain, the genesis block. This makes it possible to audit and verify all the transactions in the chain.
Blockchain does not have a central authority so the nodes need to come to a consensus before a new block can be added to the chain. This is achieved by using a consensus protocol or consensus mechanism. The most common consensus mechanisms are called Proof of Work (PoW) and Proof of Stake (PoS).
X-Road
X-Road is an open source data exchange layer solution that enables organizations to exchange information over the Internet. X-Road is a centrally managed distributed integration layer between Information Systems that provides a standardized and secure way to produce and consume services. X-Road ensures confidentiality, integrity and interoperability between data exchange parties.
The identity of the service producers (i.e. base registries) and consumers (i.e. web portals) is maintained centrally by the X-Road operator and all the data is exchanged directly between the data consumer and provider. All the evidence regarding the data exchange is stored locally by the data exchange parties, and no third parties have access to the data. Time-stamping and digital signature together guarantee non-repudiation of the data sent via X-Road.
X-Road supports batch signatures and batch time-stamping. Batch signatures are created for messages that contain attachments. Batch time-stamping means that time-stamps are created asynchronously in batches for all the messages that have been processed since the last batch time-stamping. Batch time-stamping is used for reducing the load of time-stamping service. Both these features are based on Merkle hash trees and the messages processed during a single batch are linked to each other through a hash chain. Using the hash chain it is then possible to verify that a selected message is a part of a certain batch signature. However, there is no link between different batches and messages in them so there’s no chain that would link all the batch processed messages together.
The security server stores all the processed messages with their signatures and time-stamps in the message log database. The log records are archived to disk regularly and removed from the database after that. In the message log archive file each message has a cryptographic hash that depends on the previous message that was archived and the chain continues over different archive files. In this way the message log archive files create a chain that contains all the messages processed on a single Security Server. This means that the messages stored in the message log archive files cannot be modified without breaking the chain.
Is X-Road based on blockchain?
Blockchain is a decentralized and distributed database which is updated through a consensus protocol. All the nodes of the network are equal and every node has a full copy of the database. The blocks stored in the database are linked to each other using cryptographic hash functions.
The X-Road Security Server message log archive files contain all the messages processed by a single Security Server. Messages included in the files are linked to each other using cryptographic hash functions. The files are stored locally and the server hosting the files is responsible for creating them. Each Security Server has its own unique chain of processed messages. Other members of the X-Road ecosystem do not have access to the files.
The common factor between blockchain and X-Road is that they both use cryptographic hash functions for linking data items to each other. Besides that there are very few common factors between the two as they serve very different purposes and use cases. Cryptographic hash functions existed well before blockchain so even if the both blockchain and X-Road use them does not mean that X-Road is based on blockchain. Both bicycle and car have wheels, but we don’t say that car is based on bicycle just because the bicycle was the first one to use wheels. The same goes with blockchain and X-Road.
Based on the arguments presented above the outcome is that X-Road is not based on blockchain and does not use it internally.