#EUBlockchain

Dear blockchain enthusiasts,

In this newsflash, you will read about EBSI at the European Blockchain Convention and updates on the Digital Europe Programme.

Please contact us if you have any questions, comments or suggestions for future content.

EBSI Team

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EBSI featured in #ebcTALKS on "The Benefits of Blockchain in Government and the Public Sector"

On 7 October 2021, the European Blockchain Convention held its sixth conference on the blockchain industry in Europe. This event brought together experts and professionals from across the globe to discuss blockchain, crypto and NFTs ecosystem in Europe.

Joao Rodrigues Frade, Head of Sector of the European Commission's Digital Building Blocks spoke about the benefits of blockchain in governments and the public sector. He further explained the role of Verifiable Credentials and its efficiency in verifying documents.

Missed the presentation? Check out the recording here.

On 20 October 2021, the Digital Europe Programme (DIGITAL) committee endorsed the Work Programme for 2021-2022, opening the way to its formal adoption during the first half of November 2021. DIGITAL is a new EU funding programme focused on bringing digital technology to businesses, citizens and public administrations.

DIGITAL will significantly reinforce resources allocated to the EBSI initiative. The Commission's Directorate-General for Communications, Networks, Content and Technology along with the European Health and Digital Executive Agency will launch a call for proposals aiming at co-financing the utilisation of EBSI in February 2022 (TBC).

DIGITAL with a total budget of €7.6 billion will also provide funding to other digital activities. In particular, investments in Advanced Digital Skills will be supported by the Programme with €580 million over the course of seven years. Calls for proposals for the Advanced Digital Skills should already be launched by mid-November 2021. You can learn more about the DIGITAL funding for Advanced Digital Skills here.

On 12 October 2021, EBSI released v2.00-rc.7 to the pre-production environment. This version includes upgrades to the core services and smart contracts. The technical office is advancing on a number of key documents for EBSI use cases, including guidelines and new priority capabilities, such as smart contracts, JSON LD context definition, revocation, etc. The team is also working on a detailed wallet conformance testing process, which will soon be available to wallet providers. The goal is to test the first wallets by the end of November 2021.

The DevOps, security experts and architects have been progressing on the hardening of the infrastructure by using the iterative approach. During the first iteration of the penetration testing, they fixed any identified deviations. During the second iteration, the openscap benchmarks will be refined and run against EBSI nodes once all the deviations have been identified and fixed. The team expects that this iterative approach will make the infrastructure more robust. The technical office will make specific security benchmarks and tools available to node operators once the iterations are finalised.

• 23-24 November 2021: Blockchain Expo Europe - This event will be an interactive panel discussion along with expert keynotes and solution-based case studies. This event aims to explore the key industries that are set to be disrupted the most by blockchain.
• 26 November 2021: Reconnaissance du diplôme et apostille (French only) - This webinar will introduce us to the challenges that come with the diploma recognition in France and abroad. The main questions concerning translation of diplomas in the European and international context will be discussed as well.
• 13-16 December 2021: European Blockchain Convention - This four-day virtual event will be filled with keynotes, panel discussions, workshops, one-to-one meetings and high-level networking. Among the participants, you can meet 2500+ entrepreneurs, investors, corporations, developers and tech leaders from the Blockchain industry. You can save 20% with the code EUCOMISSIONEBC. This is only valid until 30 October, so don't miss the chance!
• 17 December 2021: Obligation du supplément au diplôme, Europass et le RNCP (French only) - This webinar will show us the necessary elements to understand the concept of Diploma Supplement and its integration in the professional career. The added value of blockchain in the context of issuance of diplomas will be discussed as well.

Does crypto-mining have a "greener" future?

Cryptocurrency mining or crypto-mining can be described as the process in which transaction records between users are verified and added into the blockchain public ledger. The process of mining, which is used in Proof-of-Work (PoW)* consensus mechanism*, introduces new coins into the existing circulating supply. Mining is also one of the key elements that allows cryptocurrencies to work as a peer-to-peer decentralised network, without the need for a third party central authority. However, the mining process requires great energy supplies as it needs powerful machines in order to process transactions, leading to vast electricity consumption and high carbon footprint.

A recurrent question in the cryptocurrency world is how can we make cryptocurrencies’ mining more sustainable. El Salvador, also known as the "land of volcanos", has recently taken part in finding a solution to this question. As the first step, in September 2021, El Salvador made history by becoming the first country to make Bitcoin as legal tender, thus making it as their official state currency. The second step is to make crypto mining “greener". To achieve this, El Salvador has decided to use geothermal energy coming from volcanoes to mine Bitcoin, demonstrating that cryptocurrencies can act as an accelerator to sustainable energy development.

Since the beginning of October 2021, El Salvador has mined 0.00599179 of Bitcoin, an equivalent of around €230 with power harnessed from a volcano. The mining project is still a work in progress and El Salvador’s President Bukele indicated that they are still in the process of testing and installing the new mining equipment. El Salvador has a great potential in this project. Still, it is important to keep in mind that the idea to use geothermal energy from volcanoes has already been implemented in other countries, like Iceland, before.

For countries with no volcanoes, there is a need to look for other solutions. One of them would be to opt for other consensus mechanisms, such as Proof-of-Stake (PoS)* or Proof-of-Authority (PoA)*, which revolve around actual validators instead of miners and require little to no computing power. EBSI uses the PoA consensus mechanism to build a blockchain infrastructure that will be serving the needs of millions of Europeans in the future. EBSI is as an excellent example of green energy consumption of blockchain and is fully aligned with the objectives of the European Green Deal.

Consensus mechanisms

A consensus mechanism is a mechanism used in distributed systems (networks of computers) to achieve the needed agreement to work together and stay secure.

Proof-of-Work (PoW)

Proof-of-Work is a consensus mechanism that ties mining capability to computational power. In the case of blockchain, blocks must be hashed, which is in itself an easy computational process, but an additional variable is added to the hashing process to make it more difficult (a "nounce"). This process takes time and computational effort (by the "miner"). These two components provide a certain monetary value to the block and the miner is therefore rewarded. This is why a hashed block is considered proof of work. The main goal of a PoW system is to deter cyber-attacks such as a distributed denial-of-service attack (DDoS) which has the purpose of exhausting the resources of a computer system by sending multiple fake requests.

Proof-of-Stake (PoS)

Proof-of-Stake consensus mechanism has the same overall process and goal as Proof-of-Work, the method to reach that goal is however entirely different. Miners are replaced by validators that lock some of their assets as a stake in the ecosystem. Following that, the creator of the next block is chosen via different combinations of random selection, based on the staked amount or the time the amount has been staked. When blocks gets added to the chain, validators get a block reward in proportion to their stake.

Proof-of-Authority (PoA)

Proof-of-Authority (PoA) is a modified form of Proof of Stake (PoS), where transactions and blocks are validated by approved accounts, also known as validators (these approved nodes must pass a preliminary authentication). Instead of using a stake with monetary value, the validator's identity performs the role of stake. The process is automated and does not require validators to constantly monitor their computers, the node must however be kept uncompromised. The chain has to be signed off by the majority of authorities, in which case it becomes a part of the permanent record. This makes it easier to maintain a private chain and keep the block issuers accountable.

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