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U.S. Department of Homeland Security funds four blockchain companies developing new cyber security technology

The U.S. Department of Homeland Security, Science and Technology Directorate, recently unveiled a list of 13 small businesses working towards “the development of new cyber security technology.” The companies are part of the 2016 Small Business Innovation Research program.  Each was awarded approximately $100,000 in funding, for a total of $1.3 million, and four are using blockchains in their product.

The U.S. Department of Homeland Security, Science and Technology Directorate, recently unveiled a list of 13 small businesses working towards “the development of new cyber security technology.” The companies are part of the 2016 Small Business Innovation Research program.  Each was awarded approximately $100,000 in funding, for a total of $1.3 million, and four are using blockchains in their product.

The Department of Homeland Security was formed in the wake of the terrorist attacks of September 11, 2001, as part of a determined national effort to safeguard the United States against terrorism. The Department became the third-largest federal department, bringing together 22 different federal agencies, each with a role in this effort.

The Science and Technology Directorate (S&T) aims to deliver effective and innovative insight, methods and solutions for the critical needs of Homeland Security. Created by Congress in 2003, S&T monitors rapidly evolving technology and threats, while capitalizing on technological advancements, developing solutions and bridging capability gaps.

The Small Business Innovation Research Program is a congressionally mandated small business set-aside, and one of the largest public–private partnerships in the United States. Federal agencies with extramural research and development (R&D) budgets that exceed $100 million are required to allocate 2.8 percent of their R&D budget to these programs. Currently, eleven Federal agencies participate in the SBIR program.

The S&T initiated its SBIR program in 2004, with a focus on “near-term commercialization and delivery of operational prototypes to federal, state and local emergency responders and managers, as well as internal DHS entities,” according to their website.

“The Program has resulted in 70,000 issued patents, close to 700 public companies, and approximately $41 billion in venture capital investments.”
— – Small Business Innovation Research

The SBIR proposal solicitation, released in December 2015, included four topics developed by Cyber Security Division program managers to address the research and development needs of DHS components and the homeland security enterprise.

The topics were developed by S&T’s Cyber Security Division (CSD) which was formally established in 2011. “CSD leads the federal government’s efforts in funding cybersecurity research and development projects that result in transforming an idea to a deployable solution,” states the Division.

One of the four topics focused on blockchain techonlogy, “Applicability of Blockchain Technology to Privacy Respecting Identity Management.” According to the S&T announcement, the goal of this topic is to use blockchain technology, “which centralizes and validates new entries added into an existing data field to support identity verification.”

Four small businesses, all existing blockchain-focused companies in the U.S., were awarded funding in this category.

Virginia-based blockchain startup Digital Bazaar Inc. has only nine employees, and was awarded $99,512.89. The small tech business is working on developing a “Linked Data ledger format and architecture to demonstrate how to publish identity credentials,” the DHS wrote in the press release. In the proposal to the DHS, Digital Bazaar proposes an architecture that “would enable ledgers to provide independently, cryptographically verifiable credentials with flexible semantics.”

“We will study the feasibility of this concept by building a proof-of-concept Linked Data ledger format and architecture. We intend to configure this architecture to demonstrate how to publish credentials (aka verifiable attributes) to address specific DHS use cases and to commercialize the created technology.”
— – Digital Bazaar

The next business awarded was a smaller, Seattle-based company, with only three employees. Respect Network Corporation received $97,370.00 to develop “a decentralized registry and discovery service to integrate with the public blockchain,” according to the DHS.

“Respect Network will research and develop a decentralized registry and discovery service for Decentralized Identifiers (DIDs) to integrate with the public blockchain,” states the Respect Network Corporation. “DIDs will allow principals to directly control their own identities with cryptographic proofs and secure, addressable network endpoints. DIDs will enable a Decentralized Identity Management (DIDM) infrastructure.”

Based in Washington D.C. with five employees, Narf Industries LLC, was awarded $99,836.80. The global information security company is working to achieve an identity management solution built on a permissionless blockchain. The benefits of doing so are confidentiality with selective information disclosure, integrity, availability, non-DHS repudiation, provenance, and pseudo-anonymity.

“Commercial applications include, but are not limited to: scalable single sign on between federated entities, tracking credit worthiness via selective disclosure of attributes to approved creditors, and information escrow governed by autonomous contracts.”
— – Narf Industries

The final blockchain startup is Virginia-based Celerity Government Solutions, LLC, trading as Xcelerate Solutions. The much larger startup has 128 employees, and received $99,000. The company provides IT management, IT consulting services, and  security of IT systems as well.

In addition to working with the DHS, the company has worked with various U.S government departments including the Navy, the Air Force, the Army Joint Staff, and the FBI.

With the funding from the DHS S&T, Celerity Government Solutions is researching blockchain solutions “to enable users to establish and maintain trusted identity transactions with public and private organizations,” according to their announcement.

“Our solution will enable users to develop an immutable identity transaction history, including verified identity information, to be used as inputs to determine trust confidence levels based on past transaction history.”
— – Celerity Government Solutions

After November, each of the small businesses may be eligible for further funding. All funding decisions will be “based on their initial project results as well as its scientific and technical merit and perceived commercialization potential,” according to the DHS.

The DHS S&T previously awarded $199,000 to Factom Inc., in a separate endeavour last June, "to advance the security of digital identity for Internet of Things (IoT) devices." The project, “Blockchain Software to Prove Integrity of Captured Data From Border Devices,” uses Factom’s identity database for devices to keep an updated list of relevant info, such as make, model, manufacturer, updates available, and known issues.

The data will be timestamped for security, and hackers will find it nearly impossible to corrupt past device records. The process aims to make spoofing, or making yourself look like your mark to other people, a thing of the past.

A recent bitcoin auction of the stolen NSA cyber weapons is the perfect reminder of the high-stakes that the DHS is dealing with, prompting this initiative.


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