Blockchain technology serves as a fundamental technology for sharing data and exchanging value among people and society. In this proposal we identify issues for basic research and application development, and propose strategies for technology development toward the secure and trustworthy social infrastructure.

Blockchain is a form of distributed ledger in which blocks of data are "chained" consecutively in a network. In 2008 a paper written by Satoshi Nakamoto gave rise to Bitcoin, the first implementation of Blockchain. The following year he released an open source of Bitcoin, which has been in operation for more than 10 years to date. Technologies used in Bitcoin, such as cryptography, P2P networks and distributed systems, the mechanism of incentives for distributed consensus building, and continuous operation are not particularly new. These technologies which enabled Bitcoin are collectively referred to "Blockchain technology", especially the first generation blockchain technology in this proposal.

The success of Bitcoin has revealed that cryptographic proof of trust allows direct transactions between parties on the Internet without trusted third parties. Blockchain, the core technology of Bitcoin, has attractive functions and features such as distributed ledger, immutability, traceability, distributed consensus mechanism, and transaction functions. For this reason, expectations as general-purpose technology applicable to other than crypto-assets have increased, and emerging blockchain technology have been researched and implemented. Moreover, Blockchain itself is evolving by introducing new technology. One example is smart contract, which is a program incorporated in transaction data to enable exchange various values automatically. Another is a second layer technology which accelerates transaction speed much faster than Bitcoin which intentionally processes only about several transactions per second due to its design philosophy. These extensions to the first generation lead the Blockchain to the second generation. We are now still at this stage. Accordingly, the various demonstration experiments and platforms conducted around the world are mainly based on this stage of technology.

We believe the basic research and application development to establish secure and trustworthy infrastructures for data-sharing and value-exchange among people and society. To this end, there lies a wide variety of issues to be solved from basic research to application development such as securing scalability with the expansion of use of data, handling personal data that should not be disclosed, supporting cryptography in the quantum computer era and so on, as well as re-designing business practices and systems corresponding to completely new technology.

In this proposal we position the blockchain technology as "a fundamental technology for safely and reliably realizing the sharing of important personal and social data and the exchange of value." While the Internet is the basis for information exchange, the Blockchain will be the basis for value exchange. However, current blockchain technology is as immature as the dawning of Internet in senses both fundamental and application technology. The reasons can be summarized as follows: engineering is ahead and basic research is not keeping up; applications other than cryptocurrency are under development; and research community is dispersed in silos.

The blockchain technology stack is shown in the figure. The foundation stack contains technologies on which the blockchain rely such as encryption technology, P2P network technology, and system management. On top of it lays the blockchain core technology that make blockchain itself, including technologies related to distributed ledgers, distributed consensus building, and smart contracts. There are also platforms and institutional designs as execution environments for efficiently realizing applications using these technologies.

We propose that the nation should promote as national projects 1) to establish Blockchain technology foundation through research and development, 2) to apply to the national social infrastructure, and 3) to initiate forum activity for continuous discussions regarding the social visionaries and impacts of the future.

• (1) Establish Blockchain technology foundation through research and development

  It is vital to promote curiosity driven basic research and to build an incubation platform where researchers gather in order to create a wide variety of research results and foster new research communities. This breaks the situation where engineering is ahead of basic research as well as the research community is dispersed in silos.

• (2) Apply blockchain to the national social infrastructure

  By establishing Japan's national social infrastructure using Blockchain, it is possible to realize a safe, transparent, and efficient next-generation digital government ahead of the rest of the world as part of the realization of "Society 5.0", the future social image that Japan aims for. To do so, first, we need the grand design of the next generation digital government, especially data strategy is critical. Then the data exchange infrastructure based on blockchain is to be built and applied to the national social infrastructure.

  Applications that link digital government services and private services will be developed in some specific test areas. However, seeing the case of Estonia, rebuilding the social infrastructure takes a long time. Strong will of the government is crucial for its realization. Discussions on digital government have already begun in Japan regardless of emerging technology such as Blockchain. It is important to take technical discussion into consideration. In addition, it is necessary to simultaneously build a body of knowledge for utilizing the national social infrastructure and strategically develop human resources.

• (3) Initiate forum activity for continuous discussions

  Given the potential innovations of blockchain technology, there is a need for discussions similar to that for the human and social impact of artificial intelligence. Regular workshops and seminars to publish high-quality reports and recommendations, with the opportunity to discuss the essential insights of blockchain technology (e.g., realizing value and avoiding risks) are crucial.

The Internet has transformed society and the way people live accordingly. By connecting computers and devices around the world digitally, it has become the "information exchange platform" that allows anyone to easily send, receive, search and use information. Blockchain, on the other hand, will provide the basis for ensuring the authenticity of data and making it easy to share and exchange values. This could be the "trustworthy platform" that anyone can trust the information on the blockchain based infrastructure.

However, in order to reach that point, intensive discussion should be continued regarding how social systems can make full use of the potential of blockchain, while conducting R&D and proof of concept experiments with the cooperation of Social Science and Humanity. It is also imperative that Blockchain-related communities work together from global and long-term perspective, as were done to foster the Internet by all around the world from its dawn. Fortunately, there is no champion like GAFA so far. There are both significance and opportunities for Japan to lead the world. This proposal was written for "The Blockchain" with such thoughts in mind.