All products, digital and physical, pass through a supply chain—a network of actors that supports their life cycle. But as the global market becomes increasingly interconnected, supply chain attacks are on the rise.
In March 2023, cybercriminals infiltrated 3CX’s build environment, injecting malicious code into a library file for its macOS and Windows desktop apps. The compromised file was distributed through official updates, exposing users to malware. This breach emphasized the shortcomings of centralized systems in securing supply chains, as a single compromised vendor can jeopardize the privacy of the entire customer base.
Web3 supply chains, leveraging blockchain and Decentralized Public Key Infrastructure (DPKI), offer a robust alternative. By prioritizing transparency, traceability, and tamper-proof security, they present a stronger defense against supply chain threats.
This article explores how DPKI in blockchain-driven networks outperforms traditional PKI, and why a supply chain powered by the latter presents a tougher nut for bad actors to crack.
Understanding Public-Key Infrastructure (PKI)
What is PKI?
IBM defines ‘Public-Key Infrastructure (PKI)’ as a comprehensive framework used to assign and verify user identity through digital certificates, for secure digital communications. The entire PKI framework relies on asymmetric cryptography- the use of a public and private key pair to encrypt and decrypt data, respectively.
PKI allows us to associate identities with particular key pairs. Although the public key can be visible to anyone on the network, only the entity with the corresponding private key can access specific features or information.
In a supply chain, PKI combines digital certificates and asymmetric cryptography to establish trust and ensure integrity. The public keys are embedded in a digital certificate, which authenticates the user or device communicating across the network.
Key Components of a Public-Key Infrastructure
-
Certificate Authority (CA): The Certificate Authority is a trusted entity that issues digital certificates to participants in the supply chain, e.g., developers, analytics providers, payment gateways, cloud providers, etc.
-
Certificate: Digital certificates are cryptographic credentials, issued and signed by the CA, used to verify the identity of and secure communication among supply chain actors. They typically include public keys and identity details, accessible upon request.
-
Registration Authority (RA): The RA ensures that only authorized participants can obtain a digital certificate, thus enhancing security within the supply chain. The CA can double as the registration authority, although trusted third-party services are just as efficient.
-
Certificate database: This PKI component is a secure repository or location that stores issued digital certificates, alongside their metadata, i.e., public keys, revocation status, and validity details.
-
Certificate policy: This is a formal document outlining the procedures and requirements governing the issuance, usage and management of digital certificates within the supply chain.
-
Central directory: The central directory is a public repository where cryptographic keys, digital certificates and Certificate Revocation Lists(CRLs) are indexed and stored. It enables anyone in the ecosystem to authenticate a digital signature and encrypt data to a specific key owner.
Traditional Supply Chain Systems (Web2) vs. Web3-Driven Supply Chains
Web2-based supply chains are centralized; participants rely on Certificate Authorities to verify other actors and establish trust. Moreover, digital certificates and cryptographic keys are stored in central directories, leaving room for supply chain attacks in the absence of robust security measures.
Another feature of Web2-based supply chains is the opacity around certificate issuance and revocation. There’s no universal metric to determine eligibility for certificate issuance. Instead, entities must operate on a trust assumption that the CA has properly vetted the requester.
Oftentimes, delayed updates and limited visibility associated with Certificate Revocation Lists (CRLs) may result in revoked certificates appearing valid to related devices or applications. This can impact supply chain integrity, due to unauthorized access, tampered goods, compliance issues and a loss of trust.
Instance: In 2024, Google delisted Entrust (a formerly reputable Certificate Authority), from its Chrome Root Program due to malfunctions in its certificate issuance and revocation operations. A few months prior, Entrust admitted to misissuing over 26,000 digital certificates and failing to revoke them within the revocation timeline outlined by the Certificate Authority/Browser Forum.
Web3-driven supply chains, on the other hand, leverage decentralized systems, smart contracts, and pseudonymous transactions to create a trustless, transparent, and secure ecosystem. Unlike traditional supply chains that rely on centralized authorities, Web3 enables each participant to interact directly on a shared blockchain, reducing intermediaries and single points of failure.
In addition, PKI data (i.e. public keys and certificates) is stored immutably on a blockchain, making them nearly tamper-proof, while being easily accessible for verification. Together, these features make Web3 supply chains more resilient and trustworthy than ttheir raditional counterparts.
From PKI to DPKI: Strengthening Supply Chain Integrity in Web3
In Web3-driven systems, PKI implementation shifts from traditional Certificate Authorities (CAs) to decentralized or distributed models that align with Web3 principles, hence the term—Decentralized Public-Key Infrastructure (DPKI).
The idea behind it is simple: enable tamper-proof verification of supply chain data and participants, without relying on a centralized database.
Here’s how DPKI enhances supply chain integrity in a Web3 ecosystem:
- Decentralized trust models manage authentication and verification
Rather than a centralized entity, DPKI relies on a web of trust—a network of on-chain participants who collectively verify and authenticate information. Each supplier on-chain uses a decentralized identifier (DID), which functions as a unique digital signature, to prove authenticity, access data and sign transactions.
Vendors interacting in a decentralized supply network use their DIDs to access proprietary data, verify purchase orders, and access secure channels. Similarly, a product within the chain can be assigned a DID, enabling participants to verify its origin and authenticity at every step.
- Smart contracts ensure transparency and data integrity
Smart contracts are self-executing programs stored on a blockchain that automatically trigger specific actions once preset conditions are met. They automate various processes within a supply chain, such as processing payments, issuing tickets, or approving shipments. All interactions with the contract are recorded on the blockchain, creating a permanent and tamper-proof audit trail.
This record allows stakeholders to trace:
-
The journey of goods through the supply chain.
-
Compliance with standards at each stage.
-
Discrepancies back to their source.
Automation through digital contracts reduces the risk of fraud, human error, and compliance issues.
- Blockchain-powered scalability
By eliminating reliance on a Certificate Authority and other intermediaries, decentralized public key infrastructure offers more scalability to Web3-based supply chains. In traditional PKI, managing certificates across a complex supply chain can leave the supply network vulnerable to single points of failure. Moreover, scaling may require the involvement of multiple Certificate Authorities, likely resulting in delays or bottlenecks around certificate issuance and revocation. This approach is resource-intensive and may be unrealistic for global supply chains involving numerous entities.
In contrast, Web3-driven supply chains leverage blockchain as a trust anchor, enabling a distributed system where records and identities are verifiable by all participants on the chain. The result is a more efficient, scalable infrastructure, tailored to the complexity of modern supply chains.
Advantages of DPKI to (Web3) Supply Chains
- Eliminates Central Authority Risks: No single entity can compromise the supply chain.
- Self-Sovereign Identity: Supply chain participants control their cryptographic identities, reducing the overhead associated with traditional certificate issuance and management.
- Enhanced Transparency: All actions (such as key creation and revocation), and transactions are publicly recorded, promoting trust and accountability across the chain.
- Efficiency: Automation through smart contracts streamlines processes such as inspections and approvals, saving time and resources.
- Enhanced Security: Cryptographic signatures prevent data tampering and fraud, thus protecting data authenticity.
- Improved Scalability: Participants can manage their keys and verify others without bottlenecks from centralized authorities.
Integrating blockchain: a path to modernizing supply chains
The shift from centralized to decentralized systems is no longer a futuristic concept, but a growing reality for Web2 companies looking to modernize their supply chains. Companies like IBM, with its blockchain-powered Food Trust, and De Beers’ Tracr, used for tracking diamonds from source to store, demonstrate how blockchain and DPKI can integrate seamlessly into existing supply chain models to enhance transparency and trust.
Harnessing the benefits of decentralized supply systems doesn’t require a sudden overhaul of the existing supply chain. Web2 companies can adopt an incremental approach—beginning by identifying use cases—and testing DPKI in targeted areas, before gradually scaling the integration across the entire supply chain.
