Blockchain Explained
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More info: https://blockchainhub.net/ Blockchain for Beginners: Blockchain history, state of development, outlook & current challenges #bitcoin #ethereum #smartcontracts
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Blockchain Explained
- 1. Blockchain State of Dev, Outlook & Challenges BlockchainHub ■ Dr. Shermin Voshmgir ■ April 14, 2017
- 2. Internet of Value Internet of Information TCP/IP = communication protocol revolutionized the way we exchange information aka ‘Information Data Highway’ 1st use case: Email Internet of value Blockchain = value exchange protocol can transform business, economy & politics with smart contracts as a basis for peer to peer transactions. 1st use case: Bitcoin
- 3. History Bitcoin Financial Crisis September 15th 2008 Collapse of Lehman Brothers Nadir of the financial crisis -> Unique point of failure Bitcoin White Paper October 31st 2008 Satoshi Nakamoto published the white paper for what he called bitcoin -> Crypto Currency that distributes trust gets rid of Unique point of failure
- 4. Centralized Systems How they work Information & Control is held by a central source
- 5. Centralized Systems When they Fail If the main node is corrupted/censored/fails the entire network fails
- 7. Decentralized Systems When they Fail If one node is corrupted/censored/fails the network can ‘repair’ itself
- 8. TRUST
- 9. Decentralize Trust Through machine Consensus Blockchain lets people who have no particular confidence in each other collaborate, without having to go through a trusted 3rd party aka neutral central authority
- 12. Shared, Trusted, Public, Ledger of Transaction That everyone can inspect No single user controls ● Shared: Every node in the P2P Network is client as well as server, holding identical copies of the application state. ● Trusted: Game Theory is used to model Economic incentive, for each node in the network to verify the transactions according to protocol. ● Public Ledger of Transactions Cryptography in the form of Distirbuted Merkle hash trees guarantee security as well as privacy
- 13. Why is Blockchain more tamper resistant than centralized systems? It’s not enough to manipulate the date on one computer, you have to manipulate the data on a majority of computers and the older the date, the more blocks you have to go back in time, the more expensive it become to break the encryption. Input and output are usually out of proportion.
- 14. Permission/ Verification By Consensus instead of Trusted 3rd Party Each transaction on the blockchain is verified by all nodes in the network to be true or false? If the majority of the nodes in the network agrees that a certain transaction is true, it is validated and a new block is created and added on ‘top’ of the chain.
- 15. Distributed Record Keeping No files No legacy systems No data redundancies
- 17. Public Ledger of Transactions of the Trusted 3rd Party? ● Shared ● Trusted ● Public ledger of transactions ● That everyone can inspect ● But which no single user controls
- 18. P2P Transactions without a middle man
- 19. Blockchain Intro Video: Bitcoin and Blockchain Technology Explained https://www.youtube.com/watch?v=oSP-taqLWPQ
- 21. Which Blockchains? # Bitcoin (1 Smat Contract) first use case of Blockchain # Altcoins (Experimental stage) Single purpose Forks of Bitcoin # Ethereum (Smart Contract OS) Universal Operating System where you can build any type of smart contract # Private/Consortium Blockchains Not Blockchains in the traditional sense, because not censorship resistant. Rather distributed databases.
- 22. Ethereum Crypto Economy Crypto Law # Beyond transferring value: Can verify if a party to a contract has fulfilled its side of the bargain # Decentralized virtual machine that can run any kind of smart contract or dApp # Ethereum contracts can be implemented in various languages, compiled into bytecode for the Ethereum Virtual Machine before being deployed to the blockchain.
- 23. Smart Contracts When a computer can verify or auto-enforce any type of business transaction or legal agreement
- 24. Smart Contracts Traditional Definition Automated performance Automated verification Auto enforceable
- 25. Smart Contracts Ethereum Definition decentralized Application dApp long lived process on the blockchain
- 26. Ethereum Technology Stack Decouples the Smart Contract Layer from the Consensus Layer (unlike Bitcoin)
- 27. Public Blockchain Bitcoin Ethereum Litecoin etc... Federated Blockchains R3 Private Blockchains Company internal Like the “IntErnet” in the 90ies? Like the “IntArnet” in the 90ies? Distributed Ledger Technologies Internet of Blockchains
- 28. The Future of Apps are dApps
- 29. Banking blockchains as record of who owns what instead a series of internal ledgers ● Bitcoin Blockchain - transactions (few cent vs. 5-10%) - faster (m/seconds vs. days) - censorship resistant (Russia...) - more secure: hard to quantify ● Fintech Use Case Santander Bank reckons that it could save banks up to $20 billion by 2022
- 30. eGovernment ● Self Sovereign Identity ● Public Registies: Land registries,, Marriage Cerificates,... ● Transparency ● Participation ● eVoting
- 31. Online Notaries Registers of the ownership ● Documents ● Luxury goods ● Works of art
- 32. Energy Energiewende in Deutschland ● P2P Energy Trading ● Smart Grids ● Mobile Charging
- 33. IoT User Access Control for machine to machine smart contracts
- 34. Accounting Revolution # Auditing & Compliance On the fly, no after the fact # Cooking the Books? # Less human errors # Faster taxation cycles
- 37. Blockchain & Law # Reduction of Compliance und Controlling Kosten # Legal Status of Smart Contracts # Which law applies in a P2P Network /serverless world # Legal Status of DAOs and Token Sales
- 38. Current Challenges ● Scalability ● Identity & KYC ● Privacy ● Business models on Public Blockchains? ● Lack of Developers ● Regulatory uncertainties
- 40. History of the Internet
- 41. www Revolutionized Information Information Data Highway
- 42. Web2 Programmable Web Social Media & Sharing Economy P2P solutions with middle man
- 43. Web3 Decentral Web P2P transactions without middle man
- 44. It’s like 1990 for the Internet we don’t know how this will pan out but the future is likely to be much more #decentral
- 45. blockchain (Ethereum, Private BCs, Bitcoin) ipfs, swarm (decentralized file storage) whisper (decentralized messaging) SoLiD (Social Linked Data) IPDB, BigchainDB