Smart Cards & Devices Forum 2013 - Mobile financial services

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Smart Cards & Devices Forum 2013 - Mobile financial services

  1. 1. May 2013Co je nového a co nás čeká v oblastimobilních finančních služeb?Jan Němec, Petr Šturc
  2. 2. In-shop paymentOn-line paymentP2P paymentMembershipRewardsPlace check-inTicketingGift cardsMobile Commerce Initiatives2Use cases TechnologiesSmart Cards & Devices Forum 2013
  3. 3. Mobile Commerce FrameworkMOBILE PROXIMITYPAYMENTMOBILE REMOTEPAYMENTSVALUE-ADDED SERVICES3 Smart Cards & Devices Forum 2013
  4. 4. Mobile WalletMOBILE WALLET SERVICE PROVIDERSCONSUMERSWALLET PROVIDERS4A mobile app that turns your phone into your wallet & stores virtualversions of your existing plastic cards and other services on your phone.Smart Cards & Devices Forum 2013
  5. 5. 3 models emerging for PoSIN THE DEVICE/SE IN THE CLOUD HYBRID5 Smart Cards & Devices Forum 2013
  6. 6. In the Device: Over 200 million wirelesssubscribers Over 100 million phonessold each year 3 in 4 U.S wireless users Over 20,000 retailoutletsTap to paySave with offersSimplify loyalty cardsSmart Cards & Devices Forum 20136
  7. 7. In the Cloud: PayPal7 Smart Cards & Devices Forum 2013Send moneyBuy onlineCollect coupons and offers
  8. 8. In the Cloud:8 Smart Cards & Devices Forum 2013QR based payment, couponing, loyalty, etc.• Own transaction data• Bring down payment processing cost
  9. 9. Hybrid soon: LevelUp9 Smart Cards & Devices Forum 2013Pay with rewards
  10. 10. Hybrid: Google Wallet V210 Smart Cards & Devices Forum 2013Peer-2-Peer payments integrated to gMailInstant Buy API for Android appsNFCCouponing
  11. 11. Couponing: PassBook, ShopKick, FourSquare11 Smart Cards & Devices Forum 2013
  12. 12. Innovations: Square, PayPal Here, Intuit GoPayment12 Smart Cards & Devices Forum 2013
  13. 13. Dwolla – another payment network13 Smart Cards & Devices Forum 2013
  14. 14. OffersDiscountsLoyalty accumulation/redemptionPersonalized service (photo/face recognition)Faster service (place order in advance)Location-oriented serviceSocial media14New Services for PaymentSmart Cards & Devices Forum 2013
  15. 15. Gemalto’s 360° Mobile Payment SolutionIn-Device to cloud based payment15GemaltoNFC SIMGemaltoSecure NFCapplicationVisa / MasterCardNetworks,open loop paymentsMNO TSMNFC PaymentPayment TransactionsMNOSP TSMGemaltoMobile Wallete/m-CommerceDomestic & Intl Money TransferGemalto MobilePayment PlatformBankBack-EndWalletServer (SSP)NFC Wallet AdminSmart Cards & Devices Forum 2013
  16. 16. Bitcoin16 Smart Cards & Devices Forum 2013
  17. 17. Bitcoin in the news17Value of 1 bitcoin in US$Smart Cards & Devices Forum 2013
  18. 18. Bitcoin is … payment systemDecentralizedCheap micro-paymentPseudonymousNo charge-backsP2PAliceBobTo: 1ABtVtjFFC22zgH......Amount: 1.0 BTC Senda.k.a. Internet money18 Smart Cards & Devices Forum 2013
  19. 19. Bitcoin is … applicationhttps://github.com/bitcoin/bitcoin19 Smart Cards & Devices Forum 2013
  20. 20. Bitcoin is … peer-to-peer networkMessages:<addr> - node discovery<tx> - transaction<block> - accounting+ 15 othersAliceBob20 Smart Cards & Devices Forum 2013
  21. 21. Bitcoin is … experimental monetary systemLimited “cash” supplyDeflationNo central bank21 Smart Cards & Devices Forum 2013
  22. 22. Bitcoin is … mysteryWho is Satoshi Nakamoto?How single person beat 30yrs of research?*Is he genius?Is it single person?Why he disappeared?D. Chaum, Blind signatures for untraceable payments, Proc. Crypto, 198222 Smart Cards & Devices Forum 2013
  23. 23. Address & walletECC crypto - secp256k1 curveAddress =Base58(Network id || RIPEMD160(SHA256(KeyPub) || Checksum)Checksum = SHA256(SHA256(*))Example: 1ABtVtjFFC22zgHrAL8P24xpsiWoUSkXpkWallet = keystore holding private keys KeyPriv23 Smart Cards & Devices Forum 2013
  24. 24. Transaction50BTC originating from [here] goes [there].24 Smart Cards & Devices Forum 2013
  25. 25. Transaction security25 Smart Cards & Devices Forum 2013
  26. 26. Transaction inputs / outputs∑inputs ≥ ∑outputs !26
  27. 27. Transaction inputs / outputsinputOutput address27 Smart Cards & Devices Forum 2013
  28. 28. How to avoid double-spending?Private Balance ledgerBankmay spend users’s money (attack)may create money (inflation)only may verify transactionis SPoF (Single Point of Failure)Alice Bob Carole0 10 155 8 177 5 182512Ledgercz - účetní knihafr - livre comptablehu - főkönyv28 Smart Cards & Devices Forum 2013
  29. 29. How to avoid double-spending?AlicePub BobPub CarolePub0 10 155 8 177 5 182512Public Balance ledgerBankmay spend users’s money (attack)may create money (inflation)only may verify transactionis SPoF (Single Point of Failure)29 Smart Cards & Devices Forum 2013
  30. 30. Public shared ledger = blockchain“Genesis” blockRoot hashNonceHashTx 1Block 1Root hashNonceHashHash HashTx 2 Tx 3Prev block hashBlock 2Root hashNonceHashHash HashTx 4 Tx 5Prev block hashBlock 3Root hashNonceHashHash HashTx 6 HashPrev block hashHashTx 7 Tx 8Merkle tree30 Smart Cards & Devices Forum 2013
  31. 31. How does a block looks like?
  32. 32. Satoshi’s solution = Proof-of-WorkCreation of block is difficult32 Smart Cards & Devices Forum 2013
  33. 33. Proof-Of-WorkBlock hash must be close to zero (DIFFICULTY)Block contains chosen counter – nounceNounce satisfying condition above is hard to find(DIFFICULTY * 232 hash ops)DIFFICULTY adjusted every 2016 blocks (tokeep block generation speed at 6 blocks/hr)Current difficulty (28-Apr-13) = 8974296 network hashrate ~ 70x1012 hashes/sec33 Smart Cards & Devices Forum 2013
  34. 34. “I have found [this] to have zeros [here].”
  35. 35. Mining racesBloc 557 Bloc 55835 Smart Cards & Devices Forum 2013
  36. 36. Mining racesBloc 557 Bloc 55836 Smart Cards & Devices Forum 2013
  37. 37. Mining racesBloc 557Bloc 558aBloc 558b37 Smart Cards & Devices Forum 2013
  38. 38. Mining racesBloc 557Bloc 558aBloc 558bBloc 559aBloc 559b38 Smart Cards & Devices Forum 2013
  39. 39. Mining racesBloc 557Bloc 558aBloc 558bBloc 559aBloc 559b39 Smart Cards & Devices Forum 2013
  40. 40. Mining racesBloc 557Bloc 558aBloc 558bBloc 559aBloc 559 Bloc 56040 Smart Cards & Devices Forum 2013
  41. 41. Mining racesBloc 557Bloc 558aBloc 558bBloc 559aBloc 559 Bloc 56041 Smart Cards & Devices Forum 2013
  42. 42. Mining racesBloc 557Bloc 558aBloc 558b Bloc 559 Bloc 56042 Smart Cards & Devices Forum 2013
  43. 43. Double-spendingAttacker must outperform good guys in the mining races(> 50% of computing power)Bloc 557Bloc 558aBloc 558b Bloc 559 Bloc 560Hahah, I’ll changehistory andtransfer your $ tomy address!43 Smart Cards & Devices Forum 2013
  44. 44. Mining in numbers (29-Apr-13)Block Count 233,806Blocks avg. per hour 7.83Blocks last 24h 188(4700BTC =$658,800)Network Hashrate Terahashs/s 72.23Network Hashrate PetaFLOPS 917.33Energy consumption*) 876 MWh(~$87,000)*) GPU: 1.8 Mhash/J oule FPGA: 18 Mhash/Joule44 Smart Cards & Devices Forum 2013
  45. 45. “All the money comes from here!”Why should anyone do it?
  46. 46. How to mine bitcoins for profit?
  47. 47. Pools47 Smart Cards & Devices Forum 2013
  48. 48. Economy of miningMiners are rewarded (25BTC per block Apr-13)Miners have incentive to build valid blocks (with validtransactions) … otherwise others will not build ontheir work, branch will be orphaned and reward notredeemedThe reward is halved every ~4years (210,000 blocks)Total nb of BTC 11,097,625Value in US$ (30-Apr-13) 1,598,058,00048 Smart Cards & Devices Forum 2013
  49. 49. Number of bitcoins over time49 Smart Cards & Devices Forum 2013
  50. 50. Transaction feeFee = Sum(tx outputs) – Sum(tx inputs)May be collected by minerPurpose:Increase motivation - clients give fee forfaster serviceKeep motivation when all coins minted50 Smart Cards & Devices Forum 2013
  51. 51. Auto-adjustmentMore user = more hashing = faster blockgenerationDIFFICULTY raised to keep 10 mins / blockIf raising too high - profitability of mining dropsand miners stops workingDIFFICULTY falls equilibrium should be reached (?)51 Smart Cards & Devices Forum 2013
  52. 52. Resourceshttps://en.bitcoin.it/wiki/Category:Technicalhttp://blockexplorer.comhttp://blockchain.infohttps://github.com/laanwj/bitcoin-qthttp://people.mozilla.com/~bwarner/bitcoin/52 Smart Cards & Devices Forum 2013
  53. 53. Thank you!Jan NemecJan.Nemec@gemalto.com

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