The History of Blockchain - From Bitcoin to Shared Ledgers

1. 00000000 f9 be b4 d9 1d 01 00 00 01 00 00 00 00 00 00 00 |................| 00000010 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 |................| 00000020 00 00 00 00 00 00 00 00 00 00 00 00 3b a3 ed fd |............;...| 00000030 7a 7b 12 b2 7a c7 2c 3e 67 76 8f 61 7f c8 1b c3 |z{..z.,>gv.a....| 00000040 88 8a 51 32 3a 9f b8 aa 4b 1e 5e 4a 29 ab 5f 49 |..Q2:...K.^J)._I| 00000050 ff ff 00 1d 1d ac 2b 7c 01 01 00 00 00 01 00 00 |......+|........| 00000060 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 |................| 00000070 00 00 00 00 00 00 00 00 00 00 00 00 00 00 ff ff |................| 00000080 ff ff 4d 04 ff ff 00 1d 01 04 45 54 68 65 20 54 |..M.......EThe T| 00000090 69 6d 65 73 20 30 33 2f 4a 61 6e 2f 32 30 30 39 |imes 03/Jan/2009| 000000a0 20 43 68 61 6e 63 65 6c 6c 6f 72 20 6f 6e 20 62 | Chancellor on b| 000000b0 72 69 6e 6b 20 6f 66 20 73 65 63 6f 6e 64 20 62 |rink of second b| 000000c0 61 69 6c 6f 75 74 20 66 6f 72 20 62 61 6e 6b 73 |ailout for banks| 000000d0 ff ff ff ff 01 00 f2 05 2a 01 00 00 00 43 41 04 |........*....CA.| 000000e0 67 8a fd b0 fe 55 48 27 19 67 f1 a6 71 30 b7 10 |g....UH'.g..q0..| 000000f0 5c d6 a8 28 e0 39 09 a6 79 62 e0 ea 1f 61 de |..(.9..yb...a.| 000000ff FROM BITCOIN TO BLOCKCHAIN

2. 2008

3. 2008 BofA buys struggling CountrywideJan 11 Fed forces sale of Bear StearnsMar 16 Lehman Brothers ﬁles for bankruptcySep 15 Fed bails out AIG for $85BSep 16 Washington Mutual failsSep 25 Market crashes; system almost collapsesSep 29 Gov’t authorizes $700B for bank bailoutOct 3

4. A B We have been solving for the wrong problem instead of solving for trust C

5. BA C we should have been solving for integrity We have been solving for the wrong problem

6. BA maybe we don’t need trust We have been solving for the wrong problem

7. “The root problem with conventional currency is all the trust that’s required to make it work…the history of ﬁat currencies is full of breaches of that trust.” — Satoshi Nakamoto (creator of Bitcoin)

8. What if? New ﬁnancial system built on integrity instead of trust…

9. What if? New type of database with built-in integrity

10. What if? Replicate it everywhere so everyone has a copy

11. What if? All participants validate every change to the database

12. What if? We created a tamper-proof audit log of all transactions. Transactions Transactions Transactions Transactions

13. January 3, 2009

14. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a ﬁnancial institution.

15. A A A B B A A C B Let’s combine the best of peer-to-peer… Peer to Peer No fees Resilient No single point of failure Distributed power Freedom to innovate No large attack target

16. A A A C And the best of centralization… C A A A B B B Central Counterparty Increased reliability Reduced reconciliation Single connection Universal system of record Reduced complexity Transaction safety

17. A To create the best of both worlds… A A C C A A A B B B Central Counterparty A A B B A A C B Peer to Peer

18. A B B A C A A blockchain built on integrity Blockchain Solution C

19. A B Alice wants to send money to Bob. How does a blockchain work?

20. The transaction is posted to a block along with other transactions. A B C D E F G H M N I J O P K L Q R

21. The block is sent to all validators in the network A B C D E F G H M N I J O P K L Q R Node A Node B Node C Node D Node E

22. The network approves the valid transactions. A B N C D E F G H M I J O P K L Q R Node A Node B Node C Node D Node E

23. The block is added to the blockchain A B Block 432568 + 10 Transactions Block 432567 117 Transactions Block 432566

24. Block 432568 + 10 Transactions Block 432567 117 Transactions Block 432566 As the chain builds, the transaction becomes immutable.

25. Block 432568 + 10 Transactions Block 432567 117 Transactions Block 432566 Block 432569 112 Transactions As the chain builds, the transaction becomes immutable.

26. Block 432568 + 10 Transactions Block 432569 112 Transactions Block 432570 38 Transactions As the chain builds, the transaction becomes immutable.

27. Block 432568 Block 432569 112 Transactions Block 432570 38 Transactions Block 432571 96 Transactions As the chain builds, the transaction becomes immutable.

28. Blockchain is… ..a technical tour-de-force - Bill Gates …a once in a generation opportunity - PriceWaterhouseCoopers …the ﬁrst native digital medium for value, just as the internet was the ﬁrst native digital medium for information - Harvard Business Review

29. Annual Blockchain VC Funding (Millions) 2012 2013 2014 2015 2016 $2.13M $95.05M $362.53M $499.08M $718.00M

30. FINANCIAL INDU$TRY

31. July 2014 Jan 2015 July 2015 Jan 2016

32. 66% of Banks will adopt Blockchain by 2020 2014 2017 2020 0.00% 15.00% 66.00% source: IBM Institute of Business Value survey

33. Blockchain is not FinTech It’s data management

34. A ﬁnancial transaction is just a data type…

35. Bitcoin proved we can move data between two non-trusting, anonymous parties. A B

36. But what if we know the other party? Factory Truck

37. But what if we know the other party? Hospital Patient

38. But what if we know the other party? Client Bank

39. That changes how we secure this Client Bank

40. That changes how we identify these Client Bank

41. That changes what we put here… Client Bank?

42. and what we see here. Block 432568 Block 432569 112 Transactions Block 432570 38 Transactions Block 432571 96 Transactions G H M N I J O P K L Q R

43. A B B A C A So whether the ledger secures currency Blockchain Solution C $ $ $ $

44. A B B A C A So whether the ledger secures identities Blockchain Solution C

45. A B B A C A So whether the ledger secures information Blockchain Solution C

46. A … it’s just a ledger Blockchain Solution

47. A Blockchain Solution $ $ … and it’s all just data

48. A B B A C A C $ $ The power to unlock its potential rests with us… ﬁnally.

49. Let’s Talk hello@gem.co gem.co Please limit to internal use.

The History of Blockchain - From Bitcoin to Shared Ledgers

Emily Vaughn

The History of Blockchain - From Bitcoin to Shared Ledgers