Blockchain. Everyone talks about it, but how does it really work? This talk covers the fundamentals and discusses real world examples of how blockchain is being used to transform healthcare, real estate, humanitarian aid, governance and other domains. See the original talk at: https://www.facebook.com/thekasbahhub/videos/1875008969491362/

1. ``
Blockchain
Vincent Olislagers -1st of June - for Kasbah Hub
How it works,
and why you should care

2. ``
Agenda
• Why the hype?
• Cryptocurrency vs blockchain
• How does a blockchain work?
• What can you use it for?
• Types of blockchains
• Advantages / challenges with blockchain tech

8. Blockchain Cryptocurrency
Bitcoin
Ethereum
e.g. hyperledger fabric e.g. byteball, iota…

9. Most cryptocurrencies
use blockchain tech

10. What is a cryptocurrency?

11. What it’s not

12. What it’s not

13. What it’s also not

14. ``
Then what is it?
Source: https://en.wikipedia.org/wiki/Cryptocurrency

15. ``
Then what is it?
Source: Vincent Olislagers
Digital money that
can only be spent by
its owner
👑

16. And what is a blockchain?

17. Source: https://www.goodreads.com/book/show/1447135.The_Paradox_Of_Self_Amendment

18. Nomic
Each move in Nomic is an attempt to set
up new rules of game
Players propose new rules and vote for
them (even this rule can be changed)
Source: https://www.slideshare.net/makiwara/eng-wiki-gaming-presentation

19. ``
A blockchain is..
a network of computers that does collective
book keeping on the state of the network,
through a majority consensus on the rules of
bookkeeping.
Source: https://www.youtube.com/watch?v=oSP-taqLWPQ

20. ``
Source: https://www.youtube.com/watch?v=oSP-taqLWPQ

21. A blockchain is both the
state of the network
and the network itself

22. ``
A ledger (sort of like an Excel spreadsheet)
Source: http://www.gartner.com/smarterwithgartner/blockchain-goes-beyond-financial-services/
State of the network

23. ``
A ledger (sort of like an Excel spreadsheet),
which is distributed (updated by multiple entities)
Source: http://www.gartner.com/smarterwithgartner/blockchain-goes-beyond-financial-services/
State of the network

24. ``
A ledger (sort of like an Excel spreadsheet),
which is distributed (updated by multiple entities),
follows specific rules on who can read/write to it
Source: http://www.gartner.com/smarterwithgartner/blockchain-goes-beyond-financial-services/
State of the network

25. ``
State of the network
A ledger (sort of like an Excel spreadsheet),
which is distributed (updated by multiple entities),
follows specific rules on who can read/write to it,
which can bring trust in an untrusted environment
Source: http://www.gartner.com/smarterwithgartner/blockchain-goes-beyond-financial-services/

26. ``
State of the network
A ledger (sort of like an Excel spreadsheet),
which is distributed (updated by multiple entities),
follows specific rules on who can read/write to it,
which can bring trust in an untrusted environment,
and creates an irrevocable record of significant data and events.
Source: http://www.gartner.com/smarterwithgartner/blockchain-goes-beyond-financial-services/

27. What is a block?

28. ``
A block is..
A group of transactions..

29. ``
A block is..
A group of transactions..
which are broadcast on the network..

30. ``
A block is..
A group of transactions..
which are broadcast on the network..
that have been or are being written into the blockchain.

31. What’s in a block?
Source: https://www.cryptocompare.com/coins/guides/what-is-a-block-header-in-bitcoin/

32. What’s in a block?
A block header, containing
• The bitcoin version number
• A timestamp (in UNIX
• A difficulty target
• among other things
Source: https://www.cryptocompare.com/coins/guides/what-is-a-block-header-in-bitcoin/

33. What’s in a block?
A block header, containing
• The bitcoin version number
• A timestamp (in UNIX
• A difficulty target
• among other things
The actual transactions which contain
• the sending addresses,
• receiving addresses
• amount transfered
It can contain other things, depending
on which type of blockchain you’re
looking at.
Source: https://www.cryptocompare.com/coins/guides/what-is-a-block-header-in-bitcoin/

34. Source: https://blockchain.info/block/000000000000000000678cd9feb122c40c65685b9314696f823e647bca738cf4
What’s in a block?

35. https://blockchain.info/block/000000000000000000678cd9feb122c40c65685b9314696f823e647bca738cf4

36. What about the chain?

37. ``
The chain is..
A sequence of blocks..

38. ``
The chain is..
A sequence of blocks..
that have been confirmed by the network..

39. ``
The chain is..
A sequence of blocks..
that have been confirmed by the network..
that represent a chronological record..

40. ``
The chain is..
A sequence of blocks..
that have been confirmed by the network..
that represent a chronological record..
of events on the network.

41. Source: https://www.ft.com/content/2be94381-66dc-3320-a292-6a1cde0a3d5f

42. Why should I trust this?

43. How is consensus reached?
(who gets to decide what’s in the ‘spreadsheet’?)

44. ``
Answer:
It depends..

45. ``
Answer:
It depends..
on the rules in the blockchain you’re using

46. ``
Answer:
It depends..
on the rules in the blockchain you’re using
This set of rules is called the
‘consensus mechanism’

47. ``
Source: https://www.youtube.com/watch?v=oSP-taqLWPQ

48. What can you use a blockchain for?

49. ``
You can use it as a platform for
payment remittance & clearing
That tracks the state of all programs that are running
on the network
Examples:
• Cross-border payments
• Intra-bank settlements

52. ``
You can use it to for identity
management
• Authentication with services
• Tracking reputation & reliability of users and services

54. ``
You can use it to represent ownership
of underlying assets
• Property ownership
• Land ownership
• Ownership of intellectual property
• Ownership of capital in a VC index fund

56. ``
You can use it as a tool for compliance
and risk management
Compliance (e.g. with government regulations)
• Know your customer (KYC)
• Anti-money laundering (AML)
• Countering the Financing of Terrorism (CFT)
• Licensing & data protection compliance
Insurance
Background checks
• Outstanding debt

59. ``
You can use it as a payment method
or a store of value
Examples:
• Bitcoin, Digix
• Monero, Dash, Zcash (support anonymous payments)

62. ``
You can use it as a tool for tracing the
origin of goods
Supply chain optimization
• By allowing any actor in the supply chain to audit a single
source of truth
Provenance services
• Make visible where and when a product was produced by
whom and under what conditions

65. ``
You can use it to gate access to
resources
• Streaming media
• Prepaid credit to access content
• Loyalty rewards
• Store loyalty points with a service
• User attention
• Ad rewards

69. ``
You can use it to increase transparency
in governance
• In government elections
• In corporate governance
• In decentralised autonomous organizations (DAO’s)

71. ``
You can use it as a cloud computing
platform
• Applications in a public cloud
• (Called smart contracts)
• Prediction markets
• Decentralised cloud computing
• Decentralised cloud storage

76. What types of blockchains exist?

77. ``
Public blockchains
Blockchains which anyone in the world can read..
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

78. ``
Public blockchains
Blockchains which anyone in the world can read..
anyone in the world can send transactions to and expect to see them
included if they are valid..
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

79. ``
Public blockchains
Blockchains which anyone in the world can read..
anyone in the world can send transactions to and expect to see them
included if they are valid..
anyone in the world can participate in the consensus process
(the process for determining what blocks get added to the chain and
what the current state is.)
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

80. ``
Consortium blockchains
Blockchains where the consensus process is controlled by a
pre-selected set of nodes (participants)
e.g. a consortium of 15 financial institutions
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

81. ``
Consortium blockchains
Blockchains where the consensus process is controlled by a
pre-selected set of nodes (participants)
e.g. a consortium of 15 financial institutions
The right to read the blockchain may be public, or it may be
restricted to the participants
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

82. ``
Consortium blockchains
Blockchains where the consensus process is controlled by a
pre-selected set of nodes (participants)
e.g. a consortium of 15 financial institutions
The right to read the blockchain may be public, or it may be
restricted to the participants
Hyperledger, EEA are examples of these types of consortiums
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

83. ``
Consortium blockchains
Blockchains where the consensus process is controlled by a
pre-selected set of nodes (participants)
e.g. a consortium of 15 financial institutions
The right to read the blockchain may be public, or it may be
restricted to the participants
Hyperledger, EEA are examples of these types of consortiums
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

84. ``
Private blockchains
A blockchain where write permissions are kept centralised
to one organisation.
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

85. ``
Private blockchains
A blockchain where write permissions are kept centralised
to one organisation.
Read permissions may be public or restricted
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

86. ``
Private blockchains
A blockchain where write permissions are kept centralised
to one organisation.
Read permissions may be public or restricted
These behave essentially very much like regular databases.
Source: https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

87. What are the advantages
of blockchain tech?

88. ``
Some advantages include..
• cost savings due to fewer middlemen
• near-instantaneous clearing and settlement
• transaction irreversibility when needed
• fewer transaction errors
• increased confidence in products whose underlying assets are opaque
• be in control of your own data
• transparency & immutability, nobody can secretly change data
Source:
https://www.finextra.com/finextra-downloads/newsdocs/the%20fintech%202%200%20paper.pdf
http://www.coindesk.com/santander-blockchain-tech-can-save-banks-20-billion-a-year/
https://www2.deloitte.com/nl/nl/pages/innovatie/artikelen/blockchain-technology-9-benefits-and-7-challenges.html

89. ``
Some advantages include..
• cost savings due to fewer middlemen
• near-instantaneous clearing and settlement
• transaction irreversibility when needed
• fewer transaction errors
• increased confidence in products whose underlying assets are opaque
• be in control of your own data
• transparency & immutability, nobody can secretly change data

90. Source: https://www.youtube.com/watch?v=2iF73cybTBs

91. mikro-bank.no

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