The slides are a tutorial to blockchain to my friends in Spaces, Hsin Chu. I also will introduce Facebook's cryptocurrency, Libra and give my comments to Libra

1. Blockchain Tutorial for
Spaces
Chang, Chong Yie
Ver. 1906201027
1

2. Who am I?
2
• Job
• Blokcert, 2018 -
• ITRI, 2013 – 2018
• iCatch, 2012 – 2013
• Avermedia, 2011
• ITRI, 2002 – 2009
• Education
• IMBA, IE Business School, 2009 – 2010
• Pre-MBA, Thunderbird, 2009
• Ms. in EE, CCU, 1998 – 2001

3. Goal of The Slides
 Basic introduction to blockchain
 Basic introduction to Cryptocurrencies
 Case Study
3

4. Basic Introduction to Blockchain4

5. Let’s Start from Bitcoin
The first blockchain
5

6. Centralized Database
Admin
User User
• Who can read/write
• The admin actually owns
the data
6

7. Centralized Data with Multiple Parties
- Wikipedia
Company A Company B
• Actually, the
administrator can freeze a
page if he wants.
• You believe that Wiki is a
free
world.
7

8. Centralized Data with Multiple Parties
- Facebook
A DB controlled
by a 3rd party
Company A Company B
The 3rd
party
8

9. Blockchain
• No, they do not trust each other
• You can join the eco-system by
following the same protocol
• The have consensus.
• Each node can have a full copy of
the chain.
9

10. Computer Science behind Blockchain
-Hash
Any length Fixed length
Fast
OK
NO
• In general, you can verify uniqueness of data by
using “hash”.
• Blockchain uses hash to guarantee that previous
block is not tampered.10

11. Computer Science behind Blockchain
-Public Key Cryptography
• The algorithm guarantees that
• any one can encrypt data by
using Alice’s public key.
• only Alice can decrypt the
information.
• It is slow.
An address is an alias of
a public key
11

12. Computer Science behind Blockchain
-Digital signature
• Blockchain uses
digital signature to
guarantee that a
transaction is really
executed by “an
address”.
12
Hash
Encrypt hash with
private key
Hash
Decrypt signature
with public key

13. Computer Science behind Blockchain
-P2P Network
• Blockchain uses P2P
network to make sure
that everybody is aware
of a transaction.
• The slow propagation of
P2P network limits
blockchain’s capacity.
13

14. Consensus on Blockchain #1
 There is no authority on blockchain.
 A transaction is valid because “most people have the consensus on
the validity of a transaction.”
• In a world without authority, democracy is the
solution.
• Truth is not important, people believing in you is
important.
14

15. Consensus on Blockchain #2
• Everybody has the consensus that
the longest chain is trustable.
• Believe in market
15

16. Users on Blockchain
• Wallet: Users use wallets to keep the
key and issues transactions. It does
not have to keep the whole chain.
• Exchange nodes accept transactions
and forward transactions on P2P
network.
• Miner nodes write transactions on
the blockchain.
Each node keeps a
full copy of the chain.
16

17. Transactions on Blockchain
• A newer block hashes the previous
block.
• Each block contains multiple
transactions.
• Senders issue transactions.
• You cannot reverse a transaction
17

18. Why is Blockchain Temper-proof
Newer block hashes
previous block and
guarantees that the
previous block is not
tampered.
Each node keeps a
full copy of the chain.
18

19. What is Mining? #1
The first question, the oldest
question in the universe, hidden in
plain sight.
Who can write a transaction on the chain?
The person who cannot lose
his value on blockchain.
Invalid to consortium chain
19

20. What is Mining? #2
• The program sets a difficult quiz question to find
a set of special values which only can be solved
by brute-force.
• The first winner gets bitcoins as reward and
collects transaction fees from transactions.
• There will be a new block every 10 minutes.
20
• Making evil invest a lot on the eco-
system

21. Why is Blockchain So Slow?
 Transactions are batch-processed into a block every 10 minutes.
 People need time to figure out the longest chain.
21

22. Why is Blockchain So Successful
 A genius solution for multiple parties who may not trust each other.
 Everybody can join the market as long as that the new user uses the
same protocol.
 Cryptography
 makes records on blocks trustable and auditable.
 allows transactions executable automatically among multiple parties.
22

23. Blockchain Platform Overview #1
 3 types of blockchain
Public: Any person can access the blockchain and any person can
become a node on the chain
Consortium: Only accepts nodes from selected parties
Private: There is only one party control all nodes of a blockchain
23

24. Some Major Blockchain Platforms #1
Name Type of Chain
Supported
Applications Pros/Cons Notes
Bitcoin Public, Private Asset,
cryptocurrencies,
snapshot of
consortium and
private chains
Has been reviewed
thoroughly, trustable/
Transaction service
charge is too high,
low transaction
throughput
One of the only two
crypto currencies I
trust.
Ethereum Public, Private, and
Consortium
Asset,
cryptocurrencies,
snapshot of
consortium and
private chains,
complicated business
applications
Has been review
thoroughly, trustable/
Transaction service
charge is too high,
low transaction
throughput, difficult
to develop
consolidate smart
contracts
One of the only two
crypto currencies I
trust.
24

25. Some Major Blockchain Platforms #2
Name Type of Chain
Supported
Applications Pros/Cons Notes
Hyperledger Consortium and
Private
Asset, Business
applications
Supported by IBM
and Linux, Better
architecture design/
lack support of
cryptocurrencies
I only have limited
knowledge on
Hyperledger
Ripple Public Wire transfer Fraud

26. Some Major Blockchain Platforms #3
Name Type of Chain
Supported
Applications Pros/Cons Notes
IOTA IOT applications • It may be a fraud.
• I only have limited
knowledge on IOTA
• Too complicated to be
publicly reviewed.
R3 • It was famous but not
important any more
26

27. Cryptocurrencies
27

28. Only Two Cryptocurrencies Trustable
28
• The mechanism is transparent.
• Enough liquidity on the market.
• The intrinsic property as asset is obvious
• Enough liquidity on the market.
• The eco-system is keep growing.

29. ICO without Regulation = Fraud
 Why are there regulations for raising fund on the market?
To prevent fraud.
 Do most ICOs work hard on preventing fraud?
No
 Can we link the token to company performance?
No
29

30. Regulators vs. Cryptocurrencies30
30

31. Cryptocurrencies vs. Fiat Currencies31
31

32. Why is Cryptocurrencies Critical?32
32

33. The more chaotic the world is
The Better bitcoin is
33

34. Case Studies
34

35. Facebook Libra
35

36. What is Libra? I
36
 The cryptocurrency developed by Facebook.
 Trying to develop a payment solution to empower billions
of people especially who are out side of traditional banks

37. What is Libra? II
37
 It has a totally new architecture
 Blockchain: Libra
 Wallet: Calibra
 Programming language: Move
 Pegging to low-volatility assets, such as bank deposits and
short-term government securities in currencies from stable
and reputable central banks

38. What is Libra? III
38
 The founding partners are the base of the ecosystem
 Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
 Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra,
Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.
 Telecommunications: Iliad, Vodafone Group
 Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
 Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital,
Thrive Capital, Union Square Ventures
 Nonprofit and multilateral organizations, and academic institutions: Creative
Destruction Lab, Kiva, Mercy Corps, Women’s World Banking

39. What is Libra? IV
39
 Operation
 Base: Swiss
 Criteria to members
 A half rack of server space, a 100Mbps or above dedicated internet connection, a full-time
site reliability engineer and enterprise-grade security.
 Businesses: must hit two of three thresholds of a $1 billion USD market value or $500
million in customer balances, reach 20 million people a year and/or be recognized as a top
100 industry leader by a group like Interbrand Global or the S&P.
 Crypto-focused investors must have more than $1 billion in assets under management,
while Blockchain businesses must have been in business for a year, have enterprise-grade
security and privacy and custody or staking greater than $100 million in assets.
 Only up to one-third of founding members can be crypto-related businesses or individually
invited exceptions.
 Research organizations like universities, and nonprofits fulfilling three of four qualities,
including working on financial inclusion for more than five years, multi-national reach to
lots of users, a top 100 designation by Charity Navigator or something like it and/or $50
million in budget.

40. What is Libra? V
40
 Libra is designed to support cryptocurrency other than
pure blockchain such as Hyper Ledger
 Different from Bitcoin and Ethereum, Libra is one of the
data types supported by the Libra blockchain but not the
special case to the blockchain.
 Libra does support limited smart contract feature.
 It is still a kind of blockchain without fixed block size.

41. Issues
41

42. Concerns from Regulators
 Will Libra becomes a currency strong enough to compete against
USD?
 Can any government regulate it?
 Would it undermine government’s control to currency policy?
 Lack of communication to regulators
 Undermine US’s control to the world
 Unclear KYC procedure
 Lack of AML
42

43. My Comments I
 Good directions
 Cryptocurrencies first, smart contract later
 Clear and abundant documents
 Challenges
 Conflict price
 When Libra becomes big, it will influence assets which Libra pegs to. The price
of assets will affect the value of Libra again.
 The exchange rate of Libra to other currencies is difficult to make.
 The gas price will be high and people out of bank systems cannot
afford
43

44. My Comments II
 Challenges
 Lack of communication to governments
 Lack support from major banks
 Weak relationship with open-source communities
 A game of limited rich companies favored by Facebook
44