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Ikhlaq Sidhu
Ikhlaq Sidhu
Chief Scientist & Founding Director
Center for Entrepreneurship & Technology
Industrial Engineer...
Ikhlaq Sidhu
What is Blockchain and why does it matter?
Ikhlaq Sidhu
 A public ledger of
transactions
 Distributed data
(many copies)
 Decentralized
(not created by
just one m...
Ikhlaq Sidhu
Before Blockchain, to trade money, you needed trusted agents
(banks) who keep your accounts
A = Alice B = Bob...
Ikhlaq Sidhu
New Idea: What if everyone keeps a copy of the same ledger?
http://www.slideshare.net/raffaele.mauro/
cryptoc...
Ikhlaq Sidhu
So if Alice wants to give Asset X to Bob, she simply sends out
the transaction to everyone in the network.
A
B
Ikhlaq Sidhu
The same copy of the ledger is kept
by all the people who trade.
www.imponderablethings.com
Ikhlaq Sidhu
A Check is like a “Transaction”
From
To
Amount
Signature
Tx Id
Metadata
From
To
Amount
Signature
Note
Michael...
Ikhlaq Sidhu
Immutable:
• Can not simply edit the transactions
• Can even change one bit in a block
• Can not insert a blo...
Ikhlaq Sidhu
Some clever safeguards have been built in so that no one
single authority needs to be “trusted” in the system...
Ikhlaq Sidhu
So What can you do with blockchain technology?
• Transfer asset to someone else and record that it was done
•...
Ikhlaq Sidhu
Some problems with blockchain technology?
• The current version is getting long (65GB) and growing. Everyone ...
Ikhlaq Sidhu
However, many firms are investing in blockchain
Ikhlaq Sidhu
And many new ventures are being developed
Ikhlaq Sidhu
Case Supply Chain and asset tracking:
• Everledger is permanent ledger for diamond certification and related
...
Ikhlaq Sidhu
Smart Contracts
• Computer Program that
automatically executes the terms of
a contract
Example: You want to b...
Ikhlaq Sidhu
Challenge
• You can apply block chain to many applications
• But many times,
– there is a simpler way that si...
Ikhlaq Sidhu
Remember: The Key benefits are:
– Working with people who can’t trust each other
– No single agent can resolv...
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Blockchain Opportunities Introduction

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This is a simple introduction to blockchain and related opportunities.

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Blockchain Opportunities Introduction

  1. 1. Ikhlaq Sidhu Ikhlaq Sidhu Chief Scientist & Founding Director Center for Entrepreneurship & Technology Industrial Engineering & Operations Research IEOR Emerging Area Professor Award UC Berkeley Hello and Welcome
  2. 2. Ikhlaq Sidhu What is Blockchain and why does it matter?
  3. 3. Ikhlaq Sidhu  A public ledger of transactions  Distributed data (many copies)  Decentralized (not created by just one machine) What is Blockchain, more specifically?
  4. 4. Ikhlaq Sidhu Before Blockchain, to trade money, you needed trusted agents (banks) who keep your accounts A = Alice B = BobMail a check of $5 Bob’s BankAlice’s Bank Ledger at Bob’s Bank: Transaction Amount Balance $100.00 Check #1 from Alice $5.00 $105.00 Ledger at Alice’s Bank: Transaction Amount Balance $50 Check #1 to Bob -$5.00 $45.00 • Validate funds • Signature • Records • Manage disputes Bob Alice $5
  5. 5. Ikhlaq Sidhu New Idea: What if everyone keeps a copy of the same ledger? http://www.slideshare.net/raffaele.mauro/ cryptocurrencies-blockchain-smart-contracts-a-general-introduction-46027023
  6. 6. Ikhlaq Sidhu So if Alice wants to give Asset X to Bob, she simply sends out the transaction to everyone in the network. A B
  7. 7. Ikhlaq Sidhu The same copy of the ledger is kept by all the people who trade. www.imponderablethings.com
  8. 8. Ikhlaq Sidhu A Check is like a “Transaction” From To Amount Signature Tx Id Metadata From To Amount Signature Note Michael Crosby, Nachiappan, Pradhan Pattanayak, Sanjeev Verma, Vignesh Kalyanaraman Check Transaction
  9. 9. Ikhlaq Sidhu Immutable: • Can not simply edit the transactions • Can even change one bit in a block • Can not insert a block Transactions are grouped into blocks that point to each other
  10. 10. Ikhlaq Sidhu Some clever safeguards have been built in so that no one single authority needs to be “trusted” in the system A B 1. You can only spend what you have (everyone knows your balance) 2. You can not spend someone else’s asset (you need to sign with your private key) 3. You can not double spend (Pay two people with the same asset, but a transaction has to accepted as valid which means you have to wait for 6 blocks to be added, 1 hour)
  11. 11. Ikhlaq Sidhu So What can you do with blockchain technology? • Transfer asset to someone else and record that it was done • Trace who had it before, and before that, and before that … • You can access the blockchain like a database • You can have transactions with “anonymous” people and yet still not require a trusted agent People believe that blockchain can "replace or disrupt" money transactions, record keeping, notarization, tracking of goods, which means that the opportunity is the same size as "the banking market", "the document market”, …
  12. 12. Ikhlaq Sidhu Some problems with blockchain technology? • The current version is getting long (65GB) and growing. Everyone needs to keep a copy of the blockchain. • It takes lots of computing power to create new blocks. Millions of computers are all working in parallel to create each block. • It takes about 60 min before people can trust a large transaction. • For large numbers of people, it uses distributed consensus. For smaller numbers, you can modify the technology to use other ways, like simply voting.
  13. 13. Ikhlaq Sidhu However, many firms are investing in blockchain
  14. 14. Ikhlaq Sidhu And many new ventures are being developed
  15. 15. Ikhlaq Sidhu Case Supply Chain and asset tracking: • Everledger is permanent ledger for diamond certification and related transactions. It provides verification for insurance, law enforcements, and owners.
  16. 16. Ikhlaq Sidhu Smart Contracts • Computer Program that automatically executes the terms of a contract Example: You want to buy a car: • The transfer requires sign-off from car dealer, bank, and buyer. – From Dealer to Bank • When payments are completed, car is transferred – From bank to buyer. • If payments are not made in time, right to sell changes: – From user to bank. Smart contracts can work with blockchain to automatically transfer assets
  17. 17. Ikhlaq Sidhu Challenge • You can apply block chain to many applications • But many times, – there is a simpler way that simply does not need blockchain technology – There is already a good solution and no change is needed • We must find applications where only blockchain can be a good solution. Software Platforms
  18. 18. Ikhlaq Sidhu Remember: The Key benefits are: – Working with people who can’t trust each other – No single agent can resolve the issues – There is value in making the information public and transparent

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