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Bitcoin is a cryptocurrency and worldwide payment system; it is the first
decentralized digital currency, as the system works without a central
repository or single administrator. Bitcoin was invented by an unknown
person or group of people under the name Satoshi Nakamoto and released as
open-source software in 2009.
The system is peer-to-peer, and transactions take place between users
directly, without an intermediary. These transactions are verified by network
nodes and recorded in a public distributed ledger called a Blockchain.
Firstly, it’s important to understand what a bitcoin looks like. It isn’t a single record
of a coin, as you might find on an accounting ledger or on your bank statement.
Instead, it’s registered as a transaction, comprised of three things: a transaction
input, a transaction output, and an amount.
The transaction input is the bitcoin address from which the money was sent.
The transaction output is the bitcoin address to which the money was sent. If the
bitcoin is in your wallet, that will be the bitcoin address under your control.
The amount is the amount of bitcoin that was sent.
The bitcoins that you send to someone were sent to you from someone else. When
they sent them to you, the address that they sent from was registered on the
bitcoin Blockchain as the transaction input, and your address – the address they
sent it to – was registered on the bitcoin network as the transaction output.
When you send that bitcoin on to someone else, your wallet creates a
transaction output which is the address of the person to whom you’re
sending the coin. That transaction will then be registered on the bitcoin
network with your bitcoin address as the transaction input.
When that person then sends those bitcoins to someone else, their address
will, in turn, become the transaction input, and that other person’s bitcoin
address will be the transaction output.
Using this system, people can trace bitcoin transactions all the way through
to when the bitcoin was first created, understanding who sent it to whom, at
any point in time.
This creates a completely transparent system in which all transactions can be
checked at any time.
How are New Bitcoins Created and Generated?
In simple word, bitcoin is a currency that runs electronically and generated by an individual or a
group of people named as the miner.
Bitcoin does not have any physical appearance and only can be traded online through bitcoin
exchanges.
Several analysts and investors see the virtual currency as our future currency.
Miners secure the Bitcoin network and process transactions.
Without miners, Bitcoin would be vulnerable to attack and become worth nothing. In return for
their security and processing services, miners are rewarded with new bitcoins (and transaction
fees).
Blocks
Each time a miner successfully solves Bitcoin’s proof of work algorithm that miner mined a
“block”. The miner or mining pool that mines a block is rewarded through the block reward, a set
amount of bitcoins agreed upon by the network. The bitcoins included in the block reward are all
new bitcoins. This is the only way that new bitcoins are created.
Bitcoin Mining
Bitcoin mining serves a 2-way purpose: of adding verified transactions into
the Blockchain; and of releasing new Bitcoins. Yet, bitcoin mining is primarily
done to let Bitcoin nodes to reach a secure, alteration-free consensus.
> Bitcoin mining is the process of adding transaction records to Bitcoin's
public ledger of past transactions or Blockchain. This ledger of past
transactions is called the block chain as it is a chain of blocks. The block chain
serves to confirm transactions to the rest of the network as having taken
place.
> Bitcoin nodes use the block chain to distinguish legitimate Bitcoin
transactions from attempts to re-spend coins that have already been spent
elsewhere.
How many Bitcoins will be Created?
The block reward started at 50 bitcoins per block, and halves every 210,000 blocks. This means
that each block up until block 210,000 will reward 50 bitcoins, but block 210,001 will reward just
25.
The Bitcoin difficulty makes sure that blocks are found on average every 10 minutes. With an
average of 10 minutes per block, a block halving occurs ever four years.
This means new bitcoins are generated every 10 minutes. Anyone can publically verify the
creation of new bitcoins using a block explorer.
Eventually the block reward halves many times and becomes so small that no new bitcoins can
be created.
Why Does Any Currency Have Value?
Economics teaches society that values are subjective; items have economic value because people
desire them for one reason or another. Currencies, or mediums of exchange, serve several
different and crucial functions in an economy. For one, they make trade easier; money currencies
trade for nearly any good or service.
For example, suppose a person has 5 units of lumber and wishes to purchase a dog. Without
currency, his only option is to find a lumber-wanting dog owner. With currency, like U.S. dollars,
he can sell the lumber to anyone who wants it and then use the money to purchase a dog.
Currency also provides a universal measurement for accounting purposes. For instance, without
currency, it is difficult to compare companies that sell different goods. Currency is used as a store
of value, which makes saving, investing and banking easier.
Some currencies, like gold, have value because they are useful as a commodity. Government fiat
currencies, like the U.S. dollar, have value because governments grant them legal tender status
and only accept taxes through them.
Why Do People Value Bitcoins?
Bitcoins do not have value as a physical commodity like gold and are not widely accepted as legal
tender like dollars. Rather, Bitcoin appears to have value for the following reasons:
It is popular. In short, people accept and trade in Bitcoin because other people accept and trade
in Bitcoin. It is recognized and accepted as a currency by many.
Bitcoin is decentralized and limited. This is a major factor for many Bitcoin users. Bitcoin is hard
for governments to trace and tax. Also, unlike fiat money produced by central banks, there is a
cap set on total Bitcoins, limiting how much the currency can devalue through inflation.
How can you Buy Bitcoin?
Mine It: The easiest—but slowest—way into Bitcoin is to mine it. Set up a dedicated computer to do nothing but
decrypt Bitcoin blocks, install some Bitcoin-mining software and let it do its thing. Again, doing so on a mid-range
desktop could take upwards of a year or more to fully decrypt a single block. That's not going to be worth the time
or effort.
Gang Up: You can also join a mining pool. These Internet-connected computer clusters break the work of a block
into pieces that are shared among the group. Once the block is decrypted, the resulting Bitcoin is doled out
according to how much work your rig contributed. There are a number of variations to this basic model, however,
depending on how the pool is set up
Play the Markets: The fastest—but riskiest—method is to go straight to the markets. So, say, for Mt. Gox, the
reputed "world's oldest and largest Bitcoin exchange," you first have to sign up, create a user name and then
respond to the confirmation your email verifying your address. Then the system will ask that you scan and send
confirm your real address and residence there for the last six months, and provide a government-issued photo ID
Then it's simply a matter of depositing funds into your account and carefully watching the market for opportunities
to make money. Like any exchange, Mt. Gox does charge a fee on your transactions, ranging from .60 percent per
trade down to .25 percent per trade, which the company uses to support the business as a whole:
A BTC wallet is like a real wallet filled with cash. You should never keep all your eggs in one basket
and the BTC wallet is no different from this age old idiom. So far there is no air tight solution to
keeping your BTC safe and secured...the following action items that can help protect your BTC
investment: Backup and encrypt your wallet, make multiple copies of your backup, store them in
more than one secure location and finally, don't keep all your BTCs in one wallet.
What's Next?
Regulation. It's the only way to bring the BTC markets under control, push out the criminal
element, and make them safe for commercial interests to enter. While some investors see
the upcoming regulatory crackdown as a death knell of the Bitcoin, it should actually do the
opposite and finally reign in the currency's wild value fluctuations. Just as the crash of the
poorly monitored sub-prime mortgage market led to the Great Recession, allowing the Wild
West days of Bitcoin trading to continue will only lead to more and bigger crashes.
Can Counterfeit Bitcoins be Created?
Only bitcoins rewarded to miners can be spent. It is impossible for a single user to bring new
bitcoins into supply.
This is because Bitcoin uses cryptography to verify all transactions. Only the correct digital
signature will allow bitcoins to be spent. Miners verify and process this data while they try to
solve the proof of work. This prevents people from spending bitcoins they do not own or creating
bitcoins that were not issued by the network.
Blockchains and Bitcoin
The Blockchain is perhaps the main technological innovation of Bitcoin.
Bitcoin isn’t regulated by a central authority. Instead, its users dictate and validate transactions
when one person pays another for goods or services, eliminating the need for a third party to
process or store payments.
The completed transaction is publicly recorded into blocks and eventually into the blockchain,
where it’s verified and relayed by other Bitcoin users. On average, a new block is appended to
the blockchain every 10 minutes, through mining.
Based on the Bitcoin protocol, the blockchain database is shared by all nodes participating in a
system. Upon joining the network, each connected computer receives a copy of the blockchain,
which has records, and stands as proof of, every transaction ever executed
What is a 'Blockchain‘
A blockchain originally block chain – is a continuously growing list of record, called blocks, which
are linked and secured using cryptography. Each block typically contains a hash pointer as a link
to a previous block, a timestamp and transaction data. By design, blockchains are inherently
resistant to modification of the data. A blockchain can serve as "an open, distributed ledger that
can record transactions between two parties efficiently and in a verifiable and permanent
way, For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network
collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given
block cannot be altered retroactively without the alteration of all subsequent blocks, which
requires collusion of the network majority.
Originally developed as the accounting method for the virtual currency Bitcoin, blockchains –
which use what's known as distributed ledger technology (DLT) – are appearing in a variety of
commercial applications today
The blockchain was designed so these transactions are immutable, meaning they cannot be
deleted. The blocks are added through cryptography, ensuring that they remain meddle-proof:
The data can be distributed, but not copied. However, the ever-growing size of the blockchain is
considered by some to be a problem, creating issues of storage and synchronization.
There are three types of Blockchains:
Public: a public Blockchain is a Blockchain where everyone can see all the
transactions, anyone can expect their transaction to appear on the ledger and
finally anyone can participate to the consensus process.
Federated: federated Blockchain don’t allow everyone to participate to the
consensus process. Indeed, only a limited number of nodes are given the
permission to do so. For instance, in a group of 20 pharmaceutical companies we
could imagine that for a block to be valid, 15 of them have to agree. The access to
the Blockchain however can be public or restricted to the participants.
Private: private Blockchains are usually used inside a company. Only specific
members are allowed to access it and carry out transactions.
BREAKING DOWN 'Blockchain'
A block is the ‘current’ part of a blockchain, which records some or all of the recent transactions.
Once completed, a block goes into the blockchain as a permanent database. Each time a block
gets completed, a new one is generated. There is a countless number of such blocks in the
blockchain, connected to each other (like links in a chain) in proper linear, chronological order
Bitcoin is a type of unregulated digital currency that was first created by Satoshi Nakamoto in
2008. Also known as a “cryptocurrency,” it was launched with the intention to bypass
government currency controls and simplify online transactions by getting rid of third-party
payment processing intermediaries. Of course, accomplishing this required more than just the
money itself. There had to be a secure way to make transactions with the cryptocurrency.
How is Blockchain for business different?
The Blockchain that supports Bitcoin was developed specifically for the cryptocurrency. That’s
one of the reasons it took a while for people to realize the technology could be adapted for use
in other areas. The technology also had to be modified quite a bit to meet the rigorous standards
that businesses require. There are three main characteristics that separate the Bitcoin Blockchain
from a Blockchain designed for business
Assets over cryptocurrency
There is an ongoing discussion about whether there is value in a token-free shared ledger, which
is essentially a Blockchain without cryptocurrency. Blockchain can be used for a much broader
range of assets than just cryptocurrency. Tangible assets such as cars, real estate and food
products, as well as intangible assets such as bonds, private equity and securities are all fair
game. In one business use case, Everledger is using Blockchain to track the provenance of luxury
goods to minimize fraud, document tampering and double financing. Now, over one million
diamonds are secured on Blockchain.
Identity over anonymity
Bitcoin thrives due to anonymity. On the other hand, businesses have KYC and AML compliance requirements that
require them to know exactly who they are dealing with.
Participants in business networks require the polar opposite of anonymity: privacy.
For example, in an asset custody system like the one being developed by Postal Savings Bank of China, multiple
parties, including financial institutions, clients, asset custodians, asset managers, investment advisors and auditors
are involved. They need to know who they are dealing with but one client or advisor doesn’t necessarily need to be
able to see all transactions that have ever occurred (especially when those transactions relate to different clients)
Selective endorsement over proof of work
Consensus in a Blockchain for business is not achieved through mining but through a process called “selective
endorsement.” It is about being able to control exactly who verifies transactions, much in the same way that
business happens today.
Why will Blockchain transform the global economy?
Similar to how the internet changed the world by providing greater access to information, Blockchain is poised
to change how people do business by offering trust. By design, anything recorded on a Blockchain cannot be
altered, and there are records of where each asset has been. So, while participants in a business network
might not be able to trust each other, they can trust the Blockchain. The benefits of Blockchain for business are
numerous, including reduced time (for finding information, settling disputes and verifying transactions),
decreased costs (for overhead and intermediaries) and alleviated risk (of collusion, tampering and fraud).
Blockchain Ledger
Builder 001 2001Sold to Owner 1
Owner
Real Estate
Architect
Government
Contractor
Insurance
002
003
004
005
006
007
20 K improvement
Approved Extn
Sold to Owner 2
Failed Inspection
50 K Improvement
Electrical Fire
2012
2010
2008
2004
2013
2016
Builder 001 2001Sold to Owner 1
Extensions of Blockchains
To Use conventional BANKING as an analogy, the Blockchain is like a full history of a financial institution's transactions, and
each block is like an individual bank statement. But because it's a distributed database system, serving as an open
electronic ledger, a Blockchain can simplify business operations for all parties.
For these reasons, the technology is attracting not only financial institutions and stock exchanges, but many others in the
fields of music, diamonds, insurance, and Internet of Things (IOT) devices. Advocates have also suggested that this kind of
electronic ledger system could be usefully applied to
Voting systems
Weapon or vehicle registrations by state governments
Medical records
Confirm ownership of antiquities or artwork.
Infact, the first international Blockchain transaction was completed on October 24, 2016. Brokered by the Commonwealth
Bank of Australia and Wells Fargo & Co (WFC), the $35,000 deal involved Australian cotton trader Brighann Cotton
Marketing, which purchased 88 bales cotton from its U.S. division in Texas and sent it to Qingdao, China
DATA IS THE CURRENCY
According to Modi, technology-driven transformation is deeply influencing societies, exploring
new frontiers and throwing up risks. "Technology has the ability to bend, break and link and a
very good example of these three aspects is the use of social media," he said. Data is a huge
asset but "the flow of global data is creating the biggest opportunities and the greatest
challenges. He who controls the data controls the world", he said.
Even established firms are interested. Microsoft Corporation (MSFT) has also expressed interest in blockchain
technology, having recently formed a partnership with blockchain firm ConsenSys. In December 2015,
Microsoft and ConsenSys announced Ethereum Blockchain as a Service (EBaaS) on Azure — Microsoft’s cloud
computing platform — to provide a single-click, cloud-based environment to clients and developers. In June
2016, the two companies started developing an open source, blockchain-based identity system for people,
products, apps and services.
Advantages of Blockchains
Efficiencies resulting from DLT can add up to some serious cost savings. DLT systems make it
possible for businesses and banks to streamline internal operations, dramatically reducing the
expense, mistakes, and delays caused by traditional methods for reconciliation of records.
The widespread adoption of DLT will bring enormous cost savings in three areas, advocates say:
> Electronic ledgers are much cheaper to maintain than traditional accounting systems; the
employee headcount in back offices can be greatly reduced.
> Nearly fully automated DLT systems result in far fewer errors and the elimination of repetitive
confirmation steps.
> Minimizing the processing delay also means less capital being held against the risks of pending
transactions.
https://www.youtube.com/watch?v=lD9KAnkZUjU

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Blockchain

  • 1.
  • 2. Bitcoin is a cryptocurrency and worldwide payment system; it is the first decentralized digital currency, as the system works without a central repository or single administrator. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and released as open-source software in 2009. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a Blockchain.
  • 3. Firstly, it’s important to understand what a bitcoin looks like. It isn’t a single record of a coin, as you might find on an accounting ledger or on your bank statement. Instead, it’s registered as a transaction, comprised of three things: a transaction input, a transaction output, and an amount. The transaction input is the bitcoin address from which the money was sent. The transaction output is the bitcoin address to which the money was sent. If the bitcoin is in your wallet, that will be the bitcoin address under your control. The amount is the amount of bitcoin that was sent. The bitcoins that you send to someone were sent to you from someone else. When they sent them to you, the address that they sent from was registered on the bitcoin Blockchain as the transaction input, and your address – the address they sent it to – was registered on the bitcoin network as the transaction output.
  • 4. When you send that bitcoin on to someone else, your wallet creates a transaction output which is the address of the person to whom you’re sending the coin. That transaction will then be registered on the bitcoin network with your bitcoin address as the transaction input. When that person then sends those bitcoins to someone else, their address will, in turn, become the transaction input, and that other person’s bitcoin address will be the transaction output. Using this system, people can trace bitcoin transactions all the way through to when the bitcoin was first created, understanding who sent it to whom, at any point in time. This creates a completely transparent system in which all transactions can be checked at any time.
  • 5. How are New Bitcoins Created and Generated? In simple word, bitcoin is a currency that runs electronically and generated by an individual or a group of people named as the miner. Bitcoin does not have any physical appearance and only can be traded online through bitcoin exchanges. Several analysts and investors see the virtual currency as our future currency. Miners secure the Bitcoin network and process transactions. Without miners, Bitcoin would be vulnerable to attack and become worth nothing. In return for their security and processing services, miners are rewarded with new bitcoins (and transaction fees). Blocks Each time a miner successfully solves Bitcoin’s proof of work algorithm that miner mined a “block”. The miner or mining pool that mines a block is rewarded through the block reward, a set amount of bitcoins agreed upon by the network. The bitcoins included in the block reward are all new bitcoins. This is the only way that new bitcoins are created.
  • 6. Bitcoin Mining Bitcoin mining serves a 2-way purpose: of adding verified transactions into the Blockchain; and of releasing new Bitcoins. Yet, bitcoin mining is primarily done to let Bitcoin nodes to reach a secure, alteration-free consensus. > Bitcoin mining is the process of adding transaction records to Bitcoin's public ledger of past transactions or Blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. > Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
  • 7. How many Bitcoins will be Created? The block reward started at 50 bitcoins per block, and halves every 210,000 blocks. This means that each block up until block 210,000 will reward 50 bitcoins, but block 210,001 will reward just 25. The Bitcoin difficulty makes sure that blocks are found on average every 10 minutes. With an average of 10 minutes per block, a block halving occurs ever four years. This means new bitcoins are generated every 10 minutes. Anyone can publically verify the creation of new bitcoins using a block explorer. Eventually the block reward halves many times and becomes so small that no new bitcoins can be created.
  • 8. Why Does Any Currency Have Value? Economics teaches society that values are subjective; items have economic value because people desire them for one reason or another. Currencies, or mediums of exchange, serve several different and crucial functions in an economy. For one, they make trade easier; money currencies trade for nearly any good or service. For example, suppose a person has 5 units of lumber and wishes to purchase a dog. Without currency, his only option is to find a lumber-wanting dog owner. With currency, like U.S. dollars, he can sell the lumber to anyone who wants it and then use the money to purchase a dog. Currency also provides a universal measurement for accounting purposes. For instance, without currency, it is difficult to compare companies that sell different goods. Currency is used as a store of value, which makes saving, investing and banking easier. Some currencies, like gold, have value because they are useful as a commodity. Government fiat currencies, like the U.S. dollar, have value because governments grant them legal tender status and only accept taxes through them.
  • 9. Why Do People Value Bitcoins? Bitcoins do not have value as a physical commodity like gold and are not widely accepted as legal tender like dollars. Rather, Bitcoin appears to have value for the following reasons: It is popular. In short, people accept and trade in Bitcoin because other people accept and trade in Bitcoin. It is recognized and accepted as a currency by many. Bitcoin is decentralized and limited. This is a major factor for many Bitcoin users. Bitcoin is hard for governments to trace and tax. Also, unlike fiat money produced by central banks, there is a cap set on total Bitcoins, limiting how much the currency can devalue through inflation.
  • 10. How can you Buy Bitcoin? Mine It: The easiest—but slowest—way into Bitcoin is to mine it. Set up a dedicated computer to do nothing but decrypt Bitcoin blocks, install some Bitcoin-mining software and let it do its thing. Again, doing so on a mid-range desktop could take upwards of a year or more to fully decrypt a single block. That's not going to be worth the time or effort. Gang Up: You can also join a mining pool. These Internet-connected computer clusters break the work of a block into pieces that are shared among the group. Once the block is decrypted, the resulting Bitcoin is doled out according to how much work your rig contributed. There are a number of variations to this basic model, however, depending on how the pool is set up Play the Markets: The fastest—but riskiest—method is to go straight to the markets. So, say, for Mt. Gox, the reputed "world's oldest and largest Bitcoin exchange," you first have to sign up, create a user name and then respond to the confirmation your email verifying your address. Then the system will ask that you scan and send confirm your real address and residence there for the last six months, and provide a government-issued photo ID Then it's simply a matter of depositing funds into your account and carefully watching the market for opportunities to make money. Like any exchange, Mt. Gox does charge a fee on your transactions, ranging from .60 percent per trade down to .25 percent per trade, which the company uses to support the business as a whole:
  • 11. A BTC wallet is like a real wallet filled with cash. You should never keep all your eggs in one basket and the BTC wallet is no different from this age old idiom. So far there is no air tight solution to keeping your BTC safe and secured...the following action items that can help protect your BTC investment: Backup and encrypt your wallet, make multiple copies of your backup, store them in more than one secure location and finally, don't keep all your BTCs in one wallet. What's Next? Regulation. It's the only way to bring the BTC markets under control, push out the criminal element, and make them safe for commercial interests to enter. While some investors see the upcoming regulatory crackdown as a death knell of the Bitcoin, it should actually do the opposite and finally reign in the currency's wild value fluctuations. Just as the crash of the poorly monitored sub-prime mortgage market led to the Great Recession, allowing the Wild West days of Bitcoin trading to continue will only lead to more and bigger crashes.
  • 12.
  • 13. Can Counterfeit Bitcoins be Created? Only bitcoins rewarded to miners can be spent. It is impossible for a single user to bring new bitcoins into supply. This is because Bitcoin uses cryptography to verify all transactions. Only the correct digital signature will allow bitcoins to be spent. Miners verify and process this data while they try to solve the proof of work. This prevents people from spending bitcoins they do not own or creating bitcoins that were not issued by the network.
  • 14.
  • 15. Blockchains and Bitcoin The Blockchain is perhaps the main technological innovation of Bitcoin. Bitcoin isn’t regulated by a central authority. Instead, its users dictate and validate transactions when one person pays another for goods or services, eliminating the need for a third party to process or store payments. The completed transaction is publicly recorded into blocks and eventually into the blockchain, where it’s verified and relayed by other Bitcoin users. On average, a new block is appended to the blockchain every 10 minutes, through mining. Based on the Bitcoin protocol, the blockchain database is shared by all nodes participating in a system. Upon joining the network, each connected computer receives a copy of the blockchain, which has records, and stands as proof of, every transaction ever executed
  • 16. What is a 'Blockchain‘ A blockchain originally block chain – is a continuously growing list of record, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. A blockchain can serve as "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way, For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority. Originally developed as the accounting method for the virtual currency Bitcoin, blockchains – which use what's known as distributed ledger technology (DLT) – are appearing in a variety of commercial applications today The blockchain was designed so these transactions are immutable, meaning they cannot be deleted. The blocks are added through cryptography, ensuring that they remain meddle-proof: The data can be distributed, but not copied. However, the ever-growing size of the blockchain is considered by some to be a problem, creating issues of storage and synchronization.
  • 17.
  • 18. There are three types of Blockchains: Public: a public Blockchain is a Blockchain where everyone can see all the transactions, anyone can expect their transaction to appear on the ledger and finally anyone can participate to the consensus process. Federated: federated Blockchain don’t allow everyone to participate to the consensus process. Indeed, only a limited number of nodes are given the permission to do so. For instance, in a group of 20 pharmaceutical companies we could imagine that for a block to be valid, 15 of them have to agree. The access to the Blockchain however can be public or restricted to the participants. Private: private Blockchains are usually used inside a company. Only specific members are allowed to access it and carry out transactions.
  • 19.
  • 20. BREAKING DOWN 'Blockchain' A block is the ‘current’ part of a blockchain, which records some or all of the recent transactions. Once completed, a block goes into the blockchain as a permanent database. Each time a block gets completed, a new one is generated. There is a countless number of such blocks in the blockchain, connected to each other (like links in a chain) in proper linear, chronological order Bitcoin is a type of unregulated digital currency that was first created by Satoshi Nakamoto in 2008. Also known as a “cryptocurrency,” it was launched with the intention to bypass government currency controls and simplify online transactions by getting rid of third-party payment processing intermediaries. Of course, accomplishing this required more than just the money itself. There had to be a secure way to make transactions with the cryptocurrency.
  • 21.
  • 22. How is Blockchain for business different? The Blockchain that supports Bitcoin was developed specifically for the cryptocurrency. That’s one of the reasons it took a while for people to realize the technology could be adapted for use in other areas. The technology also had to be modified quite a bit to meet the rigorous standards that businesses require. There are three main characteristics that separate the Bitcoin Blockchain from a Blockchain designed for business Assets over cryptocurrency There is an ongoing discussion about whether there is value in a token-free shared ledger, which is essentially a Blockchain without cryptocurrency. Blockchain can be used for a much broader range of assets than just cryptocurrency. Tangible assets such as cars, real estate and food products, as well as intangible assets such as bonds, private equity and securities are all fair game. In one business use case, Everledger is using Blockchain to track the provenance of luxury goods to minimize fraud, document tampering and double financing. Now, over one million diamonds are secured on Blockchain.
  • 23. Identity over anonymity Bitcoin thrives due to anonymity. On the other hand, businesses have KYC and AML compliance requirements that require them to know exactly who they are dealing with. Participants in business networks require the polar opposite of anonymity: privacy. For example, in an asset custody system like the one being developed by Postal Savings Bank of China, multiple parties, including financial institutions, clients, asset custodians, asset managers, investment advisors and auditors are involved. They need to know who they are dealing with but one client or advisor doesn’t necessarily need to be able to see all transactions that have ever occurred (especially when those transactions relate to different clients) Selective endorsement over proof of work Consensus in a Blockchain for business is not achieved through mining but through a process called “selective endorsement.” It is about being able to control exactly who verifies transactions, much in the same way that business happens today.
  • 24. Why will Blockchain transform the global economy? Similar to how the internet changed the world by providing greater access to information, Blockchain is poised to change how people do business by offering trust. By design, anything recorded on a Blockchain cannot be altered, and there are records of where each asset has been. So, while participants in a business network might not be able to trust each other, they can trust the Blockchain. The benefits of Blockchain for business are numerous, including reduced time (for finding information, settling disputes and verifying transactions), decreased costs (for overhead and intermediaries) and alleviated risk (of collusion, tampering and fraud).
  • 25.
  • 26. Blockchain Ledger Builder 001 2001Sold to Owner 1 Owner Real Estate Architect Government Contractor Insurance 002 003 004 005 006 007 20 K improvement Approved Extn Sold to Owner 2 Failed Inspection 50 K Improvement Electrical Fire 2012 2010 2008 2004 2013 2016 Builder 001 2001Sold to Owner 1
  • 27. Extensions of Blockchains To Use conventional BANKING as an analogy, the Blockchain is like a full history of a financial institution's transactions, and each block is like an individual bank statement. But because it's a distributed database system, serving as an open electronic ledger, a Blockchain can simplify business operations for all parties. For these reasons, the technology is attracting not only financial institutions and stock exchanges, but many others in the fields of music, diamonds, insurance, and Internet of Things (IOT) devices. Advocates have also suggested that this kind of electronic ledger system could be usefully applied to Voting systems Weapon or vehicle registrations by state governments Medical records Confirm ownership of antiquities or artwork. Infact, the first international Blockchain transaction was completed on October 24, 2016. Brokered by the Commonwealth Bank of Australia and Wells Fargo & Co (WFC), the $35,000 deal involved Australian cotton trader Brighann Cotton Marketing, which purchased 88 bales cotton from its U.S. division in Texas and sent it to Qingdao, China
  • 28.
  • 29. DATA IS THE CURRENCY According to Modi, technology-driven transformation is deeply influencing societies, exploring new frontiers and throwing up risks. "Technology has the ability to bend, break and link and a very good example of these three aspects is the use of social media," he said. Data is a huge asset but "the flow of global data is creating the biggest opportunities and the greatest challenges. He who controls the data controls the world", he said.
  • 30. Even established firms are interested. Microsoft Corporation (MSFT) has also expressed interest in blockchain technology, having recently formed a partnership with blockchain firm ConsenSys. In December 2015, Microsoft and ConsenSys announced Ethereum Blockchain as a Service (EBaaS) on Azure — Microsoft’s cloud computing platform — to provide a single-click, cloud-based environment to clients and developers. In June 2016, the two companies started developing an open source, blockchain-based identity system for people, products, apps and services.
  • 31.
  • 32.
  • 33.
  • 34.
  • 35. Advantages of Blockchains Efficiencies resulting from DLT can add up to some serious cost savings. DLT systems make it possible for businesses and banks to streamline internal operations, dramatically reducing the expense, mistakes, and delays caused by traditional methods for reconciliation of records. The widespread adoption of DLT will bring enormous cost savings in three areas, advocates say: > Electronic ledgers are much cheaper to maintain than traditional accounting systems; the employee headcount in back offices can be greatly reduced. > Nearly fully automated DLT systems result in far fewer errors and the elimination of repetitive confirmation steps. > Minimizing the processing delay also means less capital being held against the risks of pending transactions.
  • 36.
  • 37.
  • 38.
  • 39.
  • 40.
  • 41.
  • 42.