On the 20th of June, the Brussels Legal Hackers invited @KristofVerslype and myself to explain #bitcoin, #blockchain and #smartcontracts. We added some use cases to spice up things. This set only contains my slides for the evening.

1. Koen Vingerhoets

2. Agenda
Key benefits of DLT
Blockchain use cases
Conclusion

3. Understanding distributed ledgers
Nomen est omen : blockchain
A transaction is
- Declaration of an incident
- Pictures of the accident
- Signed contract
- A proof of payment
- An offer from car repair
- Steps in the RDR wizard
- …

4. Understanding distributed ledgers
Encryption vs hashing
vs
1. Every hash is unique
2. Infinitly reproducable
3. One way traffic
A hash is NOT unique

6. Blockchain : a business definition
The blockchain is, from a business point of view,
 A shared platform
 On which parties who don’t know or trust each other
 Are able to collaborate with respect for privacy
 Without relying on a possibly corrupt administrator.

7. Blockchain : a database with benefits

8. Transparency
Blockchain : a database with benefits

9. Transparency Permissioned vs permissionless
vs

10. Ownership
Transparency
Blockchain : a database with benefits

11. Ownership How value is stored
Nicki -> KoenIN 0,8 BTC
Wim -> KoenIN 0,6 BTC
Koen -> ThomasOUT 1 BTC
Wim -> KoenREST 0,4 BTC
Koen receives two payments
- 0,8 BTC from Nicki
- 0,6 BTC from Wim
Koen transfers 1 BTC to Thomas
- 0,8 BTC + 0,2 BTC
- 0,4 BTC is unspent transaction
• (A defined number of) assets are
stored on the blockchain
• Each asset is identified
• Assets are divided
• Assets are transferred (not copied)
=> Clear view on who owns what when.

12. Ownership
Transparency
Traceability
Blockchain : a database with benefits

13. Traceability Defense of the sequence

14. Ownership
Transparency
Traceability
Distributed
Blockchain : a database with benefits

15. Distributed Centralized vs distributed
Trusted party &
Single point of failure

16. TrustOwnership
Transparency
Traceability
Distributed
Blockchain : a database with benefits

17. Trust Consensus as a service

18. TrustOwnership
Transparency
Traceability
Distributed
Smart contracts
Blockchain : a database with benefits

19. The problem with smart contracts

20. Smart contracts : a definition
A smart contract is an agreement whose execution is both automated and enforceable.
• The actual “transaction” among parties is expressed through and independently
executed by computer code, no party can block it or otherwise tamper with.
• It constitutes legally binding rights and obligations of the involved parties.
Advantages:
• Parties are in consensus at all times as to the existence, nature and evolution of
the facts shared among them, which are governed by the program.
• Used to satisfy
• common contractual conditions,
• lower transaction costs and risk, and
• eliminate the need for trusted intermediaries.

21. Smart contracts : a bunch of code

22. Smart contracts : a workflow

23. Smart contracts : a Ricardian Contract

24. TrustOwnership
Transparency
Traceability
Distributed
Smart contracts
Blockchain : a database with benefits…
… to share with our friends ...

25. Blockchain : a database with benefits…
… to share with our friends ...
… to have a single shared source of truth.
Blockchain:

26. Agenda
Key benefits of DLT
Blockchain use cases
Conclusion

27. Blockchain : a new paradigm

28. Company 28
KBC Decision model (© David Birch)

29. Company 29
• Depending on the use case, a specific DLT benefit might be that important
in order to choose for DLT.
• It is not that everything has to score 4 or 5
Trust
Ownership
Traceability
Transparency
Distributed
Smart contracts
Key elements are scored in a spiderdiagram

30. Maatschappij 30
 Blockchain will not solve :
• Organisational problems
• Slow processes
• Data Quality issues
• Legal recourse
• Fraudulent purposes
• …
 Blockchain has a number of technical challenges to solve wrt:
• Scalability
• #Transactions per unit of time
• Network size
• Latency (Time until transaction confirmed)
• …
When not to use a DLT

31. Our experiments / projects
Trade Finance
Payments
KBC Securities
KBC Insurance
Digital Identity (KYC)
Banking Products
R3 CEV
B-Hive
…

32. KBC Insurance | Document Authentication

33. Trust Chain - your digital documents on the blockchain
Why?
How do we, as insurer,
secure trust of our customers
in our digital documents,
now and in the future?

34. Trust Chain - your digital documents on the blockchain
What
Authentic
Valid
2-sided

35. Trust Chain - your digital documents on the blockchain
VALID FROM
26 April 2017
VALID
FROM
VALID
FROM
VALID
FROM
VALID
FROM
VALID
FROM
Proof of Authenticity
Proof of Existence
Proof of Validity

36. B-Hive | Life Insurance

38. KBC Bank – credits | Car loans

39. As Is: Check investment evidence – traditional process
customer
branch
HQ
invoice
Check
invoice
Registers
invoice
Scans invoiceCredit =
approved
Pay credit
garage invoice
Pay for car
Receives
payment
Extra check invoice (natural
person if amount > 10 K)

40. To Be: Check investment evidence – blockchain
customer
branch Credit =
approved
garage Receives amount
Blockchain
approved
credit?
HQ
Confirms invoice,
delivery and
chooses Payment
Confirms
order & data
Uploads
order and
adds ref,
Amount
VINnbr
Initiates
Pick up car &
uploads final
invoice
Check invoice -> scoring
garages

44. Identity on ledger

45. Groundrules online identity
- You administrate your own identity
- You share parts of your identity
- You decide what to share
- Your identity follows your life
- Transparency is key
- Portable and usable identity
- The lesser shared, the better
- Protect the user
Naar https://github.com/ChristopherA/self-sovereign-identity/blob/master/self-sovereign-identity-principles.md

46. Identity Reputation
Access
Feedback
KYC service
Uber service
Customer loyalty card

48. Agenda
Key benefits of DLT
Blockchain use cases
Conclusion

49. Blockchain & financial institutions : the forgotten words
LIABILITY GOVERNANCE REGULATIONS

50. 1. Blockchain strategy is about collaboration.
2. Not just IT, also business is involved (risk appetite).
3. Unpredictable reactions of regulator & Government.
4. Financial signals (ROI) are problematic.
5. Radical uncertainty is the norm.

51. We
The financial system relies on trust & data.
Blockchain is trust & data.

52. Hi!
Did you enjoy the slides?
I raise funds (BTC) to support improving the daily lives
of people with cystic fibrosis, like my son.
I invite you to open your heart and your BTC wallet, please scan the QR code.
Or use 1JmSPfvJ751BYi7TVD8xXqWzPpGXqrW9Fj as recipient.
Proceeds go to Muco vzw (www.muco.be)
Thank you for your support and appreciation.
More info, questions or remarks?
Koen.Vingerhoets@telenet.be
Twitter : @IthronKoen