Blockchain Will Be Bigger Than the Internet

Blockchain as a General
Purpose Technology : Bigger
than the Internet?
Copyright LookSmart Group
2018
SUPPLIER DIVERSITY
BUSINESS SUMMIT

What is Blockchain?

BOLD STATEMENT: Ignore at Your Own Risk
Internet Killed Newsprint
Copyright LookSmart Group 3

BOLD STATEMENT: Ignore at Your Own Risk
Ecommerce Killing Offline Retailers

Blockchain IS NOT Bitcoin
Bitcoin uses Blockchain
But Blockchain Can Be Used Everywhere Else

What is BlockChain?
• Imagine a “chain” of “blocks”, each representing a record - a
transaction, or some kind of “accomplished work”
• The continuous chain is a ledger (or database), a growing list of
records that can be traced back to the first transaction
• Every new transaction is appended to the “chain” which can be
traced back to the original transaction, called “genesis”.
Source: BlockGeeks

Then, Imagine the Ledger is ...
1. Peer-to-Peer : Each computer is a
node
2. Database is distributed and replicated
3. Each node has a copy of the database
4. Not one or even more than one node
can destroy or change the data -> The
term is, decentralized

What is Decentralized?

The Ledger (“Blockchain”) is Peer to Peer,
Decentralized, Distributed, Redundant and
Self-Verifying!
Source: IBM

How Does It Verify?
Different Verification Consensus Algorithms
• Proof of Work
• Proof of Influence
• Proof of Stake
• Delegated Proof of Stake
Trade-offs between Scalability, Security, Speed, Energy Inputs

... Furthermore It is Secure Through Cryptography
Source: Computerworld

A Blockchain can be Public or Permissioned
(Private)
Anyone with permission/access can see the ledger (the “blockchain”)
Let us take a look at a public blockchain in action:
https://blockexplorer.com/

Analogy: Desktop Excel Vs Cloud Google Sheet
• Microsoft Excel
• Need to Email Back and Forth to Collaborate
• Google Sheet / Office360 Excel
• Multiple Users Can View and Edit at the
Same Time

Finally, It Is Programmable – Smart Contracts!
Source: BlockGeeks

Source: Blockchain Training Alliance

In Summary, BlockChain
1. database that cannot be changed
2. digital ledger (“online spreadsheet”)
3. secure proof of any work achieved
4. timestamp
5. record anything of value
6. programmable with smart contracts
Source: NapkinFinance

How Big Will Blockchain Get?
Answer: Much, much bigger than the
Internet. Much, much bigger than bitcoin
Why? It is a General Purpose Technology

General Purpose Technologies are innovations
that can drastically affect an entire economy.
A General Purpose Technology (GPT) has 4 criteria:
1. is a single, recognisable generic technology
2. initially has much scope for improvement but comes
to be widely used across the economy
3. has many different uses
4. creates many spillover effects

Historically, a GPT is Revolutionary:
● Printing (Guttenberg)
● Railroads
● Electricity
● Internet
● Blockchain

A GPT Drastically Drives Down the Cost of
“Something”
● Printing (Guttenberg) <-> Written Record
● Railroads <-> Transportation
● Electricity <-> Power
● Internet <-> Information
● Artificial Intelligence <-> Human analysis
● Blockchain <-> Verification

Four Main Points Drive Down Verification Costs
1. Decentralized - cannot be controlled by any single
entity -> TRUST WITHOUT THIRD PARTY
2. Redundant - no single point of failure
3. Transparency - every node has access to view it
4. Incorruptible - because one or more nodes do not
have the power to change because altering
information will require too much power.
ALL OF THESE DRIVE DOWN COST OF VERIFICATION
DOWN TO ZERO, ELIMINATE RECORD KEEPING, SAVE
LOTS OF MONEY

Is Blockchain Already Here? You bet it is.

Source: Mijin

Diamond Industry
Source: IBM

How to Spot Blockchain Use Cases
• Large business networks
• Trust is necessary between parties
• 3rd
party audits
• No single source of truth
• Known inefficient processes
• Large geographical/time zone separation
• Inconsistent business processes
• Low/Zero value-added processes
• Networks where Trust is lacking

Centralized Market Power vs. Decentralized
•Facebook
•Uber
•Google
•Paypal
•Amazon

Sample Companies That Have Blockchain Projects
•J.P. Morgan
•ASX
•AXA
•Walmart
•Broadridge
•Maersk
•Nestle
•Dole Food

Architectural Considerations
•Platform & Toolsets
•Open Source Platforms
•Commercial Platforms
•Consensus Algorithms
• Proof of Work
• Proof of Stake
• Proof of Activity
• Byzantine Fault Tolerance
•Public vs. Private
•Permissioned vs. Permissionless
•Transaction Costs
•Interoperability
•Governance

Minorities For the Win - Women Leaders
•Blythe Master, CEO of Digital
Asset Holding
•Amber Baldet, CEO of Clovyr
•Donna Dillenberger, IBM
Blockchain Development Team
Head

About Michael Onghai
michael@snowyaugust.com
•Entrepreneur & Investor
•LookSmart, digital search and social advertising
technology company
•Clickable, data aggregation software as a service
•Blockchain, AI, Virtual Reality Consulting
•We develop decentralized blockchain Applications
•Graduate of Computer Science & Engineering, UCLA
•Charter Financial Analyst Charterholder
•FundersClub Panelist, Angel Investor (Coinbase)
•Silicon Canyon - Technology Accelerator in Phoenix, AZ

Why Downtown Phoenix?
• Launching our Blockchain Accelerator
• Blockchain Fintech sandbox
• Silicon Valley companies are moving to Phoenix
• Close to great universities
• Business friendly
• City has major tech expansion plans
• Reasonable cost of living
• Bill Gates’ investment
35

Blockchain Will Be Bigger Than the Internet

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