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Blockchain: An Introduction, by Ruben Merre NGRAVE

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BLOCKCHAIN – AN INTRODUCTION
By Ruben Merre, CEO Ngrave
UNIVERSITY LECTURE

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Welcome to the wallet revolution.
@ngrave_official
Ngrave; Ruben Merre (CEO)
https://www.ngrave.io/

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Is this the end?

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Blockchain: An Introduction, by Ruben Merre NGRAVE

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Blockchain - An Introduction is an extensive intro to blockchain technology and cryptocurrencies. Ruben Merre, CEO of blockchain hardware wallet tech company Ngrave, uses this slide deck for University lectures, introducing university level college students to the basics and the inner workings of blockchain technology.

Blockchain - An Introduction is an extensive intro to blockchain technology and cryptocurrencies. Ruben Merre, CEO of blockchain hardware wallet tech company Ngrave, uses this slide deck for University lectures, introducing university level college students to the basics and the inner workings of blockchain technology.

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Blockchain: An Introduction, by Ruben Merre NGRAVE

  1. 1. BLOCKCHAIN – AN INTRODUCTION By Ruben Merre, CEO Ngrave UNIVERSITY LECTURE
  2. 2. Welcome to the wallet revolution. @ngrave_official Ngrave; Ruben Merre (CEO) https://www.ngrave.io/
  3. 3. Is this the end?
  4. 4. Is this the end?
  5. 5.  Over 3000 cryptocurrencies  200 billion dollar market  Growing strongly  <0,01% of total world assets
  6. 6. Mobility Cloud Robotics Machine learning Social web IoT Big data
  7. 7. THE TECHNOLOGICAL REVOLUTION
  8. 8. I never heard of “blockchain”… Is anybody really using that?
  9. 9. I never heard of “blockchain”… Is anybody really using that?
  10. 10. I never heard of “blockchain”… Is anybody really using that?
  11. 11. THE INTERNET OF INFORMATION
  12. 12. THE INTERNET OF VALUE
  13. 13. …protect people’s ownership rights in Honduras
  14. 14. …create a TRUE sharing economy
  15. 15. …end the remittance rip-off
  16. 16. …recapture our identities
  17. 17. …ensure compensation for the creators of value
  18. 18. 1. Massively growing new technology
  19. 19. 1. Massively growing new technology 2. Basic principles of a blockchain
  20. 20. SOMEWHERE…IN AN AVERAGE “STUDENTENKOT”
  21. 21. • Pool • Jacuzzi • Electricity • Internet • Groceries
  22. 22. • Pool • Jacuzzi • Electricity • Internet • Groceries
  23. 23. • Pool • Jacuzzi • Electricity • Internet • Groceries What could go wrong?
  24. 24. • Delete data • Change data • Add data What could go wrong? • PC crashes!
  25. 25. • Delete data • Change data • Add data In Summary: EVERYTHING! What could go wrong? • PC crashes!
  26. 26. Alternative 1 – The landlord
  27. 27. Alternative 2 – The blockchain
  28. 28. Alternative 2 – The blockchain  Everyone who wants gets a local real-time version  Everyone who wants can approve new transactions  Delete/add/change data one-sided becomes impossible
  29. 29. Scenario 1 I want to add new data!
  30. 30. Scenario 1 I want to add new data!   “Consensus protocol”
  31. 31. THE TRUST PROTOCOL
  32. 32. Scenario 2 I want to delete old data… X X X “Immutable block-chain”
  33. 33. • Each block is indissolubly linked to the previous block • Each block contains data (e.g., a list of payment transactions, contracts, transport data...) • Every couple of minutes, one new block is created and added to the chain • Each new block spreads across the network and is stored on each full node B L O C K C H A I N BLOCK 1 “Genesis” A blockchain is… A sequential chain of blocks BLOCK 2 BLOCK 3 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ List of transactions List of transactions _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ List of transactions Electricity: 180,45EUR _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Groceries: 54,13EUR _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _Water: 190EUR
  34. 34. So how does it really work?
  35. 35. 1. Massively growing new technology 2. Basic principles of a blockchain 3. History & Distributed Ledger Technology
  36. 36. -54%
  37. 37. What’s wrong with the bank? Bank account "IBAN" BE84 2983 2093 2983 Balance on 01/12/2018 10.500EUR Transaction x1 (02/12) 300EUR Transaction x2 (03/12) 200EUR Balance on 10/12/2018 10.000EUR Bank account "IBAN" BE65 2029 4829 1242 Balance on 01/12/2018 3.700EUR Transaction x1 (06/12) +300EUR Transaction x1 (07/12) -1000EUR Balance on 10/12/2018 3.000EUR Send 100 EUR to my friend! ! Delete/change/add data ! Slow ! Privacy ! Can be hacked ! Transaction fees ! Prints money when it wants ! Inefficient ! Inaccessible to many
  38. 38. Enter Satoshi Nakamoto October 31st, 2008
  39. 39. So how does it really work?
  40. 40. So how does it really work? “Distributed
  41. 41. So how does it really work? “Distributed Ledger Technology” “DLT”
  42. 42. Distributed peer-to-peer “Normal” node “Mining” node
  43. 43. 1. Massively growing new technology 2. Basic principles of a blockchain 3. History & Distributed Ledger Technology 4. The bank account on the blockchain
  44. 44. 4-digit Bank PIN + 2FA Bank Account ”IBAN” BE68 3770 9039 4024 Private Key 4a0a5d8e09577cd0e5a9e3 1f4f1cd268b0cf767d14034 074d904b61dd647ecb3 Public Key 0x07E3fa2035f4FE89F1AC 64913bB56ec8C8F1CB74 X Asymmetric (one way) Cryptographic Hashing Banks versus blockchains
  45. 45. Private Key 4a0a5d8e09577cd0e5a9e3 1f4f1cd268b0cf767d14034 074d904b61dd647ecb3 Public Key 0x07E3fa2035f4FE89F1AC 64913bB56ec8C8F1CB74 Asymmetric (one way) Cryptographic Hashing 1:115,792,089,237,316,000,000,000,000,000,000,000,000,000,000,000,000,0 00,000,000,000,000,000,000,000,000 The odds of guessing a private key from a public key = Banks versus blockchains
  46. 46. 28 139,838,160 Guessing ANY private key with a balance Guessing YOUR Ngrave private key In perspective Odds = 1 out of…Bits 231
  47. 47. Distributed peer-to-peer Dear network, can I send: • 1 Bitcoin • From my address 0x07E3fa2035f4FE89F1AC64913bB56ec8C8F 1CB74 • To my friend’s address (other public key)? • For a maximum transaction fee of xyz Bitcoin?
  48. 48. Distributed peer-to-peer Receive Send Transaction history 1 BTC € 3.470,66 Gas fee BTC Amount Recipient address Slow Fast 2,3 Gwei € 0,0133 CONFIRM Go back Outgoing transaction Amount Address “to” Transaction cost
  49. 49. A bitcoin transaction 1 Receive Send Transaction history 1 BTC € 3.470,66 Gas fee BTC Amount Recipient address Slow Fast 2,3 Gwei € 0,0133 CONFIRM Go back    BLOCK X BLOCK X + 1  Alice wants to send 1 Bitcoin to Bob. 32 The transaction is broadcasted to the Bitcoin blockchain. Computers called “miners” start to compete to solve a math puzzle. 4 The first miner to solve the puzzle writes the block with the request. Once the answer is verified and a majority of miners approve the block, the miner who wrote the transaction gets paid in Bitcoin. 5 Alice’s transaction gets added to the blockchain. 6 7 Bob receives 1 Bitcoin. Transaction successful 0x829da02499bb52…TxHash 0x1D821A19C7D9B…Recipient Go back to homescreen
  50. 50. Distributed peer-to-peer anonymized Transaction successful 0x829da02499bb52…TxHash 0x1D821A19C7D9B…Recipient Go back to homescreen
  51. 51. 1. Massively growing new technology 2. Basic principles of a blockchain 3. History & Distributed Ledger Technology 4. The bank account on the blockchain 5. How does it really work?
  52. 52. 57 DEMO
  53. 53. DISTRIBUTED DATABASE TRANSPARENCY WITH PSEUDONYMITY PEER-TO-PEER TRANSMISSIONS Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or information. IRREVERSIBILITY OF RECORDS COMPUTATIONAL LOGIC Communication occurs directly between peers (no central node). Each node stores and forwards information to all other nodes. Every transaction and its associated value are visible to anyone with access to the system. Each node or user on a blockchain has a unique 30-plus-character address that identifies it. Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence ”chain”). The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. Users can set up algorithms and rules that automatically trigger transactions between nodes. 5 PRINCIPLES OF BLOCKCHAIN
  54. 54. 5 PRINCIPLES OF BLOCKCHAIN    DISTRIBUTED DATABASE TRANSPARENCY WITH PSEUDONYMITY PEER-TO-PEER TRANSMISSIONS Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or information. IRREVERSIBILITY OF RECORDS COMPUTATIONAL LOGIC Communication occurs directly between peers (no central node). Each node stores and forwards information to all other nodes. Every transaction and its associated value are visible to anyone with access to the system. Each node or user on a blockchain has a unique 30-plus-character address that identifies it. Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence ”chain”). The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. Users can set up algorithms and rules that automatically trigger transactions between nodes.
  55. 55. 1. Massively growing new technology 2. Basic principles of a blockchain 3. History & Distributed Ledger Technology 4. The bank account on the blockchain 5. How does it really work? 6. Smart contracts!
  56. 56. SMART CONTRACTS Agreement Automated + enforceable No downtime No censorship, fraud No middleman Transaction cost  Create markets, store registries of debts or promises  Move value around SHARED GLOBAL INFRASTRUCTURE * dApps = computer code Legally binding 
  57. 57. A use case on Ethereum ORACLE RA2145 02082018 0711 DA0088 02082018 0809 … SN2344 02082018 2241 … AF1112 02092018 2300 Smart contract  Name = Vitalik Buterin  Flight = SN2344 BRU -> JFK02082018 2035  Cost = 0.1 ETH  If departure = >1h-1h59 : 0.15 ETH >2h-2h59 : 0.35 ETH >3h : 0.5 ETH  Then, deposit : 18c5ajtw2VYs8nfVhEMecy5yNBob8U2MtB
  58. 58. Beyond banks – Honduras & protecting people’s ownership rights
  59. 59. ? X ! Before the blockchain
  60. 60. ? X ! BLOCK 1 “Genesis” BLOCK 2 BLOCK 3 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Owner X @2007 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Owner Y @2016 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Owner Z @2019 Before the blockchain With the blockchain
  61. 61. …creating a TRUE sharing economy
  62. 62. …ending the remittance rip-off
  63. 63. …recapturing our identities
  64. 64. …ensuring compensation for the creators of value
  65. 65. 1. Purchase car insurance on smartphone (digital signature) 4. Smart car sensors (IoT) send a signal to the insurance 5. Smart contract notifies the repairs all expenses are covered 2. Initiate smart contract & confirm to customer Transaction successful 0x829da02499bb52…TxHash 0x1D821A19C7D9B…Recipient Go back to homescreen 6. Car is fixed 7. Police is notified You & your car Insurance Repair agency Policy & regulator 3. Data is sent for regulatory reporting  Fast, real-time  Less paperwork  Transparency  Multi-party contracts  Less insurance fraud  Simplified audit trails  Reduced disputes  Easy admin  Direct pay  Lower costs  Streamlined claims The simplified process
  66. 66. 0 Chain of hash value’s (General ledger) Hash* Hash* Hash* Solving the equation is called “Data mining” 1 Digital wallet Digital wallet Internal databases 0. Omnium insurance is purchased via his smartphone for his new car 1. Car accident 2. Smart car sensors send a signal to the insurance SmartContract initiated 3. Insurance providers notifies the repairs that all expenses are covered Signature Sensors of the car Client signs contract and with it approval to share his data (personal data, car data,…) (i.e. creation of a block) SmartContract triggered External database = Distributed ledger Distributed ledger Invoice Hash* Paid 2 1 2 3 3 4 Closed (Distributed) Permission ledger Regulator 5 Data is being validated for authentication The real process Source: Ruben Merre analysis @Hedera Consulting
  67. 67. Product development & distribution Pricing / Underwriting Payments & Collections Claims Policy / Administration & Back-office Risk capital & Investment mgmt Value chain B2B B2C Ø Onboarding of new customers Ø Verification of policy- holder identity Ø Privacy protected European identity platform: online exchange & management of personal data Ø KYC / AML / GDPR Ø Smart contracts to automate catastrophe swap transactions Ø Data availability for re-insurers Ø History checking of individual precious stones Ø Data on insured goods Bridge with IoT (e.g. sensors) to automate transfer instructions P2P flight insurance P2P insurance groups / CrowdInsurance Pay-as-you-go / usage based car insurance Blockchain social networks reputation analysis to underwrite rental assurance Insurance for P2P goods sharing (shared economy) Insure as a group and get cash-backs Unemployment insurance via LinkedIn Micro-insurance (e.g. for Uber or Airbnb) Blockchain as a Service Real-time credit insurance against the non-payment of invoices Anti-fraud & counterfeit verification Payment infrastructure Smart contracts evaluation for payments Claims triggering & handling automation Translation of one’s DNA in blockchain code (Bitcoin) Claims recording for dividing cost between insurer & re-insurer Ø Side-chains to connect different blockchains Ø Process optimization / automation Customer segmentation Industry deep-dive: Insurance Source: Ruben Merre analysis @Hedera Consulting
  68. 68. Quiz time
  69. 69. 1. Massively growing new technology 2. Basic principles of a blockchain 3. History & Distributed Ledger Technology 4. The bank account on the blockchain 5. How does it really work? 6. Smart contracts! 7. About
  70. 70. Welcome to the wallet revolution. @ngrave_official Ngrave; Ruben Merre (CEO) https://www.ngrave.io/

Editor's Notes

  • 600 billion dollars per year on a global basis is being sent cross-border back to families and so on. Sending just a hundred dollars takes days to send it, it takes hours to get it through, and it costs between 10 and 20 bucks to actually send it back to her family.
  • Identitty basically is data that we collect ourselfves. It is our virtual self, your virtual you. And the virtual you today, is not owned by you.
    And today part dedicated blockchain technology players are trying to create this black box, with data solely about you. To give it back to you so that you can decide what shred of information you want to be disclosed to whatever counterparty you’re dealing with. For instance, in a lot of transactions, the seller doesn’t even have to know who you are, they just need to know that they got paid. And this new idea can help you to 1) monetize your data; and 2) get your privacy back under your own control and manage it responsibly.

    When you go to a club and they ask your age, you don’t longer have to show your full pass disclosing your age – hey ladies. You can just affirm that you are over 18.
    When companies want to do research, they can do so on anonymized data, without finding out who you are, and if you participate you can even monetize the fact that you are acrtually providing that information.
  • Finally, there are a whole number of creators of content who are not receiving the right compensation. Because the whole concept of intellectual property is broken. Today if you write a hit song worth with 1 million views, you get 36 dollars. All these intermediaries today are taking their part of the pie. And where years ago you could sell a million records and get 45 million dollars, today you get 36 dollars.
  • Transparency within agreements
    Verify property information, update and decentralize records
    Reduce paperwork, digitize transactional processes
    Record, track, transfer land titles

    The problem of inequality stems from wealth re-distribution. How can we pre-distribute it. Could we change the way wealth is distributed in the first place by democratizing wealth creation? Engaging more people in the economy and ensuring that they get fair compensation.

    Did you know that 70% o the people in the world who own land have a tenuous title to it. Piece of paper that you own the farm, but the dictator’s government computer says my friend owns your farm. This is the number one issue in terms of economic mobility. Even more important than having a bank account. Because if you don’t have a valid title on your land you can’t borrow against it and you can’t plan for the future.
    So today, companies are working with governments to put land titles on a blockchain. And once it is there, it is immutable. You can’t hack it. This creates the conditions for prosperity for potentially billions of people.
  • The conditions of prosperity for billions of people.
  • People talk about airbnb, uber, and so on to talk about sharing wealth.
    But these companies are not really sharing, in fact they are successful precisely because they are not sharing. They aggregate services together and sell them. What if rather than airbnb being a 25B dollar corporation. There was a blockchain bnb on the blockchain and it was essentially owned by all the people who have a room to rent. And when someone wants to rent a room they go on the blockchain database and fill in all their criteria, and then the blockchain helps with the contracting and everything that is required, including the payments, and even repututation. Because if someone rates a room, it is there on the blockchain and it is immutable.

    This could be good for prosperity.
  • Control of ownership rights
    Anti-piracy / copyright infringement
    Use of smart contracts for artist compensation/legal proceedings
    Payments processing — cryptographic, secure, and anti-3rd party (this opens up content availability internationally)
    When you listen to a youtube video, every second you watch is directly paid via the blockchain

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