Venture Cafe 2023 Presentation Phoenix Arizona Scott Carlson 7/20/2023

1. What are Blockchain & Tokens
and are they useful?
July 20, 2023 – Scott Carlson, scott@savyadvisors.com

2. IN A WORLD WHERE
EVERYTHING IS BECOMING
DIGITAL….
HOW DO YOU GUARANTEE THAT
YOU CAN TRUST EVERY
ELECTRONIC TRANSACTION?

3. https://www.ozy.com/

4. Let's imagine… building apps that are..
100% ‘Tamper Proof’
Operates in ‘Human-Time’
Rely on ‘No Humans’
Guaranteed ‘Truth’

5. "He who trusts all things to chance,
makes a lottery of his life." - Unknown

7. The goal of blockchain or “distributed ledger” is to
allow digital information to be recorded and
distributed, but never edited only appended
Blockchain technology was first outlined in 1991 by
Stuart Haber and W. Scott Stornetta, two researchers
who wanted to implement a system where document
timestamps could not be tampered with.

8. HOW IS THIS DONE? (SPOILER: MATH)

9. Yeah, so what IS a blockchain
• A big long list of data/records/transactions (ledger)
• Managed by software running custom code (open-source)
• Secured by mathematical algorithms (well-known)
• Protected by mathematical keys (impossible to crack)
• Installed on LOTS of computers (secured)
• Protected from tampering by distributing to many many other computers
that all agree on what happened and making it so (Consensus)

10. Main Benefits of Blockchain
● Decentralization: Unlike traditional systems, blockchain doesn't rely on a central authority. This decentralization reduces
the risk of corruption, censorship, and single points of failure.
● Transparency: Every transaction on a blockchain is verifiable/visible and cannot be altered or deleted. This transparency
builds trust.
● Security: Blockchain uses advanced cryptographic techniques to ensure the security of transactions. Hard to Hack.
● Efficiency: Blockchain can automate and streamline processes, removing intermediaries, which can lead to cost savings
and increased efficiency.
● Innovation: Blockchain technology has the potential to foster new business models and applications, such as
decentralized finance (DeFi), smart contracts, and decentralized autonomous organizations (DAOs).

11. Blockchain: Why do you even care?

12. Human-driven processes simply
cannot keep up with the digital,
automated, AI-driven, technology
of today. We must develop new
systems that keep up with the
“speed of now”

13. Let's build an automated system

14. First, let’s build some
programs and logic to execute
transactions and make them
happen

15. Smart Contracts
Smart contracts are lines of code that are stored on
a blockchain and automatically execute when
predetermined terms and conditions are met, such as when
a payment happens, a token needs to move, or a
calculation must be made. Could be ‘legal”

16. Now, let’s make digital objects

17. Tokenization of Assets or Money
The tokenization of assets refers to the process of
issuing a blockchain token that digitally represents a
real-world object, like a lottery ticket, painting, carbon
credit, raw material. Anything can be tokenized

18. Crypto Token (unique)
A token meant to represent an OBJECT. This object
is unique in the world, and there is truly only one.
known as: NFT – Non-Fungible Token

19. Crypto Token (NOT unique)
A token meant to represent a type of thing.
This object is NOT unique in the world, and it usually
serves a specific purposes – like a loyalty point, or an
energy token. Generally used to “pay for the service”
or kept within a certain network of partners.
Known as: “utility token” or “Fungible Token”

20. Cryptocurrency (money)
A token meant to represent a monetary value,
generally used to pay for goods and services, just like
real FIAT currency. USDC USDT ($1 USD)
Tokens only have guaranteed value if there’s money
in the bank backing it 1:1
(1 million in the bank = 1 million tokens)

21. Where do we put our digital
objects now that we have
them?

23. Managed Wallets: Custody of Assets
The safekeeping, administration and safeguarding of
crypto assets or private cryptographic keys used to
hold, store or transfer crypto assets for others.
A “Safety deposit box” for your digital things

24. What is in your wallet ?
● Nothing actually
● It represents your “Key” which you gives you access to a blockchain, allows
you to assert authority and “sign” things
Your key gives you access to
● Your “Digital Tokens”

25. Now let’s understand our
participants

26. Know Your Customer (KYC)
A method of proving the real-world identity of a
human or a company, usually by providing
appropriate country documentation (passport)
Identity can be stored as a token in your wallet

27. Our Digital Trust System
Legal “Smart Contracts” (process rules / logic)
Tokens (items)
Wallets (storage/keys)
KYC (identity)
Blockchain (ledger)

28. Examples

29. DBacks 50/50: Digital & Automated
Users purchase unique tickets for a drawing and if
they get picked, they get 50% of the total money.
Prove to me that the winner didn’t cheat, the money
is actually paid out, and the “social good” percentage is
actually sent to the charity and the winner
Public Ledger
Smart
Contract
wallet
Smart Contract Logic Tokens Smart
Contract
Smart Contract Logic

30. IS IT A GOOD IDEA
TO AUTOMATICALLY SEND
WINNING AMOUNT TO THE
WINNER IN EVERY
CIRCUMSTANCE?

31. HOW HORRIBLE WOULD IT BE
TO AUTOMATICALLY ‘IDENTIFY’
THE WINNER AND SEND THE
APPROPRIATE TAXES TO THE
LOCAL GOVERNMENT(s) UPON
WINNING?

32. Supply
Chain

33. WHAT IF THE DATA IS MESSED UP
HOW DO HUMANS CREATE
‘EXCEPTION’ HANDLING FOR
EDGE CASES AND “LIFE”
HAPPENING

34. What about voting ?

35. Guaranteed, Trusted, Voting System
● “Man” launches the “Vote Prez” Blockchain Application
● Using location, facial recognition, and ID, “Man” is “Identified” using KYC
● Bob Smith now, using his location and place of residency can “vote”
● Bob chooses the election he wants to vote in and sees the candidates
● Smart contract logic verifies that he is eligible to vote in that election
● Bob selects his votes, verifies his choices, and clicks submit to finalize
● Smart contract logic creates a “proof” that Bob sent these votes but does
not specifically identify Bob, just his “proof token”
● The “ledger” now shows that Bob voted, and he cannot vote again

36. Do you trust ?
● If we can build a legal set of rules for what “I have voted” means
○ Why not automate it?
○ Why not put it on a ledger that’s immutable and unchangeable?
○ Why not use government databases to automatically KYC
○ Why not gamify voting, and get voting closer to 100%
○ Why not reward voting with fun “tokens” like stickers
○ If you can docusign to buy a $1M house, why can’t you “sign” to Vote ?
The technology is not the problem, humans are the problem

37. Most blockchain problems of today are human we
can’t decide if its “legal” or “Okay” to fully
automate the processes of the world

39. TRUSTED APPS using
ACCURATE DATA sending to
TRUSTED PARTIES ensuring
DATA SECURITY and
UNMODIFIABLE RESULTS with
OPERATIONAL CONTROLS which
ENFORCE LAWS and IDENTITY

40. Well-Known Blockchains

41. The Bitcoin blockchain is used to
transfer ownership of bitcoins (BTC)
from one owner (wallet) to another
(wallet) and then prove that it
happened
Mining
Bitcoin (BTC)

42. The Ethereum blockchain is used to
transfer ownership of any type of
token from one wallet to another
wallet using a set of rules in a smart
contract and then prove that it
happened
NFT
pay
Gas
Ethereum (ETH)

43. Ripple (XRP)
Ripple is both a digital payment protocol and a cryptocurrency (XRP). The
Ripple platform is an open-source protocol that's designed to allow fast and
cheap transactions. Unlike Bitcoin, which was created to be a decentralized,
peer-to-peer currency system, Ripple was created with the idea of establishing
a decentralized, digital system for real-time payment, remittances, and
currency exchange.
Ex: It costs about 1 cent to send any amount of money to a foreign country

44. Dash (DASH)
One of the main selling points of Dash is its transaction speed. Dash uses a technology
called InstantSend which allows payments to be confirmed in less than a second, making it
much faster than Bitcoin and many other cryptocurrencies.
Dash also offers a feature known as PrivateSend, which gives users the option to send
transactions privately by mixing, making transactions untraceable. This increased level of
privacy compared to other cryptocurrencies is another key distinguishing feature of Dash.
Furthermore, Dash is self-funding and self-governing. It operates on a model where the
block rewards are split between miners, masternodes, and a treasury. Miners receive 45%
of the block reward, masternodes (which provide the InstantSend and PrivateSend
functions) get another 45%, and the remaining 10% goes to a treasury for funding the
development and marketing of Dash.

45. Should you use a blockchain ?

46. Open Questions – For your Consideration
Can technology like blockchain make the world easier and faster?
Is transparency a good thing, or are there reasons we should hide
certain information?
How much digital Proof, is proof enough (identity, randomness)?
What do we do to criminals who steal our digital things?
Can new business models be built on top of digital objects ?

48. Thank You
Scott Carlson
Savy Advisors
scott@savyadvisors.com
+1-602-321-6379
Bespoke Cybersecurity Consulting
Blockchain / Web3
Artificial Intelligence
Privacy
Compliance
Complex Systems
Regular Cybersecurity Things