This document discusses blockchain technology and its potential applications. It begins by explaining key concepts of blockchain like distributed ledgers, cryptography, consensus models, and smart contracts. It then outlines several potential use cases for blockchain across different industries like financial services, property, government services, and the internet of things. Finally, it discusses factors that will influence the future of blockchain like interoperability, scalability, and security.

1. Blockchain
A new disruption in financial servies?

2. 2
Bitcoin :
Currency and technology
• Mining
• 21
million
• Volatile
value
• >50%
in
hands
of
880
individuals
• Litecoin,
Ripple,
Zerocoin
Currency
“Satoshi
Nakamoto”
2009
• Blockchain
• Distributed
shared
ledger
• Cryptograhy (SHA-­‐256,
PKI)
• Consensus
model
• Smart
contracts
Technology

3. 3
Party D’s Records Bank Records
Party C’s Records Auditor Records
Party B’s Records
Party A’s Records
API-integrations
Hack
Ledger
Ledger
Ledger
Ledger
Ledger
Ledger
Inefficient,
expensive,
error
sensitive
and
vulnerable
Information
&
asset
exchange
in
business
networks
– Separate
ledgers

4. 4
Information
&
asset
exchange
in
business
networks
– Shared
ledgers
Party D’s Records Bank records
Party C’s Records Auditor records
Party B Records
Party A’s Records
Ledger
Ledger
Ledger
Ledger
Ledger
Ledger
Consistency,
efficiency,
security
and
resilience

5. 5
4
key concepts of
blockchain
Distributed
shared
ledger Cryptography
Consensus Smart
contracts

6. 6
4
key concepts of
blockchain
-­‐ Distributed
shared
ledgers
• Group
of
replicated logs/databases
(nodes)
• Transactions
distributed
in
blocks
• All
nodes
hold
all transactions
• Parties
identified with
public
key
(=
anonymised)
• Accessibility of
transactions
depending
on
blockchain implementation
• Resilient for
failure
of
one
or
more
nodes
• Group
of
nodes
operate
tamper
proof

7. Nodes of
Bitcoin ledger
7

8. 8
Visualisation of
Bitcoin
flows
between
participants
Source
:
Elliptic.co

9. 9
4
key concepts of
blockchain
– Cryptography (1/2)
Hashing
Creation
of
a
bit
string
(digest)
representing
integrity
of
content
other
string.
Changing
one
character
in
the
original
string
results
in
complete
different
has.
Changing
multiple
characters
in
original
string
that
results
in
the
same
hash
requires
large
amount
of
processing
power
for
a long
period
of
time.
Sample
sentence
to
explain
how
SHA256
works
Sample
sentence
to
explain
how
SHA256
works.
79e8a584005254f7717547b5829fd01fa
6c6831bd92a2d28c93305636c71b499
c19617618972f1dc643b2bb7075c7cac
ac3aea970581ca5c6ec30aee59a74c07
Extra
dot
Input
data
Hash
value
(32
bytes)
Hashing Hashing

10. 10
4
key concepts of
blockchain
– Cryptography (2/2)
Public
&
private
keys
and
wallets
Two
large
prime
numbers
that
have
a
mathematical
relation
with
each
other.
A
string
encrypted
with
one
key
can
only
be
decrypted
with
the
other.
One
key
needs
to
be
kept
private,
the
other
one
can
be
made
publicly
known
so
that
it
can
be
used
by
other
parties
to
exchange
data
with you
in
a
secure
manner.
Private
keys
need
to
be
stored
that
it
is
accessible
only
for
owner.
This
can
be
done
on
personal
devices
(PC,
smart
card,
USB
stick, phone,
…)
or
remotely
with
a
service
provider
(cold
and
hot
wallets).
Encryption
Scrambling
of
clear
text
with
the
public
key
of
the
recipient
so
that
the
holder
of
that
private
key
is
the
only
one
that
can descramble
the
message.
This
is
used
to
guarantee
the
confidentiality
of
the
data
exchanged.
Confidential
text
to
be
secured
by
encryption a66b311c9b158c1e55d4e6cc555016d2e554ac….
Encryption
Confidential
text
to
be
secured
by
encryption
Decryption
Private
keyPublic
key PKI
management
Digital
signature
Encryption
of
hash
representing
of
original
data
to
be
secured
with
the
private
key
of
the
sender
(called
digital
signature)
that
is
decrypted
by
the
recipient
with
the
public
of
the
sender.
If
the
decrypted
hash
matches
the
content
of
the
original
data
it
implies
two
things.
First,
the
encryption
can
only
be
performed
with
the
private
key
corresponding
with
public
key
and
secondly,
the
original
data
can’t
be
tampered
with.
2100f86450888dc01725af78a0e70415… 2626043be7d913ff5d8520b39253eef6240e31d…
Encryption
2100f86450888dc01725af78a0e70415…
Public
keyPrivate
key PKI
management
Hash
of
data
to
be
secured Hash
to
be
checked
with
original
data
Decryption

11. 11
4
key concepts of
blockchain
– Consensus
• Consensus
=
Majority of
nodes
agree
on
validity
of
transactions
• Includes
validation
on
double-­‐spending
• Permissionless (public)
vs.
permissioned (private)
blockchain setup
• Proof-­‐of-­‐work
/
proof-­‐of-­‐stake
the
proof
validity
of
node
(only
applicable
for
permissionless network)

12. 12
4
key concepts of
blockchain
– Smart
Contracts
• Business
logic that
can
be
assigned
to
a
transaction
on
the
blockchain
• Acts
as
a
‘notary’ of
blockchain transactions
• Holds
conditions under
which
specific
actions
can/must
be
perfomed
• Facilitates
escrow services
• Can’t
be
modified without
predefined
permissions

13. 13
Sample
case
of
blockchain
for smart
contracts

14. 14
Source
:
Financial
Times
How
a
blockchain
works?

15. Value
of
blockchain technology
15
Reduction
of
costs
and
complexity Shared
trusted
transactions
Resilience Secure Auditability
Reduction
of
errors

16. 16
Potential of
blockchain
extends across a
wide range
of
application areas
Financial
Services
• Payments
• Securities
registration
&
processing
• Lending
Property
• Real
estate
• Intellectual
property
• Cars
Governmental
services
• Voting
• Registrations
(passports,
driving
license)
• Permits
Identification
&
Security
• Party/device
registration
• Authentication
• Access
control
Trade
• Document
exchange
• Asset
exchange
• Escrow
services
• Trade
agreements
Internet
of
Things
(IoT)
• Autonomous
devices,
such
as
• Cars
• Drones
• Robots

17. We
are
at
the
threshold
of
a
massive
explosion
in
the
history
of
computing
Devices are becoming significantly more intelligent and connected
17

18. 18
Role of
blockchain
technology in
Internet
of
Things

19. *
=
Autonomous
Decentralized
Peer-­‐to-­‐peer
Telemetry
19
ADEPT*
– PoT of
IBM
and Samsung
on
IoT applying blockchain
technology
ibm.biz/empoweringtheedge

20. Key differentiating elements between blockchain
protocols:
• Permission model
(private
vs.
public)
• Consensus
approach
• Smart
contracts
• Extensibility &
programmability
• APIs
• Scalability &
latency
• Resource
consumption
Multiple
implementations
of
blockchain
related
protocols
:
• Bitcoin
• Ethereum
• Ripple
• Stellar
• Tendermint
• Factom
• Hyperledger
• …and
many
more
There is
not one blockchain
protocol
20

21. Key factors
that influence the future of
blockchain,
crypto
assets and smart
contracts
Interoperability
&
standardisation
-­‐ Messages
-­‐ Consensus
-­‐ APIs
Scalability
-­‐ Volumes
-­‐ Response
times
Vulnarability
-­‐ DDoS
attacks
-­‐ Confidentiality
Regulatory
-­‐ Issuance
of
crypto
assets
-­‐ Compliancy
rules
-­‐ Oversight
21

22. Deploy your
blockchain
fabric
of
choice
Help
you
design
and
build
your
POC
+
+
Help
guide
your
blockchain
exploration
Research Middleware Services Cloud iX Design &
Development
IBM’s value add in
blockchain

23. 1. Discuss
Blockchain
technology
2. Explore
customer
business
model
3. Asses
Blockchain
suitability
1. Show
Blockchain Application
Demo
2. Explain
technology
usage
3. Validate
Client
Interest
1. Understand
Blockchain
concepts
&
elements
2. Hands on
with
Blockchain
technology
3. Demo
customization
using
Design
Thinking
1. Explore customer
specific
business
model
2. Design,
build
&
iterate
approach
3. Builds
limited
scope
deployable
solution
2
hours
meeting 2
hours
demo 1
day
workshop 2-­‐6
weeks
Remote
or
face
to
face Remote
or
face
to
face Face
to
face Co-­‐located joint
team
Fee of
charge Free
of charge Free of
charge For
charge
Conversation Demonstration
Proof
of
Concept
Proof
of
Technology
Overview IBM
blockchain
engagement
model

24. Sample
agenda
1-­‐day
workshop
• Introduction (10
mins)
• Technology
Overview(50
mins)
• Break (15
mins)
• Understand (90
mins)
• Lunch (60
mins)
• Explore (90
mins)
• Break (15
mins)
• Prototype
(30
mins)
• Evaluate (60
mins)
UNDERSTAND
EXPLORE
PROTOTYPE
EVALUATE

25. Is blockchain going to be the next big disruptor for…
… information technology
… the economy
… the society
… our lifestyle
?
25