- By 2027, 10% of global GDP is projected to be stored on blockchain platforms according to one estimate. Blockchain technologies could reduce banks' infrastructure costs by $15-20 billion per year by 2022. - Blockchain has the potential to save the global financial industry up to $110 billion annually according to McKinsey. By 2025, a government may collect taxes for the first time using blockchain according to the World Economic Forum. - Early blockchain and digital currency projects failed due to issues like central authorities as single points of failure, fraud, and the double spending problem. The blockchain solved these issues through decentralization, an immutable shared ledger, and cryptographic security without the need for central authorities or

1. BLOCKCHAIN
DEMYSTIFICATION
Mr. BELLAJ BADR
THE DISRUPTIVE TECHNOLOGY
MCHAIN CTO

2. By 2027, 10% of global GDP is likely to
be stored on blockchain platforms.
”
Blockchain technologies could
reduce banks' infrastructural
costs by $15-20bn a year by
2022.
Santander
”
”
Gartner’s Top 10 Strategic
Technology Trends for 2017
”
”
By 2025 :
Tax collected for the first time
by a government via a
blockchain
WEF
Blockchain has potential to
save global financial
industry up to $110bn,
McKinsey ”
”

3. WHY THE BLOCKCHAIN?
Understanding the problem
is 1/2 of the solution
”
”

4. WHY THE BLOCKCHAIN?
CHINA 800 AD 700 BC Ancient Lidya Turkey
October 1994, Stanford Federal Credit Union: Internet banking
CONTINUING THE INTERNET REVOLUTION
DIGITAL ERA DIGITAL
CURRENCY
Rai, or stone money

5. Failure
Ecash
‘1983-1998’
Failure
E-gold
‘1996- 2007’
Failure
Liberty Reserve
‘2006-2013’
WHY THE BLOCKCHAIN?

6. WHY THEY
FAILED
• CENTRAL AUTHORITY (SPOF)
• FRAUDS
• DOUBLE SPENDING PROBLEM
?
WHY THE BLOCKCHAIN?
Currency issuance, transaction storage, fight frauds.

7. CENTRAL
AUTHORITY
FRAUD
SPOF
VIRTUAL
CURRENCY
WHY THE BLOCKCHAIN?

8. RESHAPE THE PROBLEM : VIRTUAL CURRENCY
UNSTOPPABLE
• How to create an unstoppable cash system
without any Central authority?
TRUSTFULL
• How to establish the trust in such system
if there is no authority behind?
UNFORGEABLE
• How to avoid the double spending
problem?
SOLUTION 2008 BLOCKCHAIN
WHY THE BLOCKCHAIN?

9. Failure
Ecash
‘1983-1998’
Failure
E-gold
‘1996- 2007’
Failure
Liberty Reserve
‘2006-2013’
Success
Bit Gold
Success
Bitcoin
‘Since 2008’
Designed in 98
WHY THE BLOCKCHAIN?

10. WHAT IS THE BLOCKCHAIN?

11. A SINGLE
SOURCE OF
TRUTH
WHAT IS THE BLOCKCHAIN?
Definition N1

12. THE TRUST
MACHINE
WHAT IS THE BLOCKCHAIN?
Definition N2

13. Ledgers, the foundation of
accounting, are as ancient
as writing and money.
A DISTRIBUTED LEDGER
WHAT IS THE BLOCKCHAIN?
Definition N3

14. WHAT IS THE BLOCKCHAIN?
• A blockchain is a tamper-proof,
shared digital ledger that records
transactions(history) that take
place between the peers in a peer-
to-peer network.
• All the confirmed and validated
transaction blocks are linked and
chained from the beginning of the
chain to the most current block,
hence the name blockchain.
BLOCK CHAINDefinition N4

15. In the Context of protocol stack, cryptocurrency is a blockchain service
15
THE DIGITAL CURRENCY
CONSENSUS PROTOCOL
TRANSACTION PROTOCOL
THE LEDGER : SHARED DATA
LAYER
GMAIL
SMTP – SIMPLE MAIL
TRANSFER PROTOCOL
TCP/IP – TRANSMISSION
CONTROL
PROTOCOL/INTERNET
PROTOCOL
Application
Layer
Application
Protocol Layer
General
Protocol Layer
HOW IT WORKS?
STACK VUE (Blockchain System):
Definition N5

16. FEATURES
DECENTRALIZED
CONSENSUS
Ensure Consensus
within a decentralized
Network.
TRANSPARENCE
& ANONYMITY
DATA is available to the
participants.
Users are anonymous
IMMUTABILITY
Data is stored for ever
in the blockchain and
can’t be altered
*The genesis blockchain
WHAT IS THE BLOCKCHAIN?

17. HOW BLOCKCHAIN SYSTEM
WORKS?

18. INTERBANK
SETTLEMENT
DEBIT CREDIT
Balance 100$
Transfer 100$
DEBIT CREDIT
Balance 200$
Balance 100$Transfer 100$
DEBIT BANK A’s ACCOUNT 100$
CREDIT BANK B’s ACCOUNT 100$
TRANSACTION
BA
HOW IT WORKS?

19. N5545 N5546
Block validated by the network
and added into the blockchain (updated)
TX+Signature
Transaction cryptographically
signed and sent to the network
Nodes
ADDRESS:
1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2
ANNONYME
Transaction is complete
N5547
Block processed(Mining Process)Verified and included in a
block (timewindow)
TXj+Signature
TXi+Signature
N5547
HOW IT WORKS?

20. HOW IT WORKS?
BLOCKCHAIN
SINGLE BLOCK
SINGLE TRANSACTION

21. HOW IT WORKS?
LET’S DIVE DEEP

22. MORE DETAILS
• 1 Vote = 1 CPU (Proof-of-work), Byzantine general problem.
• Only miners add Blocks (Data) to the blockchain.
• Everybody could become a miner.
• One miner is rewarded at time and its block is added to the blockchain.
HOW IT WORKS?

23. The computing power of the Bitcoin
network is 7468 times higher than the
one of the cumulative 500 world
supercomputers.
X7500
THE POWER OF DECENTRALISATION
HOW IT WORKS?

24. THE POWER OF DECENTRALISATION
BTC HASH RATE : 3,576,533,297 GH/S
194 MH/S
HOW IT WORKS?

25. A SINGLE
SOURCE OF
TRUTH
WHAT IS THE BLOCKCHAIN?

26. $27,703,262,823
Total Market Cap

27. THE POWER OF DECENTRALISATION

28. THE POWER OF DECENTRALISATION

29. THE POWER OF DECENTRALISATION

30. BENEFITS OF
THE
BLOCKCHAIN

31. . EMPOWERED USERS
PROCESS
INTEGRITY
DISINTERMEDIATION
& TRUSTLESS
EXCHANGE
DURABILITY,
RELIABILITY, &
LONGEVITY
HIGH DATA
QUALITY
TRANSPARENCY &
IMMUTABILITY
BLOCKCHAIN BENEFITS?

32. ECOSYSTEM
SIMPLIFICATION
COSTS
REDUCTION
TIME
REDUCTION
SMART
CONTRACTS
BLOCKCHAIN BENEFITS?

33. SMART
CONTRACT
“A smart contract is a program that
runs on the blockchain
and has its correct execution
enforced by the consensus
protocol”
They enable trustless financial
services like loans,
micropayments, and more.
Get rid of intermediaries and third
parties
BLOCKCHAIN BENEFITS?

34. BLOCKCHAIN BENEFITS?
SMART
CONTRACT

35. USE CASE :
LETTER OF
CREDIT
TRADE FINANCE

36. CREDIT PERIOD OF 30 DAYS, 60 DAYS, 90 DAYS, 120 DAYS
USE CASE : LETTER OF CREDIT

37. LETTER OF CREDIT AS SMART CONTRACT :
• Accelerating payment and simplifying the creation
and delivery of trade payment documentation.
USE CASE : LETTER OF CREDIT

38. Months to hours
No more Papers
USE CASE : LETTER OF CREDIT

39. BLOCKCHAIN
ACCESS
CONTROL
AUTONOMOUS
PAYMENT
REAL ESTATE
INTELECTUEL
PROPRETY
TITLE RECORD
LENDING(p2p)
PAYMENTS
TRADE
AGREEMENTS
ASSET EXCHANGE
DOCUMENT EXCHANGE
VOTING
DOCUMEREGIST
RATIONNTS
PERMITS
TELE-ATTORNEY
SERVICES
USE CASES : BLOCKCHAIN APPLICATIONS
SECURITIES REGISTRATION
EQUITY DERIVATIVES
MICRO FINANCE
SMART CITY
Know Your Customer
Anti Money Laundering
Management
REMITTANCE STOCK
EXCHANGE

40. BLOCKCHAIN
STATE

41. 2016-2017
2018-2019 2020
EARLY ADOPTION
GROWTH MATURITY
BLOCKCHAIN STATE
EXPLORATION
2013-2015
GLOBAL
BLOCKCHAINS

42. TUNISIA
2015, Tunisian poste adopted an
internal blockchain system with
cryptocurrency (E-dinar)
SENEGAL
Introduce a Blockchain-Based National Digital
Currency eCFA. Announced in 2016, the digital
currency will be legal tender just as the
current currency, CFA Franc. It will be
introduced in all West Africa.
SOUTH AFRICA :
Barclays Africa and its UK parent company
Barclays plc completed the world’s first trade
finance transaction using blockchain
technology.
South African Reserve Bank (SARB) plans to
launch a blockchain-based digital version of
the South African Rand
KENYA :
Kenyan Government is
implementing Blockchain-based
education management system
that would make it hard to forge
academic certificate
NIGERIA :
Nigerian government offers
support to blockchain
development group
BLOCKCHAIN STATE (AFRICA)

43. PRIVATE
BLOCKCHAIN
PUBLIC
BLOCKCHAIN
PERMISSIONED
BLOCKCHAIN
PERMISSIONLESS
BLOCKCHAIN
BLOCKCHAIN STATE

44. Nascent
technology
Resolving challenges such as lack
of standards transaction speed, the
verification process, and data limits
will be crucial in making blockchain
widely applicable.
Uncertain regulatory
status
Because modern currencies have
always been created and regulated by
national governments, blockchain and
Bitcoin face a hurdle in widespread
adoption by pre-existing financial
institutions if its government regulation
status remains unsettled.
Cost & volatility
Blockchain offers tremendous
savings in transaction costs and time
but the high initial capital costs could
be a deterrent.
Control, security,
and privacy
While solutions exist, including private
or permissioned blockchains and
strong encryption, there are still cyber
security concerns that need to be
addressed before the general public
will entrust their personal data to a
blockchain solution.
Integration
concerns
Blockchain applications offer
solutions that require significant
changes to, or complete replacement
of, existing systems. In order to make
the switch, companies must
strategize the transition.
Cultural adoption
Blockchain represents a complete
shift to a decentralized network
which requires the buy-in of its
users and operators.
Scalability
Data inside a blockchain
cannot be deleted.
CHALLENGES

45. BLOCKCHAIN
IS THE NEW
DISRUPTOR

46. DISRUPTION IS THE NEW BM
NEW TAXI NEW CINEMA NEW COMMUNICATION
PROVIDER
NEW HOTEL NEW RETAILER

47. NEXT IS ..
FINANCE
BANKS
INSURER(NBFI)
PSD2 – Disrupting Payments in Europe
INSURTECH

49. TAKEAWAYS
BLOCKCHAIN IS AN
ONGOING
REVOLUTION
BLOCKCHAIN
ESTABLISHES THE
TRUST
BLOCKCHAIN IS NOT
YET MATURE, BUT IN
FAST DEVELOPEMENT.
BLOCKCHAIN IS FOR
ANY DOMAIN
BLOCKCHAIN IS
THREATENING ANY
MIDDLEMAN ACTOR.
BLOCKCHAIN WILL
BOOST ECONOMIC
GROWTH AND
PROSPERITY

50. LET’S
MAKE MOROCCO
A HOTSPOT FOR BLOCKCHAIN INNOVATION

51. QUESTION
BELLAJ BADR
Bellaj.badr@mchain.uk
@badrbellaj