* Evaluation of network computing * Why do industries need it? * Blockchain will disrupt industries! * Concrete project proposal for Turkey * Conclusion * Additional slides on * More details about Blockchain? * Cryptocurrency / Bitcoin details

1. Blockchain@Next18 event with Nuffic/Neso Turkey
Consulate General of the Netherland, 2018.06.28
Blockchain
Introduction
& Sectors
Onur Baran Çağlar
https://www.linkedin.com/in/obcag/
@obcag00
http://obcaglar.com/

2. Agenda
1. Evaluation of network computing
2. Why do industries need it?
3. Blockchain will disrupt industries!
4. Concrete project proposal for Turkey
5. Conclusion
6. Additional slides on
▪ More details about Blockchain?
▪ Cryptocurrency / Bitcoin details
1

3. Evaluation of network computing

4. Two fundamental eras of network computing
I. Transfer Information II. Transfer Value
2020s 2030s
6 7
Simple networks Smart networks

5. Method Interface / Technology
Inception Barter
9000-6000 BC: Animal Farming and agriculture
1000 BC: Precious and coin Bronze age
500 BC: Modern coin Iron Age, Mining science
800 AD: Paper Money (China) Printed
1950s: Credit Cards Digital technology
1980s-90s: Online banking Internet
1990-2010: e-Money Mobile, Cloud, Cryptology, IoT, etc.
2010-Today: Cryptocurrency Blockchain
Tomorrow:? ?
History of money!

6. Smart networks
Pushing more complexity through the Internet pipes
Information
Distribution ofTransfer of
▪ “Rich information” quantum modulated with attributes
▪ Provenance (source), interest level (quadratic voting), relevance
(PageRank), remuneration; (like CC license with more parameters)
Cash
Smart
Assets
20171990 2025e 2050e 2075e
Instantiation of
Smart
Resources
Smart
Entities
2090e
Simple networks Smart networks
Applications
Transfer of Value, Confirmation of Identity,
Registration of Preference (Voting)
Smart
Contracts
Economics Governance

7. Blockchain revolution is just beginning
Decentralized NetworksBlockchainBitcoin
Application Software Protocol Secure Value Transfer
Risk of change over time
▪ 30-40 years for “Information Internet” roll-out
▪ 15 years alone for email as a widespread enterprise application
▪ E-trade evolution affects each sector by sensitivity of
money and asset transfer
LowHigh

8. Why do industries need it?

9. Scalability and financial inclusion
▪ Hierarchy does not scale
▪ Next leap-frog tech: fintech
▪ Like cell phones vs. POTS, it
does not make sense to build
out brick-and-mortar banks in a
world of digital finance
▪ Decentralized networks +
digital finance = power of
printing press in banking,
credit, and money
▪ Access to credit and financial
services as a basic human right
(4 billion under-banked)

10. Long-tail economics and governance
One size does not fit all. Any two parties can meet and
transact on blockchain
Personalized
Long-tail Systems
Long-tail economics
▪ “Amazon or eBay of money”
▪ Personalized banking, credit,
mortgages, securities
Long-tail governance
▪ “Amazon or eBay of government”
▪ Personalized governance
services, pay for consumption
One size fits all

11. Personalized
governance
services
Crypto-enlightenment
“One ought to think autonomously,
free of the dictates of external
authority” - Immanuel Kant
“Multiple private currencies should
compete for customer business”
- Friedreich Hayek
Personalized
economic
services

12. Blockchain and beyond
AssetsImmediate
cash transfer
Applications
Payments
Money
Remittance
Financial
instruments
Unified ledger
Mortgages, loans
Titling: house, auto
Inventory
Commercial trade
Payments
Financial
Services
Logistics &
Supply Chain
Energy, IoT
Healthcare
Government
Humanitarian
Non-profit
Industry adoption
Time
Complexity
Stocks, bonds
Goods transfer
Assurance, provenance
Identity
Driver’s License
Passport, Visa
Contracts
Registries
Marriage licenses
Public Documents
Birth/death registries
BoL, Forfeiting
Insurance
Cash Smart Assets Smart Contracts

13. Stock Transaction
Real Estate Purchase/Sale
Health Insurance Billing
2. Steps that can be automated with blockchain
1. Steps with human decision-making
Energy Contract
International Trade Shipment
▪ Reengineering economics and governance
▪ Any complex transaction has two kinds of activities
Blockchain automation economy
Economics Governance

14. ▪ Secure information exchange
▪ Asset confirmation and transfer
▪ Automated coordination
▪ Example: fleet management of drones,
autonomous driving, robotics, clinical trial
patients, cellular therapeutics
▪ Blockchain: automated, secure
coordination system with remuneration
and tracking
Key blockchain functionality

15. How it works?
1. Transaction
2 parties, A and B, decide to
exchange a unit of value (digital
currency or a digital
representation of some other
asset, such as land title, birth
certificate, or educational
degree/diploma) and initiate TX

16. How it works?
2. Block
TX is packaged with other
pending TXs thereby creating a
"block". Block is sent to
blockchain system’s network of
participating computers.

17. How it works?
3. Verification
Participating computers (called
"minners" in Bitcoin blockchain)
evaluate TXs and through
mathematical calculations
determine whether they are
valid, based on agreed-upon
rules. When "consensus" has
been achieved, typically among
51% of participating computers,
TXs are considered verified.

18. How it works?
4. Hash
Each verified block of TXs is
time-stamped with cryptographic
has. Each block also contains a
reference to previous block’s has,
thus creating a "chain" of records
that cannot be falsified except by
convincing participating
computers that tampered data in
one block and in all prior blocks is
true. Such a feat is considered
impossible.

19. How it works?
5. Execution
Unit of value moves from
account of party A to account of
party B.

20. Blockchain will disrupt industries!
19

21. Blockchain will disrupt industries!
▪ Provides Transparent, Safe, Auditable, and Resistant to Outages.
▪ Makes things Transparent, Democratic, Decentralized, Efficient, and Secure

22. THE TEAM

23. 1. Financial services
▪ Shared ledger
▪ Instantaneous transaction validation
(t=0, not t+3)
▪ Settlement, clearing,
▪ Custody, insurance
▪ Secure, lower risk, cheaper
▪ Financial surety
▪ Securities asset registries
▪ Automated clearing
▪ Quoting, deal placement
▪ Billing, settlement
Shared Ledger

24. 1. Banking and payments
▪ Blockchain will do to banking what
internet did to media
▪ Banks for unbanked
▪ Cryptocurrencies allows
cross-border anyone to send
money
▪ Barclays uses Blockchain,
business operations faster, more
efficient and secure
▪ Real-time global payments across
27 countries with more than 100
banks on Ripple-XRP

25. 2. Supply chain and logistics
▪ Asset transfer and customs clearing
▪ Provenance, assurance, release
▪ Inventory management
▪ Custody, insurance, damage
▪ Automated tracking and notification
▪ Pallets, trailers, containers
▪ Trade finance and documentation
▪ Track purchase orders, change orders,
receipts, shipment notifications
▪ Custody and product certification
▪ Link physical goods to serial numbers,
bar codes, RFID tags

26. PUBLIC/GOVERNMENT
CUSTOMER
LOGISTIC
BANK
(CREDIT/ SECURITIZATION)
RECYCLE
SUPPLIER
TECHNOLOGY
PRODUCER / BRAND
2. Trade and Supply chain
Nearly 40 different types of document or letter need to send different parties to secure and
execute transaction! With blockchain you don’t need!

27. 2. Supply chain management
▪ Transactions are documented in a
permanent decentralized record, and
monitored securely and transparently
▪ Reduce time delay, costs labor
mistakes. Monitor time, costs, labour,
waste and emissions
▪ Understand the environmental impact of
products
▪ Verify authenticity or fair trade status of
products
▪ Provenance, fluent, SKU chain and
block verify are working to improve
supply chains

28. 2. How blockchain will be used?

29. 3. Energy
▪ Blockchain energy projects
▪ Enerchain: trading (NE Europe)
▪ BTL Interbit blockchain energy
platform: trading (Vancouver CA)
▪ PONTON: DSO, TSO, aggregator,
generation power-balancing (Austria)
▪ Automatic markets
▪ “Energy Internet” - smart buildings
on regional energy smartgrids
▪ Smart resource self-pricing
▪ Load-balancing
▪ Source fungibility: wind, solar power
▪ Energy price and trade validation

30. 3. Energy management
▪ Energy management has been a
highly centralized industry for a
long time
▪ Energy producers and users
cannot buy it directly from each
other and must go through public
grids
▪ Transactive grid uses Ethereum
blockchain and allows customers
to buy and sell energy from each
other in a decentralized P2P way

31. ▪ EMR (electronic medical record)
▪ Personal health records
▪ Users key-permission doctors to records
▪ Digital health wallet
▪ Identity + EMR + health insurance + payment
▪ Health insurance billing chains
▪ Automated claims processing
▪ Price-quoting for medical services
▪ Health Data Research Commons
▪ Biobanks, QS (DNA.bits), genome files
4. Healthcare

32. ▪ Another industry that relies on legacy
systems is healthcare
▪ Hospitals need a secure platform to
store and share sensitive data
▪ Blockchain can help hospitals safely
store medical records (diagnosis)
and share them with authorized
doctors or patients
▪ Gem and Tierion are working on
disrupting current healthcare data
space
4. Healthcare

33. ▪ Global insurance market is based on
trust management
▪ Blockchain is a new way of
managing trust
▪ Database brands integrate real-world
data with smart contracts
▪ This technology is useful for any type
of insurance that relies on real-world
data
▪ aeternity blockchain works on
insurance
5. Insurance

34. 6. Politics: Governance services
▪ Blockchain weddings (Bitcoin, Ethereum)
▪ Public document registries
▪ Titling Registries
▪ Local government RFPs for home, auto, land
▪ Legal services: register and attest
▪ Contracts, IP, agreements, wills registries
▪ Proof of Existence: hash + timestamp + blockchain record
▪ Voting
▪ Quadratic voting (interest), PageRank (relevance)
▪ Delegative democracy, random sample elections
▪ Opt-in personalized governance services
▪ Composting vs education

35. 6. Politics: Voting
▪ Blockchain can be used for voter
registration, ID verification, and vote
counting
▪ Immutable, Publicly-viewable ledgers of
recorded votes would make elections
more fair and democratic
▪ Democracy. Earth and follow my vote
are aiming to disrupt democracy
▪ Quadratic voting (interest), PageRank
(relevance)
▪ Delegative democracy, random sample
elections

36. 6. Politics: Government
▪ Government systems are often slow,
Opaque, and prone to corruption
▪ Blockchain can reduce bureaucracy
and increase security, efficiency, and
transparency of governmental
operations
▪ Dubai is aiming to put all its
government documents on blockchain
by 2020

37. 6. Politics: Public benefits
▪ Public benefits system suffers from
slowness and bureaucracy
▪ Blockchain technology can help
assess, verify, and distribute welfare
benefits securely
▪ Govcoin (UK based) is helping
government to distribute public
benefits using blockchain
▪ Blockchain technology is also a good
contender for implementing a basic
income
▪ Circles is a project working on
developing a blockchain-based
universal basic income (UBI project)

38. 7. Humanitarian
▪ Refugee identity system
▪ Phone access: smartphone eWallet, SMS
▪ Object access: card, paper wallet, pendant,
ring, keychain, tattoo, implantable chip
▪ Biometric access: word phrase, fingerprint,
iris, facial scan
▪ Financial inclusion, access to learning
▪ Smart contracts for literacy
▪ Bitcoin MOOCs “Kiva for literacy”
▪ Open-source FICO scores
▪ Decentralized credit bureaus
▪ Remittance, blockchain-tracked aid

39. 7. Humanitarian: Charity
▪ Common complains in charity space
include inefficiency and corruption
▪ Track donation, Blockchain can help
donation to get where they're going
(right hand)
▪ Bitgive lets donors see where their
donations go

40. 8. Retail
▪ When you shop you trust retail system
of store or marketplace
▪ Blockchain-based retail utilities connect
buyers and sellers without a middleman
and associated fees (sorry amazon and
hepsiburada)
▪ Trust comes from smart contract
systems security of exchanges and
built-in-reputation management systems
▪ OpenBazaar and OB1 are disrupting
retail space

41. 9. Real estate
▪ Issues in buying and selling real estate:
Bureaucracy, lack of transparency,
fraud, and mistakes in public records
▪ Blockchain technology can speed up
transactions by reducing need for
paper-based record keeping
▪ Help with tracking, verifying ownership,
ensuring accuracy of documents, and
transferring property deeds
▪ Ubiquity is Blockchain-secured platform
for real estate record-keeping
alternative for legacy paper based
systems

42. 10. Crowdfunding
▪ Crowdfunding has become a popular method of
fundraising for new startups and projects in
recent years
▪ Crowdfunding platforms create trust bw creators
and supporters, but they also charge high fees
▪ In blockchain-based crowdfunding, trust is
created through smart contracts and online
reputation systems
▪ New projects can release their own tokens that
can later be exchanged for products, services or
cash
▪ Many blockchain startups have now raised
millions of $ through such token sales (ICOs)
▪ Future of crowdfunding is uncertain, but
promising

43. 11. Transport and sharing
▪ Blockchain can be used to create decentralized
P2P ridesharing apps w/o 3rd parties
▪ Arcade city, Lazooz work on that
▪ Automatically pay for parking, tolls, electric, gaz
and fuel
▪ UBS, ZF and Innogy work on Blockchain based
e-wallet

44. 12. Consultancy
▪ Blockchain will change how we do research,
consulting, analysis and forecasting
▪ Augur focuses on decentralized markets
▪ Place your bets in a decentralized way

45. 13. Technology: Cyber security
▪ Although blockchain and data is public;
▪ Data is verified and secured using
Cryptographic
▪ Resistant to unauthorized changes and hacks
▪ Blockchain eliminates need for middlemen
(legacy system)

46. 13. Technology: Network and IoT
▪ Samsung and IBM want to create a
decentralized network of IoT devices using
blockchain
▪ Eliminate need for central location to handle
communications for IoT devices
▪ Devices could communicate directly, update
software, manage bugs, and monitor energy
usage

47. 13. Technology: Online/cloud data storage
▪ Data on centralized servers are vulnerable to
hacking, data loss, and human error
▪ Using Blockchain allows cloud storage to be
more secure and robust against attacks
▪ Storj.io : Decentralized cloud storage

48. 13. Technology: Digital assets / content
▪ Blockchain startups are coming up with ways for
musicians/artists to get paid directly from their
fans :) *** (not from platforms and record
companies)
▪ Smart contracts can solve licensing issues and
catalog songs with their respective creators
▪ Mycelia and Ujo Music are creating
blockchain-based solutions in music industry

49. Concrete project proposal for Turkey

50. 1. Wealth Fund subsidiaries’ project
▪ JPP (Joint procurement platform)
▪ 16 subsidiary corporates
procurement requirements
▪ Platform and pool will be managed
▪ Joint loyalty & card & wallet
▪ Joint loyalty program for staff and
even for end-user/customer (B2C)
▪ Joint food card program
▪ Joint prepaid and wallet program
▪ Joint incentive program for staff
16 subsidiary corporates, their staff and end-customer base are really
huge potential for many sector, especially for retail and finance

51. 2. Unbanked scoring
▪ Public transport data
▪ Telecommunication data
▪ Notary network data
▪ Loyalty programs’ data
▪ Tradesman/craftsman and SME
credit (zimem) book data
▪ PTT services’ data
▪ Jewellery, Money transfer and
exchange offices’ data
We can anonymously (with no-name ID) follow and analysis
communities according to behaviour, top-up and payment frequencies

52. 2. Unbanked scoring - Example model
We can anonymously (with no-name ID) follow and analysis
communities according to behaviour, top-up and payment frequencies

53. 3. 2nd hand sales
▪ Banked / unbanked citizen,
insurance and financial scores
▪ Produced and launch date of
hard-good / product
▪ Import / export date
▪ Ownership history (from scratch
to last owner)
▪ Sale or exchange history
▪ Maintenance/repair tracks
▪ Insurance records
We can design and establish for Takasbank this ecosystem and collect
all data about products and owners

54. 4. BIST marketplaces
▪ Marketplace around “Gold”, gold
would be the transaction value
▪ ICO (Initial Coin Offering),
Cryptocurrency and securitization
marketplace
▪ Patent, any rights and useful
model sales and exchange
market
With new digital, soft good and cryptocurrency era, we as an exchange
markets need to be ready with our legislation and regulations.

55. 5. New Governance (DAO)
▪ New form of governance a DAO
(Decentralized autonomous organization)
democracy
▪ “the wisdom of crowds” provides new insights
into how to combine the expertise of all
participants without handing over control to
“experts”
▪ More stable, less prone to erratic behavior,
better meets needs of citizens, and uses
expertise of citizens to make high-quality
decisions
▪ Collecting tax from idle assets (Inertia
Tax)
“… if we want a better politics, it’s not enough to just change a Congressman or a
Senator or even a President; we have to change the system...” by Obama 12.01.16

56. Conclusion
55

57. Conclusion
▪ Blockchain is a fundamental IT for
secure value transfer over networks
▪ For any asset registered in a cryptographic
ledger, the whole Internet is a VPN for its
confirmation, assuring, and transfer
▪ Reinvent economics and governance
for the digital age
▪ Long-tail structure of digital networks
allows personalized economic and
governance services
▪ Smart networks are a new form of
automated global infrastructure for
large-scale next-generation projects

58. Onur Baran Caglar, MBA
●CDO, PTT Bilgi Teknolojileri
●Lecturer, İstanbul Aydın Univ.,
●PhD Candidate, İstanbul Kültür Univ.,
●Consultant and Speaker on Telecom,
Internet and Finance verticals
Be modest, minimalistic!