Crypto Currency, Bitcoin and Blockchain

Crypto Currency, Bitcoin
and
Blockchain
Developed and Facilitated by Goutama Bachtiar
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v1.1.5
Goutama
Bachtiar
Digitally signed by
Goutama Bachtiar
Date: 2019.09.11
01:31:48 +07'00'

August 2019Crypto, Bitcoin & Blockchain
Image: VideoBlocks
3

Course Agenda
Session 1: Cryptography: Concept and
Technology
Session 2: Exploring Crypto Currency
Session 3: Blockchain and Distributed
Ledger
Session 4: Bringing Bitcoin Further
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4

Course Agenda (cont’d)
 Session 5: Moving Blockchain Forward
 Session 6: Leveraging Blockchain Benefits
 Session 7: Understanding ICO and Smart
Contract
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5

▪ 09.00AM – 10.20AM: 1st Session
▪ 10.20AM – 10.40AM: 1st Coffee Break
▪ 10.40AM – 12.00PM: 2nd Session
▪ 12.00PM – 01.10PM: Lunch Time & Pray
▪ 01.10PM – 03.00PM: 3rd Session
▪ 03.00PM – 03.20PM: 2nd Coffee Break
▪ 03.20PM – 05.00PM: 4th Session
August 2019 Crypto, Bitcoin & Blockchain
Our Schedule
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Cryptography: Concept and
Technology
Session 1
Crypto, Bitcoin & Blockchain 7

The concept and practice of “hiding” and “unhiding”
information.
How? By encapsulating a plain text/data into an
unmeaningful data and then retransforming it into its
original form.
The Objective? To provide Confidentiality, Integrity,
Accuracy.
What Cryptography Is?
Image: Wall2born 8

Encryption
The process of converting plain text into an unintelligible
format (or known as cipher text)
Decryption
The process of converting chipper text into plain text
Encryption vs Decryption
Image: Wall2born 9

Encryption vs Decryption (cont’d)
Image: Wall2born 10

Symmetric Key
Known as Secret Key.
Same key is utilized
by both parties.
The key must be kept
secret by them
Pros
Simpler. Faster.
Cons
Less secured.
Type of Cryptography
Image: Wall2born 11

Asymmetric Key
Known as Public Key.
2 different keys per user.
Public key shall be made
public, while private key shall
be privately maintained.
Pros
More secured.
Cons
Relatively complex.
Type of Cryptography (cont’d)
Image: Wall2born 12

Asymmetric Key
Same key is utilized
by both parties
Pros
Simpler. Faster.
Cons
Less secured.
Type of Cryptography (cont’d)
Image: Wall2born 13

A variable value that is applied using an algorithm to a
string or block of unencrypted text to produce encrypted
text, or to decrypt encrypted text.
The length of the key is a factor in considering how difficult
it will be to decrypt the text in a given message.
What is a Key
Image: Wall2born 14

Message Digest Functions
- Protect integrity
- Create a message digest or fingerprint of a digital
document
- Example: MD4, MD5, SHA
Message Authentication Codes (MACs)
- Protect both integrity and authenticity
- Produce fingerprints based on both a given document
and a secret (private) key
Hash Function
Image: Wall2born 15

SHA-0 1993
SHA-1 1995
A set of cryptographic hash functions designed by the
United States National Security Agency (NSA).
SHA-2 2001
SHA-2 family consists of six hash functions with digests
(hash values): 224, 256, 384 or 512 bits: SHA-224, SHA-256,
SHA-384, SHA-512, SHA-512/224, SHA-512/256.
Published in 2001 by National Institute of Standards and
Technology (NIST), a U.S. Federal Standard (FIPS).
Secure Hash Algorithm (SHA)
Image: Wall2born 16

Exploring Crypto Currency
Session 2
August 2019 Crypto, Bitcoin & Blockchain 17

Digital Currency
• Part of E-Cash or E-Money known as Virtual Currency
• Bitcoin is the first decentralized, crypto digital/virtual
currency
• Peer-to-Peer currency with mathematic protection
• No centralized control/Central Bank
• Based on cryptographic proof (SHA256) instead of trust
• Developed by a person/group under pseudonym of Satoshi
Nakamoto (2008)
• Operational since early 2009
• No financial institutions involved or managed

Digital Currency (cont’d)
Example of Digital/Virtual Currency centralized and not
crypto: https://koinworks.com/lender?locale=id

The First Crypto Currency
20
•It was Bitcoin (BTC)
•A maximum of 21 million Bitcoins can be generated
•The Satoshi is the smallest unit of bitcoin recorded on
blockchain (it's a one hundred millionth of a single
bitcoin (0.00000001 BTC)
•https://www.cryptocoincharts.info/coins/info claims to
be indexing 4,220 cryptocurrencies
•Bitcoin is one of the Blockchain digital assets.
•Most circulated: Bitcoin, Ethereum, Litecoin

Bitcoin’s Key Concepts
Bitcoins
Transactions
Proof of
Work
Mining
Digital Wallet
21

BTC Transactions
• Straight away between owner and receiver
• Broadcasted through Peer-to-Peer (P2P) network
• All are public but anonymous
• Mining nodes collects the transactions into Blocks

BTC Transactions (cont’d)
• Transactions Blocks  Full
page in a Ledger Book
• Block contains information
about transactions and
previous Block (Block
Chain) linking to the first
block when Bitcoin Network
started.

Bitcoin Advantages
• BTC software unchangeable without majority users within entire
network accepting the change
• While majority of nodes are honest, attackers cannot harm the system
• Attacker would need astronomical computer power to corrupt block
chain
• No government can print more money
• Anonymity
• Lower global transaction costs
• New bubble may emerge (?): Oct13 = USD150 while Nov13 is more
than USD500
• March 2013: BTC passed 1 Billion USD (around 11 million Bitcoins in
circulation)

Image: Deloitte UK Report 2016
25

Technology Behind Bitcoin
26
•Think of Bitcoin as an electronic asset other than
digital, crypto currency
•A network of computers keeps track of Bitcoin
payments and adds them to an ever-growing list of
them which have been made, called “The Bitcoin
Blockchain”.
•The file that contains data about all Bitcoin
transactions is often called a “ledger”.

Technology Behind Bitcoin (cont’d)
27
•Bitcoin value is created through transaction
processing, referred to as “mining”.
•Mining is performed by distributed processors
called “nodes” of the peer-to-peer network.
•Blockchain without digital asset in this case crypto
currency? NO.

Technology Behind Bitcoin (cont’d)
28
•Bitcoin value is created through transaction
processing, referred to as “mining”.
•Mining is performed by distributed processors
called “nodes” of the peer-to-peer network.
•Blockchain without digital asset in this case crypto
currency? NO.

Ethereum
29
A decentralized platform that runs smart contracts:
applications that run exactly as programmed without
any possibility of downtime, censorship, fraud, or third-
party interference.
The Ethereum project was bootstrapped via an ether
pre-sale during August 2014.
The project is developed by Ethereum Foundation, a
Swiss nonprofit, with contributions from individuals and
organizations across the globe.

Ethereum Components
30
• Ethereum Wallet
A gateway to decentralized applications on
Ethereum blockchain, allowing users to
hold and secure ether and other crypto-
assets built on Ethereum, as well as write,
deploy and use smart contracts.
• Design and issue your own
cryptocurrency/traceable token
• Kickstart a project with CrowdSale

Enterprise Ethereum Alliance
31
Permissioned Blockchain

Ether
32
• The crypto-fuel for Ethereum network.
• A form of payment made by clients of platform to machines
executing requested operations, functioning as incentive to
ensure that developers will write quality applications, and
network remains healthy.
• Developers who intend to build apps that will use the
Ethereum blockchain need ether.
• Users who want to access and interact with smart contracts
on Ethereum blockchain also need ether.

How was Ether Created?
33
• Total supply and its rate of issuance was decided by
donations on 2014 presale.
• 60 million ether created to contributors of the presale.
• 12 Million (20% of the above) were created to the
development fund.
• 3 ethers are created every block (roughly 15 seconds) to the
miner of the block.
• 0.625-2.625 ethers are sometimes sent to another miner if
they were also able to find a solution.

Ethstats.net
34
Statistics of Ethereum nodes on public Ethereum Blockchain

Blockchain and Distributed Ledger
Session 3

What is Blockchain?
36
• A technology that permits transactions to be gathered
into blocks and recorded.
• Allows the resulting ledger to be accessed by different
servers.
• Cryptographically chains blocks in chronological
order.
• First introduced in whitepaper “Bitcoin: A Peer-to-Peer
Electronic Cash System,” by Satoshi Nakamoto in
2008.

What is Blockchain? (cont’d)
37
• A Distributed Transaction Ledger
• Every block contains multiple transactions
• Massively duplicated across network nodes
• Shared with a P2P file transfer protocol
• All network nodes perform transaction validation and
clearing.
• Updated by peculiar nodes, known as miners, appending
new blocks of transactions
• Miners perform the additional work required for settlement.

38
Whilst Bitcoin themselves:
• No reliance on trust
• Digital signatures
• Peer-to-peer network
• Proof-of-work
• Public history of transactions
• Honest, independent nodes control majority of CPU computing
power
• Nodes vote with CPU computing power
• Rules and incentives enforced through consensus mechanism

39
To imagine:
“Giant interactive
Google doc
spreadsheet that
anyone can view
and administrators
(miners)
continually verify
and update to
confirm that each
transaction is
valid”

Distributed Ledger
40August 2019 Crypto, Bitcoin & Blockchain

Ledger
• A Ledger of Transactions stored as Immutable Blocks.
• Blocks are connected to one another hence forming a Chain.
• The validity of which has been agreed upon by Peers on a Decentralised
network secured by Cryptography.
• Whilst Shared Ledger is:

The Components
• Node: refers to client who owns the block.
• Transaction: Transfer of something from A to B.
• Block: Bundle of transactions.
• Miners: Burns effort, time and energy to create blocks, therefore get
rewarded by Block Reward + Transaction Fees.
• Block Reward: New coins created with each block, goes to miner.
• Transaction Fees: Small percentage of transaction value, which
goes to the miner.
• Mining: process by which blocks are created, transactions are
verified and added to blockchain.

The Node
• A client, which owns the block.
• A copy of the ledger operated by a participant of the
blockchain network.
• Contains one or more than one account.
• Miner (Account) mines on the specific node to whom they
belongs.

The Block
• Bundle of Transactions.
• Contains previous block hash.
• All blocks are linked using their hash.
• Data can’t be changed in one block without breaking the
chain.

Cryptography
Initiation and
Broadcasting of
Transaction
▪ Digital Signature
▪ Private and Public
Keys
Validation of
Transaction
Proof of Work and
Certain Alternatives
Chaining Blocks Hash Functions

Public Key
• A large numerical value used to encrypt data/file/message.
• Encrypted file is intended for a particular recipient, and it could be
decrypted only by using the second key known only to the
recipient (the private key).
Therefore the sender must know the recipient public key, encrypted the file with
that key and sent it to his/her. He/she receives and decrypt it with his/her own
private key.
• Can be generated by a software, website, or provided by several
organization, Certificate of Authority (CA) for instance.
• Made available to everyone by telling others or through a publicly
accessible repository/directory service or server.

Example of Public Key

Private Key
• A large numerical value that is mathematically linked to the public
key.
• Whatever is encrypted with a Public Key may only be decrypted
by its corresponding Private Key and vice versa.
• Can be generated by a software, website, or provided by several
organization, Certificate of Authority (CA) for instance.
• Shall be kept securely and privately by the owner/holder.
• Symmetric/Private Key encryption uses the same private/secret
key for both encryption and decryption whilst asymmetric/public
key encryption uses two linked keys and required higher
computing resources.

Example of Private Key

Digital Signature

• Owner (subscriber/sender) name
• A Serial Number (unique; generated by CA)
• Expiration date
• A copy of certificate holder’s Public Key (utilized for
encrypting messages and digital signatures)
• Digital Signature of CAs so a recipient/second party can
verify the certificate is real.
• Standards: X.509, PKI X.509 and Public Key Cryptography
Standards (PKCS).
Digital Certificate

Proof of Work
• A system that ties mining capability to computational
power.
• When a block is successfully hashed, the hashing must
have taken some time and computational effort
• Hashed block is considered proof of work.
• In other words, transaction is confirmed in the
blockchain.
• Done by the node/miners.

Hash Function
• A hexadecimal code used SHA-256
• Blockchain uses Cryptographic Hash Function.
It takes any string as input
Fixed-size of output (256 bits)
Efficiently Computable
Security Properties (Collision free, Hiding and Puzzle friendly)

Distributed Consensus
54
• Satoshi Nakamoto reaches consensus using game theory
in this case economic incentive for mining nodes to be
honest and do as they are expected.
• Miners are compensated for their proof-of-work
(validating, settling and clearing transaction) using
seigniorage revenues, i.e. with issuance of new bitcoins.

How Blockchain Works
55
• A participant is a member of a network
– Customer, Supplier, Government, Regulator
– Have specific identities and roles
• A transaction is an asset transfer between two or more participants:
– John gives a car to Anthony (simple)
– John gives a car to Anthony, Anthony gives money to John (more
complex)
• A contract is set of conditions under which transactions occur:
– If Anthony pays John money, then car passes from John to Anthony
(simple)
– If car won't start, funds do not pass to John (as decided by independent
third party arbitrator)

How Blockchain Works (cont’d)

Therefore, the Blockchain

Image: Deloitte UK Report 2016Image: Blockchain.info October 2018

Blockchain in a Nutshell
Broader participation, increased efficiency and lowered cost

Three Major Usage
61
1. Storing digital records
2. Exchanging digital assets (digital, crypto
currency as known as token)
3. Executing Smart Contracts
i. Ground rules: Terms & conditions recorded in code.
ii. Distributed network executes contract and monitors compliance.
iii. Outcomes are automatically validated without third-party
individual or organization.

August 2019 Crypto, Bitcoin & Blockchain 62Image: IBM

Blockchain Networks
• Public (Permissionless Blockchains)
Example: Bitcoin, Ethereum, Litecoin
• Private (Permissioned Blockchains)
Example: Multichain, Monax
• Consortium Blockchains
Example: R3, EWF, Corda

Blockchain Networks (cont’d)
Image: CoinDesk Consensus Q1 2017 Report

Global Fintech Landscape

Bringing Bitcoin Further
Session 4

Mining Revolution
67
Bitcoins are generated in blocks.
Nowadays one block is mined every 10 minutes (144 blocks/day)
One block is, at the moment,12.5 BTC
Reward will be distributed depending on the miner’s hash rate
Hash rate is the rate your mining hardware performing as reported
by your miner software or from an estimate obtained from mining
hardware comparison tables
BTC generation will stop at 2140 (around 21 million)
Block reward started at 50 BTC in block #1 and halves every
210,000 blocks.

Mining Revolution (cont’d)
• ASIC (Application Specific Integrated Circuit) has been
designed strictly for mining BTC.
• Groups of miners have formed mining pools, with each being
paid their relative share for their contribution to the work
performed.
• After 2140 the incentive will be only the transaction fee.
• Around 17 million BTC in existence — only 4 million left to
'mine’.
• When hitting 21 million, the blocks will still be created as long
as people are trading it.

Bitcoin Mining Pools
Ranked based on the hash power controlled by a pool:
1. AntPool (25.2%)
2. BTC.TOP (11.2%)
3. BTC.com (10.2%)
4. Bixin (8.1%)
5. BTCC Pool (7.3%)
6. F2Pool (5.4%)
7. ViaBTC (5%)
8. BW.COM (5%)
9. BitClub Network (4.8%)
10.Bitcoin.com (3%)

Token In Details
70
• Can be defined as “scarce digital asset based on
underlying technology inspired by Bitcoin.”
• Ethereum was Bitcoin-inspired but has its own
blockchain and more programmable.
• Tokens can be issued on top of Ethereum blockchain.
• Token buyers are buying private keys and can be
transferred to other parties without consent.

Token In Details (cont’d)
71
• Have a value and therefore a price.
• Do not dilute capital. They introduce a huge increase
to buyer base and time-to-liquidity.
• Can be issued as a way to share profits.
• Can be sold internationally over internet and are
always open for business.
• Decentralize process of funding technology.
• Accommodate immediate custody without
intermediary.

Trading Platform and Exchange (cont’d)
• BTC-e
Digital currency trading platform and exchange
Founded in July 2011, HQ in Russia
As of Feb15 handles 2.5% all Bitcoin exchange
volume
Allows trading between currencies USD, RUR and
EUR, and cryptocurrencies Bitcoin, Litecoin,
Namecoin, Novacoin, and Peercoin
Been component of CoinDesk Bitcoin Price Index
(Sep13)

Image courtesy of wikipedia.org
75

76

77

78

79

Bitcoin’s
Blockchain
Stats
80
Summary of bitcoin statistics for the
previous 24-hour period from
Blockchain.info

Bitcoin’s Blockchain Stats
81
Summary of bitcoin statistics for the previous 24-hour period from Blockchain.info

How to Store Crypto
Ledger Nano S
Ledger Blue

How to Store Crypto (cont’d)

84

85

Bitcoin Challenges

Bitcoin Challenges (cont’d)

Moving Blockchain Forward
Session 5

TRANSACTION

Elements of Transaction

Example of Transaction
Receiving BTC in Blockchain.info Wallet
Local time when BTC
received by the wallet
The sender’s ‘Send’ Wallet ID
The receiver’s ‘Receive’ Wallet
ID (hashed)

Example of Transaction (cont’d)
Status of
Transaction
Confirmation time
between minutes until
hours
URL of the
Transaction
The sender’s
‘Send’ Wallet ID

Example of Transaction (cont’d)

BLOCK

Visualization
Inclusive of
Block creation
time

Example of Block
Current Block

Example of Block (cont’d)
Previous Block

Example of Block (cont’d)
Next Block

Example of Transactions Inside the Block

Example of The Largest Transaction

Example of Unconfirmed Transaction

Example of Strange Transaction
Transactions containing outputs from which were unable to decode a bitcoin address

Detached/Orphaned Block
105
• Valid blocks which are not
part of the main chain.
• They can occur naturally
when:
▪ Two miners produce
blocks at similar times
▪ Caused by an
attacker with enough
hashing power attempting
to reverse transactions.

Rejected Inventory
Transactions and blocks which have been rejected by the nodes

Example of The Node

LEDGER

Processes in Ledgers
109August 2019 Crypto, Bitcoin & BlockchainImage: Baltana

Benefits of Distributed Ledgers
110August 2019 Crypto, Bitcoin & BlockchainImage: Nancy Liao

Type of Distributed Ledgers

Centralized vs Distributed

Single Entity vs Multiple

Example of Ledger

Hyperledger
• An open source collaborative effort created to advance
cross-industry blockchain technologies.
• A global collaboration, hosted by Linux Foundation,
including leaders in finance, banking, IoT, supply chain,
manufacturing, and technology.
• Business Blockchain Frameworks are hosted with
Hyperledger.
Image: Nancy Liao

Hyperledger (cont’d)
• Accommodate cross-industry open standard for distributed
ledgers.
• Some of well-known Hyperledger projects/frameworks:
• Hyperledger Burrow
Permissible smart contract machine with a modular blockchain
client, built in part to the specification of Ethereum Virtual Machine
(EVM)
• Hyperledger Fabric
Foundation for developing plug-n-play solutions within a modular
architecture
Image: Nancy Liao

Hyperledger (cont’d)
• Hyperledger Iroha
Simple and easy blockchain
framework designed to be
incorporated into infrastructure
projects requiring distributed
ledger technology.
• Hyperledger Sawtooth
A modular platform for
building, deploying, and
running distributed ledgers.
Image: Nancy Liao

Leveraging Blockchain Benefits
Session 7

How Blockchain Benefit Business
119
• Transparency and cryptography add resilience of data
• Audit electronic actions to easily complete forensic
analysis if a hack occurs
• If something was changed, Blockchain would become
invalid at that point and broadcast the error to all
nodes
• Immutable logging and connection of data to create a
tamper-proof chain of data

How Blockchain Benefit Business (cont’d)
120
• Immutable data means accurate reporting and
analytics
• Immutability means that it allows any fraud or error to
be identified and corrected, eliminating any single
point of failure and making it easy to have a correct
record of all behaviour at any point in time.
• If a past data entry is tampered, it will make the block
invalid, which both cancels the upcoming transaction
and shows data that was tampered with.

How Blockchain Benefit Business (cont’d)
121
• Immutable data means accurate reporting and
analytics
• Immutability means that it allows any fraud or error to
be identified and corrected, eliminating any single
point of failure and making it easy to have a correct
record of all behaviour at any point in time.
• If a past data entry is tampered, it will make the block
invalid, which both cancels the upcoming transaction
and shows data that was tampered with.

Blockchain Market Overview
Source: World Economic Forum (WEF) Report, 2017
Note
DLT: Distributed Ledger Technology

Image: Melanie Swan

August 2019 Crypto, Bitcoin & Blockchain 126Credit: Melanie Swan

Credit: Melanie Swan

Potential Applications
130August 2019 Crypto, Bitcoin & BlockchainImage: Baltana

How Bank Benefits from Blockchain
Source: Finextra, Accenture, CoinDesk

How Bank Leveraging Blockchain These Days
• Blockchain transactions are immediately validated and
approved, then settled shortly thereafter, automatically
without a central authority.
• In the these days financial world, cash transactions
only are cleared and settled automatically without a
central authority.
• Financial transactions only take milliseconds to execute,
clear and settle rather than in days.Source: CoinDesk, McKinsey, Bitcoin

Adoption in Banking Pads

Letter of Credit – Use Case
134Crypto, Bitcoin & BlockchainImage: Baltana
As a bank handling letters of credit (LOC) for our clients, we
need a common ledger that allows us and all counter-
parties to have the same validated record of transaction and
fulfilment of conditions.
It’s intended so we can increase trust and speed of
execution from 4 days to <1 day. If we can drive out 99% of
the time and cost, we can offer innovative LOC solutions for
a wider range of clients, including start-ups that are “born
global.
August 2019

Use Case – Financial Services
central authority.
Source: World Economic Forum

Use Case – Financial Services (cont’d)
central authority.
Source: World Economic ForumSource: World Economic Forum

Understanding ICO and Smart
Contract
Session 6

A Sneak Peak on ICO
141
• Initial Coin Offerings as known as Token Sales or Digital
Token
• A fundraising strategy that is fueled by a convergence of
blockchain technology, new wealth, clever entrepreneurs,
and crypto-investors who are backing blockchain-fueled
ideas.
• Dubbed as the Wild West of financing — they sit in a grey
zone where the U.S. SEC and many other regulatory
bodies are still investigating them.

A Sneak Peak on ICO (cont’d)
142
• Most ICO’s don’t offer equity in start-up ventures.
• They only offer discounts on cryptocurrencies before they
hit the exchanges.
• Therefore, they are technically outside of traditional legal
frameworks.
• They are global instruments and they are funded using
bitcoin, ether and other cryptocurrencies that are not
controlled by any central authority or bank. Anyone can
invest, and they can even do so pseudo-anonymously.

How ICO Works
143
• A new cryptocurrency is created on a protocol such as
Counterparty, Ethereum, or Openledger.
• A value is arbitrarily determined by the startup team
behind the ICO based on what they think the network is
worth at its current stage.
• Then, via price dynamics determined by market supply
and demand, the value is settled on by the network of
participants, rather than by a central authority or
government.

Why ICO?
144
• Liquidity of cryptocurrencies
• Rather than investing in a unicorn startup and waiting for
the long play — an IPO or an acquisition — investors can
see gains more quickly, and can pull profits out more
easily, via ICOs.
• They simply need to convert their cryptocurrency profits
into Bitcoin, Ether then it’s easily converted to fiat currency
via online services such as Coinsbank or Coinbase.

Success Stories
145
• Cryptocurrency investors made some massive returns
in 2016, with cryptocurrencies from Blockchain
startups Monero and NEM both seeing 2,000%
increases in value.
• The cryptocurrency used for the Ethereum network,
called Ether, saw its value double in just three days in
March 2017.
• They can opt to cash out to a fiat-backed currency or
wait for the crypto to continue to rise (or fall).

Ethereum Use Case
146
• When Ethereum did their ICO in 2014, they hold about
10-20% of the total cryptocurrency they issue.
• 20% going to the development fund and the remaining
going to the Ethereum Foundation.
• As of March 2017, the market capitalization of the ether
token was more than $4 billion.

ICO in Numbers
147
• More than $270 million has been raised in ICOs since 2013,
according to Smith and Crown.
• Since 2013, there’s been about $2 billion invested in blockchain
and bitcoin startups from the VC community.
• ICOs are becoming more and more popular for start-ups
seeking to get out of self-funding, bootstrapping starvation mode
and avoid being locked in by venture capitalists, watching their
own equity drown in a sea of financing rounds.
• ICOs are dominating the overall crowdfunding charts in
• terms of funds raised, with half of the top 20 raises coming from
the crypto-community.

Challenges and Opportunities
148
• No Anti-Money Laundering (AML) law or Know Your
Customer (KYC) framework, though some companies are
working on that.
• For blockchain startups, ICOs are a win-win — they allow
start-ups to raise funds without having equity stakeholders
breathing down their necks on spending, prioritizing
financial returns over product/service itself.
• ICOs are a long-awaited solution for non-profit
foundations that want to build open-source software to
raise capital.

Smart Contract
149
• Agreements between parties posted to the blockchain
for automated execution.
• Examples
Bet on high temperature tomorrow
Mortgage with automatic interest-rate resets
• Code: Ethereum and Eris
https://github.com/ethereum/
https://erisindustries.com/
August 2019 Crypto, Bitcoin & BlockchainImage: Baltana

Example of Smart Contract
Image: Deloitte UK Report 2016

Fingerprint and Time Stamp
151
• A file mostly Digital Certificate and Digital
Signature could be hashed to producing a short
unique identifier namely (Digital) Fingerprint.
• Such a fingerprint can be associated to a bitcoin
transaction (regardless to the amount) and hence
registered on the blockchain.
• Blockchain provides non-repudiation time-stamp, no
need for us to implement Time Stamp Server or get
connected to Time Stamp Authority (TSA).

Digital Fingerprint
152
• Application is related to digital media files.
• Helps a user locate a specific file to verify whether a
file has been altered, while actually facilitating
copyright protection.
• This involves using a fingerprint identifier/ID to
conduct protected file searches for other online file
instances.

Notarization
154
• The time stamp from third party organization act as
Online Notaria proving the existence of data file in
that specific status at that moment in time.
• This generic process is even undergoing some
standardization to achieve third party auditable
verification: broker-dealers could use it to satisfy
regulatory compliance.

Final Q & A
Crypto, Bitcoin & BlockchainImage: Capitoltimes 155

Thank You!
Looking forward to catching up with you again soon
Image: Samfouladgar 156

Crypto Currency, Bitcoin and Blockchain

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