Blockchain has become a hot topic for enterprises, start-ups, entrepreneurs, and regulatory bodies. Born from bitcoin in 2008, blockchain's promise of a distributed ledger has far greater implications than cryptocurrency. Companies are now beginning to understand its disruptive potential and are experimenting with its most promising applications. But, few companies have asked the more fundamental question: Are we ready to adopt a shared public database for financial transactions? In this session, we cover the concepts of blockchain and use cases in the enterprise. We also demonstrate blockchain in use and show how to implement it using AWS services.

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AWS re:INVENT
Anand Iyer
Santanu Dutt
E X P L O R I N G B L O C K C H A I N T E C H N O L O G Y ,
R I S K S A N D E M E R G I N G T R E N D S
@san_dutt
@iyeranand_p

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TRUST

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Treasury Securities Dealers Accused of Collusion ... Bank of America Corp, Goldman Sachs Group Inc and
JPMorgan Chase & Co are among 22 financial companies accused of colluding to manipulate auctions of
U.S. Treasury securities ... $6bn in fines from banks in a similar investigation ..."
In rare admission of guilt, Wall Street banks say they rigged markets ... Five of the world's largest banks
have plead guilty to federal charges including manipulating the global foreign exchange market and rigging a
benchmark interest rate that affects the cost of credit card ... agreed to pay more than $5bn ..."
"Wall Street's biggest banks have agreed to a tentative settlement over allegations that they conspired to
rig the market for credit derivatives ... Twelve banks and two industry groups reached a preliminary
agreement ... to pay $1.87bn ... this behavior by Wall Street could be more far-reaching than we thought ..."
DISTRUST?

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BANKING – A SIMPLE BUSINESS?
Banking will be disrupted - It is a very simple business to disrupt
Why are banks so profitable?
• By virtue of their licenses, they
provide a platform for global trade
• Provide a convenient alternative to
physical cash
• Provide a market for money
• Trusted middlemen?

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FUNDS TRANSFER PROCESS - TODAY
Every layer
adds cost and
processing time
due to the
Centralized
Leger
Receiver

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Nick Szabo coins
the idea of smart
contracts
1997
2009
Satoshi Nakamoto
introduces the
concept of
blockchain
Origin
2012-14
Basic smart
contract
capabilities
added to
Bitcoin
2014-15
Blockchain
consortium by
leading retail
companies like
Nestle and
Walmart
2015-17
Bajaj Electricals
goes live on a
blockchain-based
vendor-financing
solution
Experimentation
2018-19
Regulations and
laws to bring
blockchain and
smart contracts
under the purview
of law arrive on the
scene
Expected first in-
production
implementation of
smart contracts by
financial service
firms
Take-off
2020
Mainstream
adoption of smart
contracts begins
Emergence of new
products and
services enabled
by smart contracts
Main stream
adoption
Samsung
launches a pilot
project to track
imports/exports,
cargo shipment
locations over a
blockchain ledger
Maersk aims to
apply distributed
ledger
technology in
the field of
marine insurance
TIMELINE AND EVOLUTION

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BITCOIN != BLOCKCHAIN

12. THE FUTURE OF FUNDS TRANSFER
Sender A
Receiver B

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BUT FIRST – WHAT IS A HASH?
• Hash functions take any input and produce a single output
• The same input will always yield the same output hash
• It is not possible to derive the input from the output
• Hash functions are critical to the way blockchains work
Hash value:
02bf6a5727

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BLOCKCHAIN DETAILED
Block 16
Transaction
Previous Block Hash:
57ec2fda71
Block Hash:
87ea2ffe94
TimeStamp
Block Hash:
57ec2fda71
Block 15
Transaction
Transaction
Previous Block Hash:
d68b2f0a3b
TimeStamp
Block 17
Previous Block Hash:
87ea2ffe94
Block Hash:
44bf2efe32
TimeStamp
Made up of a series of blocks added in chronological order
Pr
44
Bl
21
Ti
Transaction
Block = Page in a ledger Block contents = Items of the ledger

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HOW ARE BLOCKS LINKED?
Block 16
Transaction:
Previous Block Hash:
57ec2fda71
Block Hash:
87ea2ffe94
TimeStamp
Block Hash:
57ec2fda71
Block 15
Transaction:
Transaction:
Previous Block Hash:
d68b2f0a3b
TimeStamp
 Acts like a pointer to the block that
came before it in the chain.
 Creates a Linked List

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TRANSACTION - LOGICAL
Block Hash:
57ec2fda71
Block 15
Transaction:
Transaction:
Previous Block Hash:
d68b2f0a3b
TimeStamp
Block 16
Transaction:
Previous Block Hash:
57ec2fda71
Block Hash:
87ea2ffe94
TimeStamp
Transaction
Type: Update Owner
Transaction ID: 4cafb93760d6b2
Originator: 0x07dd71d507100c1
Recipient: 0x06fd91d545105d5
Timestamp: 2016-02-13 11:36:12
Transaction
Type: Update Owner
Transaction ID: 45265ab6f0f352b
Originator: 0x0f6e253ac6b620f3
Recipient: 0x0258ab361f2f36e0
Timestamp: 2016-02-13 11:36:12

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HOW ARE NEW BLOCKS CREATED?

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HOW ARE NEW BLOCKS CREATED?

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HOW ARE NEW BLOCKS CREATED?

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WHAT IS PROOF OF WORK?
• Block contains transactions to be validated and previous hash value.
• Pick a nonce such that H(prev hash, nonce, Tx) < E. E is a
variable that the system specifies. Basically, this amounts to
finding a hash value who’s leading bits are zero. The work
required is exponential in the number of zero bits required.
• Verification is easy. But proof-of-work is hard.

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WHY CAN’T YOU CHEAT?

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Permissionless

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AWS does not believe in choosing one protocol to rule them all…
• Building an ecosystem that can be tapped into by different
use cases and industries is our main focus
• Enabling experimentation into maturity
• Leveraging our services to enact a robust solution
AWS WAF
AWS
CloudTrail
AWS
CloudFormation
Amazon
CloudWatch
Amazon ECS Amazon
S3
Amazon EBS
volume
Amazon
VPC
IAM

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Infrastructure
• Virtual Private Cloud
• Private Subnet in Single Availability Zone
• Auto Scaling Groups
• Docker Swarm
• AWS Elastic Load Balancers + AWS
Certificate Manager
• Route53
• AWS Elastic Container Registry
• Identity and Access Management
ETHEREUM ON AWS
WebApp
WebApp
WebApp
WebApp
API
API
API
API
Ethereum
Node
Ethereum
Node
Ethereum
Node
Ethereum
Node
Front End Middleware
Blockchain
Nodes
us-east-1
us-east-1a
Administrator
Users
IGW
ELB
ECR

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Hot Wallet
WALLET EXCHANGE ARCHITECTURE
ON AWS
WebApp
WebApp
WebApp
WebApp
API
API
API
API
Front End Middleware
Wallet Microservice
us-east-1
us-east-1a
IGW
ELB
ECR
HTTPS
Notification on Hot
Wallet status via SNS
CloudHSM
Batch
Cron deposit jobs
running in wallet
microservice to transfer
deposit to cold wallet
Exchange
Microservice
Transactions
Cold Wallet
Deposit
Smart Contracts

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DEMO 1 - MORTGAGE BLOCKCHAIN ON ETHEREUM
Homeowner
1. Initiate Loan Contract
Mortgage Holder
2. Approve Loan
Insurance Company Tax Authority

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RISKS
STANDARD RISKS
STRATEGIC
BUSINESS
CONTINUITY
REPUTATIONAL
INFORMATION
SECURITY
REGULATORY
CONSENSUS
PROTOCOL
CONTRACTUAL SUPPLIER

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AWS Partner Ecosystem
aws.amazon.com/partners/blockchain

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Thank you!
Game and Marketing Images © 2017 Necromonger, LLC., IPerion, LLC., and Gearbox Software, LLC. All rights reserved
Anand Iyer
Santanu Dutt @san_dutt
@iyeranand_p