Blockchain: New Frontiers Nikolay Ratkov, Bits.Media 11 November 2015 Trading Technology Trends & Quality Assurance Conference in St. Petersburg

1. Nikolai Ratkov
Bits.media
Blockchain - new frontiers

2. Bits.media
Blockchain is a technology of the public decentralized
registry (database)
Crypto secured database, consists of the chain of
concatenated blocks
Current primary application of blockchain are
cryptocurrencies
The first public blockhain of Bitcoin was launched at
January 3rd, 2009 (the Genesis block creation)
BLOCKCHAIN - WHAT IS IT?

3. Bits.media
BLOCKCHAIN FEATURES
Peer-to-peer network – all nodes are equal
Every node stores full copy of database
Confirmed blocks can’t be modified or deleted
The older blocks are better protected

4. Bits.media
BLOCKCHAIN TRANSACTIONS
Each transaction – autonomous data unit
Key parts of transaction:
 Sender and recipient addresses
 Main data
 Rules of execution (optional)
 Technical fields
 Crypto signature

5. Bits.media
Block – the blockchain’s main structural unit
Mining is the process to find a hash to build next
block
Blocks connect to each other with hash of the
previous one in chain
Protocol rules must be fulfilled to place transaction
to next block
BLOCKS – THE CHAIN LINKS

6. KNOWN PROBLEMS
Bits.media
Concurrent transactions (double spend)
Chain fork
Random time interval between blocks
Weak scalability –fast database growth

7. BLOCKCHAIN vs RDBMS
Bits.media
Blockchain RDBMS
Infrastructure requirements Low High
Distributed storage Default Optional
Single Point Of Failure None Possible
Data unit Block Table
Cancel transaction Until confirmation Yes
Modify old data No Yes
Integrity control Every node Master server
Centralized access control No Yes
Centralized data write No Mostly
Concurrent transactions Possible No
Update periodicity
Set (some
random)
Realtime
Backup Priv keys only All data

8. BLOCKCHAIN PROJECTS
Bits.media
Bitcoin and other cryptocurrencies
Domain name system – Namecoin
Network services: DNS, SSL, VPN – Emercoin
File storage, hosting - Datacoin, StorJ,
Burstcoin
Crypto messengers - Bitmessage, Twister

9. BLOCKCHAIN PROJECTS
Bits.media
Evolving applications:
 Distributed software repositories
 Ownership registration, public registers
 Accounting and statistics data storage
 Smart contracts

10. BLOCKCHAIN PROJECTS
Bits.media
Colored coins – the protocol to represent and
manage real-world assets in blockchain
 Operates over Bitcoin network
 Coloring and tracking Bitcoin transactions under
special rules
 Prove asset ownership with a message signed with
public key
 Trade the colored coins instead of IPO
 Pay dividends to colored coins owners

11. SMART CONTRACTS
Bits.media
Automatically enforced contracts using
algorithm (program). No middleman
Can be checked by everyone connected to
blockchain
Contract (Oracle) can check outside events
Specialized platforms with their own Blockchain

12. PUBLIC SMART CONTRACT PLATFORMS
Bits.media
Counterparty: Colored coins extension for crypto assets
trading. Internal XCP cryptocurrency.
Ripple Codius: Specialized smart contracts platform.
“Oracles”introduced. Contracts can access Internet. Any
programming languages. Closed in June 2015.
Ethereum: Its own blockchain and cryptocurrency to pay
contracts (ETH). Internal C-like language. Contracts can
be accessed from Internet. Launched in July 2015.

13. CORPORATE BLOCKCHAINS
Bits.media
R3 CEV startup sponsored by 25 banks, including:
Barclays, Credit Suisse, J.P. Morgan, RBS, RBC,
UBS, Bank of America, Citi, HSBC, Morgan Stanley,
Deutsche Bank, SEB, SocGen, Mizuho, Nordea etc.
NASDAQ exchange – trading platform for Nasdaq
Private Market.
London and Australian stock exchanges, Visa
Blockchain startups investments:
Master Card, American Express, IBM, Orange DV

14. STATE BLOCKCHAINS
Bits.media
Countries to explore Blockchain tech:
 Blockchain Alliance (USA)
 Some US states governments
 UK government
 Australian government
 National Bank of Ukraine

15. BLOCKCHAIN IN RUSSIA
Bits.media
Who works on Blockchain tech in
Russia:
 Central Bank of Russia task force
(September 2015)
 HSE Lab (Prototyping center of HSE) –
master-classes
 Blockchain.community – NGO, startups
incubator

16. THE FUTURE OF BLOCKCHAIN
Bits.media
 Not only cryptocurrencies
 Smart contracts development
 Binding with Internet of things
 Standartization

17. Blockchain - new frontiers
Nikolai Ratkov
http://Bits.media
content@btcsec.co
m
Skype: nratkov