Dino Esposito discusses the complexities and misconceptions surrounding blockchain technology at the blockchain & crypto values conference in Milan. He highlights that while blockchain promises decentralization and security, it often faces scalability issues and is not the universal solution it is marketed as, particularly in various business domains like finance and healthcare. Esposito argues that the hype surrounding blockchain tends to overshadow the real needs for flexibility and efficiency in existing IT infrastructures.

1. BLOCKCHAIN & CRYPTO VALUES CONF | June 14 - Milan
The Hope and the Hype of Blockchain
Dino Esposito

2. Dino Esposito
Corporate Digital Strategist
BaxEnergy
https://twitter.com/despos
https://linkedin.com/in/dinoesposito

3. “A horse. A horse.
My kingdom
for a horse.”
King Richard the Third,
William Shakespeare

4. “A block. A block.
My kingdom
for a block in the
chain.”

5. The hottest buzzword of 2017
BLOCKCHAIN
Neither a technology nor a product

6. The Gold Rush

7. Same Trigger?
 Money
 Success
 Stability
 Change of life
 Whatever
but
QUICK

8.  Bitcoin success created an aura of magnetic mystery
around Blockchain
 Use of Blockchain advocated in business domains
❑ Finance, healthcare, supply-chain, identity, education, energy

9. WHAT IS BLOCKCHAIN, EXACTLY?
 Linked list of blocks
 A block is a group of ordered transactions
 A transaction is a collection of information
❑ Atomic
❑ Consistent
❑ Integer
❑ Durable

10. Immutable, append-only, distributed
A new type of
database

11. BLOCKCHAIN
Bitcoin
Cryptocurrencies
Everything else

12. BLOCKCHAIN FACTS
 Created to solve specific Bitcoin problems
❑ Decentralized storage of financial transaction outcomes
❑ Avoid double-spending of digital money
❑ Clear breakthrough for the cryptocurrency space
 Information replicated on all nodes of the network
❑ Maintains full history of assets in the node
 Update operations subject to consensus
❑ Necessary to ensure transactions are synced up across the network

13. Decentralization
is the magic word!
No single point of failure
No single authority to trust
Immutable status of facts

14. ISSUES of DECENTRALIZATION
 What if the database gets corrupted?
❑ Development issues—must work right the first time and forever
❑ Any fix requires the coordination and consensus of all actors
 Actors must validate but must be rewarded for it
❑ Incentive system is tough to design
❑ It must be effective to ensure data is consistent and coherent
 Costs of operations
❑ Thousands of copies to stay in sync

15. Centralized vs. Decentralized
 Consistency and reliability are far cheaper in a
centralized system
 Control of users is much easier in a centralized system
❑ Including misbehaving users
 Backward compatibility must be a certainty (in any case)

16. Costs of Scalability
 Same data kept in hundreds or thousands of places
than in a single place
 Transmission, verification and storage overhead
Vertical scalability of a distributed system!

17. VS

18. Panacea for what?

19. Finance
Energy
Supply chain
Healthcare
THE INDUSTRY
Long overdue IT upgrades

20. Upgrading IT is Hard and Expensive
 Blockchain is an attempt to sugarcoat the (real) IT bill
 Blockchain doesn’t fit the use-cases it is pushed for
❑ Hard to update whereas all industry needs is freedom and flexibility to
change and expand to seize business opportunities

21. Not a breakthrough
 Blockchain is a storage paradigm
 It’s not something you download and install
 Applications to use this storage paradigm
❑ Highly inefficient compared to centralized storage
 Different from what was Internet 20 years ago

22. What if I want to use
it, anyway?

23. BAIDU
Trust
Oracle
Blockchain
Cloud Service
IBM
Blockchain Service
Microsoft
Azure
Blockchain
SAP
Blockchain Service

24.  Four core modules
❑ Distributed ledger, consensus, membership, smart contracts
 Permissioned and private
 Consensus at transaction level only involving parties
 Smart contracts written in Go and Java
 Maintained by The Linux Foundation
Hyperledger Fabric Modular and extendable, generic Blockchain platform

25.  Explicit purpose of recording business agreements
among registered financial institutions
 Permissioned and private
 Consensus at transaction level only involving parties
 Smart contracts written in Kotlin and Java
❑ Contracts contain legal prose
 Maintained by R3
Corda Specialized distributed ledger for financial industry

26.  Generic Blockchain platform
 Permissioned and permissionless
 Consensus via proof-of-work
❑ All participants have to agree upon a common ledger
❑ All participants have access to all entries ever recorded
 Smart contracts written in Solidity
 Maintained by community of developers
Ethereum Decentralized platform to run smart contracts

27. Let’s talk energy

28. 1. A software engine defines the Blockchain
algorithm and the ad hoc marketplace
2. Software is distributed in a networks of
nodes
3. A portion of the software will also monitor
access to the power grid
4. Prosumers and consumers get an
account to the marketplace app
5. Prosumers have an IoT device that
monitors what’s been produced and
receives signals from the marketplace to
start/stop
6. Prosumer’s device generates tokens of
energy to be produced
7. Prosumer’s device places SELL orders to
the marketplace via the app for tokens of
energy
8. Consumers place BUY orders to the
marketplace via the app
9. The marketplace matches orders and
stores results permanently
10. The database of the marketplace is
shared across the network
Using Blockchain in the energy space

29. IoT
device
Ad hoc
cloud
Upload
to the cloud
Domestic
consumption
Domestic
production
Production
forecasts
Weather
forecasts Price
forecasts
Algorithmic
decision
P2P
energy
trading

30. Do we really need
a Blockchain for this?

31. Ever used DocuSign?
It could have been Blockchain
but it’s not.

32. E-commerce
Nobody did it until Internet became a commodity
IoT
Nobody did it until smart devices became affordable
???
Nobody did it until Blockchain became affordable
BREAKTHROUGH

33.  Identity
❑ One global digital identity owned by everyone
 Health
❑ Medical records can be shared across countries and hospitals
 Education
❑ Certificates, immutable and certain, held and shared across companies
 Property
❑ Whether land or intellectual, property is a contract globally valid

34. Fight corruption? Fight fraud?
Fight costs of
intermediation?
Fight costs of
financial
operations?
Fight costs of
figuring out
identities?
World Economic Forum
https://www.weforum.org/communities/the-future-of-blockchain

35. “Most of the time,
Blockchain is a
solution waiting
for a problem.”
https://www.youtube.com/watch?v=uaYfD6_xX30

36. Thanks!
https://twitter.com/despos
https://linkedin.com/in/dinoesposito

37. BLOCKCHAIN & CRYPTO VALUES CONF | June 14 - Milan