Block chains are part of the underlying infrastructure for Bitcoins. They are the accounting portion of the bitcoin ecosystem. The art of the possible for block chains is to use them for a larger ledger systems. Any digital centralized registry (e.g., health records) can be made a part of the block chain system. Much like public and private cloud infrastructure has arisen, block chain as a platform is an emerging opportunity for entrepreneurs and innovator.

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Stop Worrying About Privacy;
Start Caring About Identity
Creating Platforms from
Block Chains
February 2015

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What are Cryptocurrencies?
1
• Cryptocurrencies are a digital financial instrument, the most well known
is Bitcoin.
• Bitcoins can be traded like currency for the payment of public and
private debts
• Transactions are performed without the need for tradition credit card or
Central (government backed) Bank
• It's designed to enable users to send money over the Internet in a user
friendly and simple manner

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Three Things to Remember
1. The value of a bitcoin is
volatile
- Like stocks
2. Bitcoin transactions are not
reversible
- Like cash
2
3. There are no bitcoins
– There are only bitcoin transactions

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Lifecycle of Bitcoin Transactions
3
Transactions are visible and
recorded for everyone to
see and examine

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Steps in a Transaction
• Only transactions may be traded
• Wallets create the transaction details
• Networks in bitcoin transactions create
transparent ledgers
• Identity is ensured by a “key” system
• Proof not trust is what the system relies
upon
– Proof establishes identity (of the transaction)
– Proof of work established in a hash
4

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Non-Repudiation
5
In cryptography, it means preventing an individual or
entity from denying that a particular action occurred
related to data

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What is the Block Chain Ledger?
6
Linear and sequential list of [bitcoin]
transactions. Validation of entries in the ledger
are derived from previous ones

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How does the Block Chain get updated?
7
• Transactions or “messages” are part of the
encryption input
• Approximately six times per hour
transactions are committed to the ledger
• Cryptographic standard SHA-256
– Produces a digest or a hash of fixed
length – 256 bits
– Mathematically “hides” the incoming
message
– One way encryption
• Nonce (Number used once)
• Proof-of-Work
– Paying for accounting

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Digest Results from SHA-256
8
fox
=
776cb326ab0cd5f0a974c1b9606044d8485201f2db19cf8e3749bdee5f36e200
fxo
=
fbf7443c4238ad48b4d28226ff7dcca5e5ab467b2c37b960ebc860703d925f52
The
quick
brown
fox
jumped
over
the
lazy
dog
=
7d38b5cd25a2baf85ad3bb5b9311383e671a8a142eb302b324d4a5fba8748c69

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What problem(s) can we solve for our customers?
1. Always have proof of a transaction
2. Global and transparent ledger system
3. Secured ledger
4. Portable and lightweight
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Identity can be guaranteed
Distributed Database

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Building an Identity
1. Define it and keep it authentic
2. Practice network listening
3. Identify your network
4. Manage it. Don’t try to control it
5. Curate your data privacy
- Selective vs. restrictive
10

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Block Chain as a Platform
11
• Opportunity to roll build and
private networks
• Create customized/
specialized front end services
• Smaller chain can run on
commodity hardware
• Multiple models for
profitability
• Create multi-party
agreements easily

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Healthcare & Beyond
Value Date Entered
Name 01-Jan-2014
Date of Birth 01-Jan-2014
Sex 01-Jan-2014
Blood Type 01-Jan-2014
Pre-existing Condition 01-Jan-2014
Treatment 1 10-Jan-2014
Treatment 2 10-Feb-2014
Treatment 3 13-Mar-2014
Treatment … 10-Apr-2014
Medication 1 11-Feb-2014
Medication 2 11-Mar-2014
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• Available and authenticated
• Distributed and not dependent
on a single network
• Event driven
– IoT ready
• Secure Health Care
Management
• Patient Centric-Model
– Dependent on everyone’s
participation
• Extend to other forms of
conventional identity
– Driver’s License
– Voter registration

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Business Networks
• Personal trust relayed into
computer proof
• Business networks such as
LinkedIn
– Multiple parties “vote” on
attributes
– Global database of skills
– Verify employment/contract
status
• Smart Contracts
– Validated and self-executing
agreements between programs
13

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Barriers to Change
• People don’t like Change
– Cost of refactoring “legacy” (eco) systems
– Behavioral/cultural changes
– The New Normal takes a while
• People say “No” to complicated things
• Price volatility makes people wary
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Inspection creates Opportunity

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Additional Use Cases
• IBM ADEPT - Autonomous Decentralized Peer-to-
Peer Telemetry
– http://www.coindesk.com/ibm-reveals-proof-concept-
Block Chain-powered-internet-things/
• Births/Ancestry
• Domain Name System – NameCoin
• Bitcoin Series 24: The Mega-Master Blockchain List
– http://ledracapital.com/blog/2014/3/11/bitcoin-series-24-
the-mega-master-blockchain-list
• Any centralized registry
15

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Wrap Up
• Opportunity comes from inspection
• Identity is as important as security
• Validated identities reduces risk in an
ecosystem
• Proof-of-Work is key and requires
– Incentives (e.g., “mining”)
– Distributed and cost effective compute power
• SETI/BOINC software
16

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Bio – Lawrence I Lerner
17
Lawrence is a corporate entrepreneur with a keen eye for “market relevance” who envisions and builds
digital products and services across the globe. An early interest in taking apart complex problems honed
his multi-disciplined solution approach. He’s launched more than a dozen $10MM+ corporate products
across industries (Retail, High-tech, Media and Entertainment) and IT services. With a passion for growth
and transformation his expertise is in Process Engineering, Strategy, Enterprise Architecture, Big Data,
Mobile/Social Media, IT Security and Product Marketing.
While successfully creating businesses on three continents, Lawrence served as an executive at
PricewaterhouseCoopers, Cognizant and other companies. Over the years his teams have received
industry recognition seven times for excellence. He has created business lines ($100MM+) and launched
new product/services for some of the worlds’ top brands (Motorola, Catalina Marketing, Macrovision,
DHL, Debenhams). While at PwC he managed a $60MM venture fund for early stage technology
companies. Over the past 20 years, he’s helped launch eight early stage companies.
In 2005 his work was recognized in Dun & Bradstreet’s Annual Report for transforming their core
business platform DnBi, resulting in 35% growth. In 2009 the industry analyst Gartner recognized his
solution for Business Process Management as “best in class.” As a Board Member for PNI Digital Media
(now Staples), the premier online digital solutions provider for Retailers, he directed new business
initiatives. He chaired the company’s Governance committee.
Examples of everyday digital products he’s defined, designed and delivered:
• Loyalty programs for Discover Card, The New York Times and Safeway from the ground up. This resulted in seven digit revenue
streams
• Point-of-Sale Credit and Debit cards platforms for Follett (installed across a base of 1,800 college campuses)
• Wireless ecommerce strategy for Motorola
• Social media platforms for social listening and storytelling
Lawrence is a thought leader in Change Management, Payments, Social Media/Mobility, and Retail. He is a contributing writer for Wired, The
Christian Science Monitor and PSFK. In 2012 his book ‘Facebook for Your Business’ was published. He is a frequent speaker, contributing
writer and media guest on the New Normal of business and IT.

19. excellence.perspective.innovation.
Thank You!