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[Madmagz] The Blockchain
This document provides an overview of blockchain technology including definitions, applications, and issues. It begins with definitions for blockchain, distributed ledger, and related concepts. Applications are discussed in both financial areas like bitcoin and ethereum, as well as non-financial uses in areas like IoT, healthcare records, and digital rights management. Technical issues addressed include scalability challenges and the debate around decentralization. A variety of industries are exploring blockchain including finance, government, and enterprise software through initiatives like Hyperledger.
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[Madmagz] The Blockchain
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- 2. Overview I. Definition II. Issues III.Applications IV. Discussion
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- 4. Motivation On the 17thof August a Tesla 3 would have cost you 7.9 Bitcoin In 2011 it would have cost you 17,500,000 Bitcoin
- 5. Motivation Figure 1: Bitcoin/USDexchange rate,10 year period (source: xe.com (date of access: 14/08/2017)) START
- 6. Motivation ● Nov 2008:Satoshi Nakamoto's “Bitcoin: A Peer-to-peer Electronic Cash System” white paper ● Byzantine generals problem ● Bitcoin’s badbuzz and goodbuzz ● The fifth evolution of internet
- 7. Motivation Figure 1: Bitcoin/USDexchange rate,10 year period (source: xe.com (date of access: 14/08/2017)) START
- 8. Motivation Figure 1: Bitcoin/USDexchange rate, 1 week period (source: poloniex.com (date of access: 14/08/2017))
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- 12. The Concept Block is broadcastto every party in the network Youssef wants to send Tanguy some money 1st Block is created online and represents the transaction Those in the network approve the transaction and validate it Block is added to the chain which provides permanent nonrepudiable and transparent record of the transaction Tanguy receives the money from Youssef
- 13. Facts and Figures( as of 17/08/17) ● Volume of Bitcoin (24h): $2,171,310,000 ● Total size of Bitcoin Blockchain: 128789 MB ● Bitcoin Market Cap in USD: $73,338,186,368 ● Ethereum Classic Market Cap in USD: $29,224,770,170
- 14. The concept ● DistributedDatabase ● Ledger ● Cryptography ● Consensus ● Token and Cryptocurrency ● Time Stamp ● DAO (Decentralised Autonomous Organisation) Public Permissioned Private
- 15. The maths ● Proofof work (e.g. Hashcash for bitcoin) ● Merkle Tree ● Chain ● Hash ● Nonce ● Nodes ● Miners ● Network Block Chain Network
- 16. Digital Record ● TransactionNumber ● Address ● Size ● Block Number ● Date & Time
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- 18. So what makesBlockchain so secure? ● Hash function enforces clear and thorough records ● Multiplicity of miners (5000+ for Bitcoin) and consensus requirement ● Proof-of-work ● Protocol definition 1 MB max data per block ● Quantity of addresses ( 10⁴⁸ for Bitcoin while there are 10⁵⁰ atoms on constituting Earth)
- 19. DAO ● Decentralized AutonomousOrganisation ● Transfer organisation to a blockchain and write all interactions as smart contracts ● No intent, feelings or discrimination ● One owner: ○ decides on voters for protocol ○ determines given time for voting ● Creates need for KYC and AML rules
- 20. Finance ● Significantly increasesspeed of transaction by deleting middleman and central authorities ● More efficient markets ● “Annual revenues earned by the banking system for processing payments are huge, at $1.7 trillion, and rising” ¹ ● Cross-Border Payments ● Insurance: Claims processing ● http://uk.businessinsider.com/santander-develops-blockchain-i nternational-payment-app-with-ripple-2016-5 ¹ https://www.economist.com/news/finance-and-economics/21694531-all-money-spent-technology-banking-not-efficient-high-tech-meets-low(date of access 03/08/17)
- 21. IoT “On theblockchain, nobody knows you’re a fridge” Richard Brown ● Preventing connected objects from spoofing and other forms of hacking ● US Homeland security reportedly working on designing blockchain protocols for IoT ● Also includes: ○ Hospital system ○ Self-driving cars ○ Safety system ○ Many more
- 22. Smart Contracts ● Healthcare ●Music ● Intellectual Property ● Passports ● Birth, wedding and death certificates ● Personal ID ● Public Community (councils)
- 23. Ethical and regulatoryissues ● How decentralised can a blockchain be to function in our centralised regulated society? ● Example: intervention of Swiss jurists after the The DAO hack ● Towards government legal records secured on a blockchain https://news.bitcoin.com/worlds-top-10-bitcoin-friendly-countries/ ● The future of lawyers, notaries and lawmakers https://itunes.apple.com/fr/podcast/la-blockchain-va-t-elle-r%C3%A9volutionner-le-droit/id1150055692?i=1000377215258&mt=2
- 24. Technical issues ● Requiredcomputer capacity - very powerful Miners ● Multiple data centers? ● Forks ● Number of users ● Installed protocol releases
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- 26. Overview A selection of… -Financial - Non-financial
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- 28. Source : https://coinmarketcap.com/(date of access: 28/08/2017)
- 29. Source : https://blog.coinbase.com/a-beginners-guide-to-ethereum-46dd486ceecf(date of access: 04/08/2017) Bitcoin vs. Ethereum Info from end of Feb 2017. What about today in terms of market cap?
- 30. Source : https://coinmarketcap.com/(date of access: 04/08/2017)
- 31. Bitcoin ● Satoshi Nakamoto ●Digital Money ● Limits: ○ Max block size 1MB (~2000 transactions during the week) - Average time between block gen. 10 minutes ○ Protocol less compliant to nation states than e.g. ethereum Start mining @https://bitcoin.org/fr/telecharger or join a mining pool
- 32. Ethereum ● First describedin 2013 by Vitalik Buterin ● Full protocol still to be released ● Smart Contracts ● New language: Solidity (e.g. here) ● Homestead → Metropolis → Serenity ● Proof-of-work → proof-of-stake (keeps inflation to zero) ● Cryptocurrency: Ether (a.k.a gas)
- 33. Ripple ● For movingand trading value globally ● Even works with two unlike assets and in non-liquid markets ● Low cost, very high security, record time ● Serves primarily financial institutions ● All about TRUST ● No proof-of-work
- 34. Factom ● Industry focused ●Factom Inc. builds tools and products on top of the protocol ● Integrates and bridges other blockchains thus improving its security ● Smart contracts
- 35. Augur ● https://augur.net/ ● Betweenfinancial and non-financial ● Users log in predictions on a blockchain ● Reward according to precision of prediction ● Big volume → average prediction is correct
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- 38. Verisart ● App availableon iOS ● 2 step art referencing ●
- 39. Filament ● Securing IoTdata ● Hardware : Low power (4µA at sleep) nodes ● Software : Source : https://filament.com/assets/downloads/Filament%20Security.pdf (date of access 04/08/17)
- 40. Colu App ● Creatingvery local currencies (Liverpool pound, East London Pound, Tel-Aviv Jaffa shekel …) ● Boosting local economies and rewarding users ● UI QR code exchange from smartphone to smartphone
- 41. LaZooz ● Ride sharingapp based on a blockchain reward system ● Fair share - fair fare ○ Like-minded people ○ Optimisation of car space ● Zooz mining app ○ Receive cryptocurrency by ■ driving ■ Making the community grow
- 42. Blockstack ● https://blockstack.org/ ● “Anew internet for decentralised apps” ● Add blockchain security to any internet app ● Dev kit available today (user on waiting list) ● Music, Health, Payments ● Available today: ○ Todo list ○ Single page server-free Javascript app ○ CLI intro
- 43. Blockverify ● http://www.blockverify.io/ ● Anti-Counterfeitsolution ● Gives a tag to each authentified product (whether authentic or counterfeit) ● Blockchain traces the product ○ Pharmaceuticals ○ Luxury items ○ Diamonds ○ Electronics
- 44. Storj ● https://storj.io/ ● “Blockchainbased end-to-end encrypted, ditributed object storage, where only you have access to your data” ●
- 45. HyperLedger ● A LinuxFoundation initiative ● Source: https://www.hyperledger.org/about
- 46. HyperLedger ● Five projects: Fabric, Iroha, Sawtooth, Burrow, Indy ● Fabric is the most used one for developing blockchain based applications ● Open-source as everything from Linux ● Allows components such as consensus to be plug-and-play Source: https://www.hyperledger.org/about
- 47. How about groupslike AWS? ● AWS annouced partnership with Digital Currency Group (DCG) in May 2016 to research on a possible intgration ● In turn, DCG announced in May 2017 DCG connect dcg.co ● Updates are coming in very fast ● Race to who is the quickest ● https://azure.microsoft.com/fr-fr/blog/the-microsoft-vision-for- accelerating-enterprise-blockchain-development/
- 48. Microsoft Azure -Coco ● Latest Azure’s blockchain-related announcement ● Coco platform ●
- 49. Truster IoT Alliance ●https://www.trustediot.org / ● New open source software foundation
- 50. Enterprise Ethereum Alliance Largestblockchain alliance
- 51. So how arenation states responding ? ● https://www.wired.com/2015/12/you-too-can-get-married- on-the-blockchain/ ● https://www.coindesk.com/russias-ministry-health-launchi ng-blockchain-pilot/ ● https://www.forbes.com/sites/elaineramirez/2017 /08/09/dayli-icon-blockchain-south-korea/#48bd3 40125a7 ● https://futurism.com/congress-is-reportedly-drafting-a-bill-t hat-will-mainstream-digital-currency/
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- 53. Broad Topics ● ICOs ●IoT security ● Towards a suppression of notaries and lawyers? ● Many BC companies will advertise themselves as a gain of efficiency in record keeping (e.g. asset transactions) thanks to the decentralised property of BC. BUT this implies everyone using the same platform
- 54. The DAO: riseand fall More info here (FR) The mother of all DAOs ● Initiated by Slock.it an active community on the Ethereum blockchain ● Mid-May 2016 biggest crowdfunding in history 4 weeks over 120M$ ● 17th June 50M$+ is hacked through a fault in open source code ● Ethereum community votes on a hard fork to save sunken boat and go back to blocks before launch of The DAO ● Creation of ETH and ETC ● Fragile confidence in DAOs but still a promising field
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- 56. Merkle tree By Azaghal- Own work, CC0, https://commons.wikimedia.org/w/index.php?curid=18157888 Back to the maths
- 57. Types of network Source:Blockchain for dummies Back to top
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- 67. References ● T. Laurence(Co-founder of Factom), Blockchain for dummies, Wiley, May 2017
- 68. Useful links -Top 5 ● http://www.goldmansachs.com/our-thinking/pages/blockchain/ ● https://medium.com/@DebrajG/how-the-byzantine-general-sac ked-the-castle-a-look-into-blockchain-370fe637502c ● https://blog.cex.io/cryptonews/top-50-blockchain-startups-201 7-16158 ● https://www.ethereum.org ● https://www.coindesk.com/information/what-is-ethereum/ ● For chart lovers https://blockchain.info/fr/charts