1.
Blockchains and
Cryptocurrencies
Catheryne Nicholson
BlockCypher CEO & Co-founder
catheryne@blockcypher.com

2.
Agenda
•History of money
•Current state of blockchains
•About BlockCypher
•Future of blockchain applications

3.
History of Money

4.
Failure
is
Opportunity

5.
Bitcoin Genesis Block
Jan 3, 2009 Headline:
“Chancellor on brink of
second bailout for banks."
– Satoshi Nakamoto

6.
The Age of Cryptocurrencies

7.
Cryptocurrency
+
bitcoin blockchain

8.
Cryptocurrency Market Caps

9.
Why You
Can’t Cheat
Bitcoin

10.
Hashing power needed to take over
the Bitcoin network (DRAFT)
3500 Petahash per second
OR
CPUs
OR

11.
bitcoin ≠ blockchain ≠ Bitcoin
The Technical Innovation
(distributed ledger)
Cryptocurrency
(incentive)
E.g. ether, bitcoin
Protocol
(parameters)
Ethereum, Bitcoin
What’s the difference?

12.
What’s a Blockchain?
Immutable, cryptographically verified, Proof-Of-Work secured accounting ledger

13.
Block 50
PoW: 0026f34d197f
Transaction
b39fa6c39b
Transaction
7301b5952
Transaction
6961d06e4
Block 51
PoW: 0026f34d197f
Transaction
b39fa6c39b
Alice => Bob
Transaction
6961d06e4
Block 52
PoW: 0026f34d197f
Transaction
b39fa6c39b
Transaction
7301b5952
Transaction
6961d06e4

14.
Unlocks prior TX funds... ...then lock with new rules
What are Transactions?

15.
Blockchains Flavors (DRAFT)
• Open (e.g. Bitcoin, Ethereum)
• Permissioned (e.g. Corda, Eris, Hyperledger, Symbiont, etc.)
• Private (Beth, BCY, BKCoin, etc.)

16.
Trust (DRAFT)

17.
BlockCypher
Blockchain Web Services (BWS)

18.
Ken GoldmanTim Draper Jerry YangNasir Jones Shawn Byers Sanjiva Weerawarana
BlockCypher Investors

19.
Base Protocol (Bitcoin, Ethereum, etc.)
Mining
Applications/Services
Users/Usage
Middleware
Blockchain Cake
Infrastructure

20.
Blockchain Client Architecture
P
e
e
r
s
Chain
Pool
Scripting
Validation
Store
Wallet
Addresses
Crypto
Miner
Primitive APIs
Wire
Format
≈ Running Excel as database
Bitcoin and
Ethereum
clients

21.
Crypto
P2P
Consensus
Smart ContractsProof of Work
Proof of Stake
Key
Security
Proof of ???
Scaling
Lightning
Privacy
zkSNARKs
MimbleWimble
Teechan
HSMs
Hardware
Wallets
Bitcoin Script
Serenity
Viper
Decentralisation
Incentives
Game Theory
Cryptoeconomics
Mechanism Design
Security
MiningChip
Design
Energy Price
GPUs
Data Centers
DDoS
Sybil
Attacks
51%
Attacks
Selfish
Mining
Light Clients
SPV
Pruning
Sharding
Elliptic Curve Cryptography
Hashing
Network Layers
Gossip Protocols
DHTs (Chord, Kad)
Block Ciphers
Random Oracle
Hashcash
Staking Attacks
Async I/O (poll, epoll)
Language Design
Type Systems
Parsers / Compilers
VMs, Interpreters
Randomness
Ciphers: AES, RSA
Secure Enclaves
FIPS 140
PKI
Schnorr Signatures
Segregated Witness
Hash Locked
Contracts
OnioNetworks
Trusted Execution
Environments
Ring Signatures
“Moon Math”
Pairing-based Crypto Commitment Schemes
Zero Knowledge
Distributed Computing
Bloom Filters
Replicated State Machines
Merkle/Sum Trees
Stack Languages
Economics
Bayesian Statistics Market Dynamics
Protocol History
Logic Gates
Geothermal/hydro
power
Cooling Systems
Hardrware
Procurement
Power Efficiency
Heat Dissipation
Intel SGX
Threat Modeling

22.
Blockchain-as-a-Service (BaaS)
Locally...
The road to production...
(minimum 2 years, $1M)

23.
Use BlockCypher APIs & Services
● Analytics API - queries for blockchain information
● Asset API - issue & handle assets on the blockchain
● Confidence Factor - predictive & real-time analytics for unconfirmed transactions
● Contract API - call contract functions on blockchain over HTTP
● Data Endpoint - place data or a hash on a blockchain
● Microtransaction API - micropayments on-chain
● Multiple Address Wallet API - multiple addresses under single wallet name
● Multiple Blockchains - Bitcoin/Ethereum type; single API call to create new chains
● Multisignature API - multiple signature key management
● Payment Forwarding API - forward, consolidate, add commissions to payments
● Transaction API - build transactions easily
● WebHooks and WebSockets - monitoring & notifications on blockchain events

24.
Scalable Blockchain Architecture

25.
HTTP HTTP HTTP
T
C
P
T
C
P
Distributed Datastore
Distributed Locks
Messaging
HTTP
Blockchain Layer
Web API Layer
Peer to
Peer
BlockCypher
Cluster
Other Private Cluster
Bitcoin, Ethereum,
etc.
BaaS Architecture

26.
BlockCypher Analytics Framework

27.
B
i
t
c
o
i
n
C
u
s
t
o
m
BlockCypher
● Multiple blockchains on same
infrastructure
● Multiple datacenters
● No single point of failure
● Secure & hardened servers
● Linear scaling
● Uptime 99.999%
Cloud-optimized,
enterprise-grade blockchain
infrastructure
Blockchain-agnostic
infrastructure
E
t
h
e
r
e
u
m

28.
BlockCypher Benefits
6+ months faster to market
35+% less cost

29.
The Biggest Little Blockchain Company
Customers

30.
CRYPTIV

31.
Blockchain Use Cases

32.
United States Citizenship and Immigration Services.
U.S. Customs and Border Protection.
Federal Emergency Management Agency.
U.S. Immigration and Customs Enforcement.
Transportation Security Administration.
United States Coast Guard.
National Protection and Programs Directorate.
United States Secret Service.
Data Management and Analytics
U.S. Department of Homeland Security

33.
● Machine learning
○ Transaction clustering
○ Spark GraphX for Graph analysis
● Statistical analysis
○ Geographical, origin, relay,
transaction size, etc.
● Monitoring for anomalies
● Tracking $70M heist (BitFinex)
○ Largest transactions, transaction
shape & origin
Financial Crime

34.
Custom Ethereum-based blockchain:
● Smart contract with ability to call an
external risk management system
during execution
● API-driven, open marketplace
● Private cloud hosted
● Block processing near real-time
● Transaction round-trip cycle time in
milliseconds
● 1000+ Transactions per second (TPS)
w/payload on desktop
Payment Cards

35.
Identity Management
Challenges
● High cost of fraud
($B)
● Lack of adoption of
security
● Disclosure
● Privacy
● Ease-of-use
Solution
● User manages
identity (e.g.
biometrics) on
Shocard mobile app
● BlockCypher
publishes identity to
blockchain
Benefits
● 6 months saved in
ramp up time
● 35% costs saved in
development
● Increased scalability
and reliability
● Improved code
maintenance
Transaction API
Authentication

36.
P2P Payments
Challenges
● High transaction fees
● No single P2P
platform
● Currency fluctuation
● Lack of good testing
environment
Solution
● Abra enables person
to send payment to
any mobile phone
● BlockCypher provides
notifications (e.g. for
payments)
Benefits
● Users protected from
market volatility
● Faster deposits
● Cross-border payments
● ~30% development
cost
Deposit $200
(XBT spot at 200)
Send $200
(XBT spot at 160)
Lender
(XBT spot at 160)
XBT down 20%,
Abra holding 1.25
XBT
BCY
Webhooks

37.
Machine-to-Machine
Drone, parking meter,
remote server,
self-driving car, POS, VR
device, etc.

38.
Let’s Code a Central Bank
contract Coin {
address minter;
mapping (address => uint) balances;
function Coin() {
minter = msg.sender;
}
function mint(address owner, uint amount) {
if (msg.sender != minter) return;
balances[owner] += amount;
}
function send(address receiver, uint amount) {
if (balances[msg.sender] < amount) return;
balances[msg.sender] -= amount;
balances[receiver] += amount;
}
function queryBalance(address addr) uint {
return balances[addr];
}
}