INTRODUCTION BLOCKCHAIN TECHNOLOGIES · 2018-11-14 · Of a blockchain technology almost always open source Of a blockchain infrastructure instance varies: company, group, mining,

INTRODUCTION BLOCKCHAIN

TECHNOLOGIESNyenrode | Breukelen, 28 March 2017 | M. Oskar van Deventer

BLOCKCHAIN RAISES MANY QUESTIONS

What is this "blockchain" stuff that everybody is talking about?Concrete examples of use, financial, voting, otherWho guarantees the correct operation and security of the system?Legal aspects, risks, uncontrollability, opposition by "middle man"

What does blockchain mean for my business?What are blockchain applications for my business?How does it make my business better, faster, cheaper, …?How can I use blockchain against my competitors?

Where do I start with my blockchain use case?What are my first steps?Which parties or suppliers should I contact?

28 March 20172 | Introduction Blockchain Technologies

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CONTENTS

A practical definition of Blockchain

Technology: a blockchain is like a computer

Ecosystem: a blockchain is like a party

Technologies and technology instances

3 | Introduction Blockchain Technologies

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28 March 2017

A PRACTICAL DEFINITION OF BLOCKCHAIN *

* David Siegel, https://medium.com/startup-grind/what-is-this-blockchain-thing-a5d2abb99297

20 March 20174 | Towards viable blockchain ecosystems

“A blockchain is a shared ledger that everyone trusts to be

accurate forever”

CATEGORIES OF BLOCKCHAIN USE *

Store valueCurrency, ownership, tokens

Exchange valueTrade currency, ownership, tokens

Store permanent recordsProvenance, registry, identity

Execute programsAdd business logic to the above

* David Siegel, https://medium.com/startup-grind/what-is-this-blockchain-thing-a5d2abb99297

20 March 20175 | Towards viable blockchain ecosystems

A BLOCKCHAIN IS LIKE A COMPUTER

Real-world computer

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Real-worldcomputer

Real-worldcomputer

Real-worldcomputer

Consensus protocol achieves consensus about the state of a

blockchain computer

ApplicationsOperating system

Hardware

6 | Introduction Blockchain Technologies 28 March 2017


blockchain

Cryptographically linked in a chain-like fashion (using hash functions)

Collection of modifications of the ‘shared truth’ *.

* e.g. a shared transaction ledger or a shared virtual-computer state

…Prev: H( )Transactions: H( )…



Block header

Block content(transactions)

28 March 2017

PRIVATE/PUBLIC, PERMISSIONED/UNPERMISIONED


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf

28 March 2017

BLOCKCHAIN FEATURES & CHALLENGES


Consensus Speed

Privacy

Security

Sustainable

Features Challenges

Validity

Uniqueness

Immutability

Authentication Cost

A blockchain computer is

Highly reliable

But also …

SlowMemory limitedExpensive

28 March 2017

A BLOCKCHAIN IS LIKE A PARTY

Somebody has to take the initiativeInvite friends to help you with the organisation

Make decisions togetherWho arranges what?How are things paid?Outsource food or location?Whom to invite? Open, closed?How do we decide on things?

Execute the plan and start the partyInvitations, publicity, changes…more work ☺☺


EXAMPLE USE CASE: PAY PER CONTENT ITEM

More and more people create content items independentlyProfessional, semi-professional, amateur, …Video, blog, column, article, photo, app, …

Much money and power goes to the "middle man"Broadcasters, VoD services, magazines, newspapers, websites, …

"Could we have a marketplace where independents could sell their content directly to consumers?"

"How do we prevent that our new marketplace turns into an expensive and powerful middle man"


OK. LET'S START THE PARTY PLANNING

Who shall I involve in planning my "pay-per-content-item" party?What will our system look like to users, mock-ups, proof-of-concept?How do we decide on the functionality of the system? Governance?Who invests in what aspect of the system? Business models?Make, buy, open source?What will be our legal status?(Note: a cartel on a blockchain is still a cartel)On what (blockchain?) infrastructure will we run our system?(Our own? A third-party one?)PoC � pilot � alpha � beta � operational � …… more work ☺☺


E.g. Techruption Blockchain Acceleration28 March 2017

TECHNOLOGIES AND TECHNOLOGY INSTANCES


Transactional Data-oriented Smart contracts Swiss Army Knife

Value transferon the blockchain

Databaseon the blockchain

Computingon the blockchain

Assemble your own blockchain

BitcoinRipple…

BigchainDBMultichain…

EthereumEris/Monax…

Hyperledgervarious BaaS…

*Thanks to Karim Grini of Accenture for providing this classification

28 March 2017

BITCOIN

Cryptocurrency for value transfer & value storagePermissionless: proof-of-work, "mining"Single main instance, several clones and variants (altcoins)Business models

Validators ("miners") get awarded mining & transaction feesBitcoin Foundation went bankrupt, developers now sponsored by MITExchanges, merchants and consumers each have their own business modelsVarious business models for wallet software & services

GovernanceOpen source; two or three persons have keys to bitcoin core softwareReddit discussions, anarchistic civil wars, censorship, DDoS, personal threatsVoting about Bitcoin Improvement Proposals via mined blocks


ETHEREUM

Emulating a world computer ("skynet")Permissionless: proof-of-work, "mining", ambition to switch to proof-of-stateSingle main instanceBusiness models

Similar to bitcoinGovernance

Open source, centred around Vitalik ButerinEthereum Foundation, executive director, steering board, advisory boardLots of "hard forking" (=non-backward-compatible patching)


RIPPLE

Value transfer of real-world assetsPermissioned, single instance

Validators are named parties, validatorship is announced via press releaseTrusted gateways (e.g. banks) issue euros, dollars, gold, silver and bitcoins on the Ripple chain

Business modelsDeveloper Ripple Labs sells its "shares" in the form of XRP cryptocurrencyGateways and exchanges charge feesSystem integrators to integrate Ripple in bank back-endsUnclear how validators get rewarded

GovernanceCentral company Ripple LabsVoting about new features and fee changes using Ripple consensus mechanism


BIGCHAINDB

Database for create-read-update-delete of entriesPermissioned, no single central instance

Voting-based consensus algorithmBusiness models

No cryptocurrencyLike any distributed database: each instance would have its own owners and business model

GovernanceOpen source, led and decided by BigChainDB companyEach instance would have its own owners and business model


HYPERLEDGER FABRIC

Modular set-up for DIY blockchains, "blockchains for business"No single central instance Permissioned or permissionless, decided per instance

Voting-based consensus algorithmBusiness models

Different per instanceSystem integration and customer projects

GovernanceFormal Hyperledger consortium, initiated by IBMMix of standards body (requirements & architecture working groups) and open source community


IN CONCLUSION

MetaphorsBlockchain is like a computerBlockchain is like a party

Different blockchain technologiesPublic – privatePermissioned – permissionlessValue-transfer – database – computer – Swiss army knifeSingle instance – many instances

Governance and business modelsOf a blockchain technology � almost always open sourceOf a blockchain infrastructure instance � varies: company, group, mining, fees, integration, …Of a blockchain application � varies: per sector, per application, …


28 March 201720 | Introduction Blockchain Technologies

LET US HAVE A GREAT BLOCKCHAIN PARTY!

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INTRODUCTION BLOCKCHAIN TECHNOLOGIES · 2018-11-14 · Of a blockchain technology almost always open source Of a blockchain infrastructure instance varies: company, group, mining,