Embed Size (px)
Citation preview
Blockchain: Journey to a decentralized Internet
Who am I?
• CTO at Setpay
• Interests: open source hardware, payments, blockchain, social impact of disruptive technologies
What we are going to talk about today?
• Bitcoin
• Blockchain
• Smart Contracts
• DAOs
• The future
What should be the result of this talk?
• More people interested in the technology
• A clearer idea about the impact of the technology
• A seed for new groups working on the technology
What problem does Bitcoin solve?
• Byzantine Generals Problem. • Imagine a group of generals of the Byzantine army
camped with their troops around an enemy city. Communicating only by messenger, the generals must agree upon a common battle plan. However, one or more of them may be traitors who will try to confuse the others. The problem is to find an algorithm to ensure that the loyal generals will reach agreement.
• The fundamental question of the Byzantine Generals Problem is how to establish trust between otherwise unrelated parties over an untrusted network like the internet
What problem does Bitcoin solve?
• "For the first time, two people can exchange a piece of digital property, without any prior relationship, and in a secure way, over the Internet," Jeff Garzik, one of Bitcoin's core developers
• It removes the middle-man (the element of trust)
The origins
• The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto
• Bitcoin is the first implementation of a concept called "crypto-currency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority.
Bitcoin today
• Is a global currency (symbol BTC) • Not issued by any entity (No third-party trust
required) • Peer-to-peer / decentralized • Trading over the internet • Protocol is open source • Somewhat anonymous • Protected by strong encryption • If you know the secret “account number” the
coins are yours
Bitcoin today
• All-electronic
• Fast transactions
• Low-cost transactions
• Divisible down to 0.00000001 BTC
• Irreversible trades
• No double-spending
• Maximum of 21M issued
Blockchain explained: the blockchain
• The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain.
• The Blockchain is a book of accounts that is divided into batches of transactions, or blocks, which are naturally a collection of transactions. Bitcoin uses a number of technologies that came before it, including decentralized file sharing, Digital Signatures, Hashing and the new technology Blockchain.
• Double spending
– Keep a central ‘ledger’ of all transfers
• Register all transfers on the ledger
• Recipients can check if money has already been ‘spent’
• How to do this in a decentralized fashion?
Blockchain explained: the blockchain
• All participants keep a copy of the ledger (divided into ‘blocks’ of many transactions)
• The blocks are connected through hash chaining
Blockchain explained: Mining
• Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain
• This is the way new Bitcoins are created – Miners publish blocks on the blockchain – As a reward for publishing blocks, they get to keep Bitcoins. (50 for the first 4 years, 25 now, halving every
four years) – Miners also get transaction fees
• They try to find a random nonce (a little random data) that goes into a block and makes the block have a (SHA256) hash that (in binary) starts with a certain amount of 0's. The more zeroes the more rare hash is. A good hash' outcome is not predictable, and so you have to try a lot of times to find a good nonce.
• The amount of zeroes are based on how difficult it is supposed to be to find a block. In Bitcoin it adjusts to have a new block every 10 minutes (on average, given the rate at which previous blocks are found).
• If there are disagreements about valid blocks, the blockchain can fork. Miners add to the longest good chain
• High upfront investment • Technology is changing rapidly • Now requires specialized hardware (ASIC chip) • The combined computing power of the miners is thousands of times more powerful than the most
powerful super computers in the world
Blockchain explained: a transaction
• A transaction is simply a cryptographically verifiable instruction from the sender to transfer value the sender owns to one or more valid recipients. The sender(s), and receiver(s), have cryptographically verifiable identities, known as addresses. – { "txid": <a unique transaction identifier> – "inputs": <an array of inputs> – "outputs": <an array of outputs> – "tx_hex": <transaction content as a hexcode string> – "blockhash": <a unique block identifier this transaction belongs to> – "time": <the time this transaction's block was processed> – "confirmations": <number of blocks that confirmed this transaction> }
• The very basic parts to understand in the above snippet are: a transaction has
inputs, and outputs. The inputs are specifications of which values to transfer from the sender's address(es), and the outputs are specifications of how much of the total input value each recipient's address(es) receives. Inputs in this transaction were outputs in a previous transaction, with the exception of when the network generates new coins.
Blockchain explained: Mining
• Just don’t do it!!
Current uses
• Bitcoin
• Alt currencies (Litecoin, Feathercoin, Mastercoin, Devcoin, Dogecoin …)
• NameCoin
• Storj (http://storj.io/)
• Ripple
• Ethereum
• Proof of Existence
Future uses
• Timestamping
• Voting system
• File storage
• Crowdfunding
• Music distribution
• Multiparty computation protocols based on the blockchain
• Smart payments
Future uses
• Certificate authorities
• Micro-finances
• Land titles
• Grades
• Wills
• Documentary records (photos, audio, video)
• Peer-to-peer gambling
• Nuclear launch codes !!
Smart contracts
• Smart contracts are computer programs that can automatically execute the terms of a contract. Someday, these programs may replace lawyers and banks for handling certain common financial transactions.
– Codius
– Ethereum
DAOs (Decentralized autonomous organizations )
• It can be thought of as a corporation run without any
human involvement under the control of an incorruptible set of business rules. These rules are typically implemented as publicly auditable open-source software distributed across the computers of their stakeholders.
• Autonomous entity • No central control • No dependency on legal contracts • All resources and funds autonomously managed • Self-enforcing smart contract on a cryptographic blockchain
Blockchain today
• It is an attractive technology for investors. Not only in the financial sector(Blockchain Wallet secured $30 Million Investment)
• Regulatory issues
Do you want to have some fun?
• Bitcoing.org
• https://blockchain.info/api
• BitcoinJ (is a Java implementation of the Bitcoin protocol)
• https://www.biteasy.com/developers
• Blockchain explorers
Programadores do BlockChain
• Comunidade galega interesada na difusión e o uso da tecnoloxía en diferentes ámbitos
