Deputy City Treasurer - City of Torrance March 19, …...Chanticleer Holdings “Mobivity Merit”...
Transcript of Deputy City Treasurer - City of Torrance March 19, …...Chanticleer Holdings “Mobivity Merit”...
Blockchain Technology – The Wave of the Future
William Yu, CPA, MBA
Deputy City Treasurer - City of Torrance
March 19, 2018
Blockchain Technology – The Wave of the Future
“Coca-Cola, U.S. State Dept. to use blockchain to combat forced labor” 20 million forced labor worldwide
(Reuters, 3/16/18)
“How blockchain could save federal agencies billions” DLA: $800 million 302 programs: $619 billion (CNBC, 3/16/18)
Blockchain Technology – The Wave of the Future
Blockchain Technology – The Wave of the Future
Blockchain Technology – The Wave of the Future
Blockchain Technology – The Wave of the Future
Blockchain Technology – The Wave of the Future
Chanticleer Holdings “Mobivity Merit” to its royalty
program
NASDAQ: BURG 50% ↑
Kodak launching KodakCoin! Image rights of photographers “Photo-centric cryptocurrency” to be
used as payment for photographs NYSE: KODK 90% ↑
Blockchain Technology – The Wave of the Future
$2.89/shareFri. 3/16/18
Source: TD Ameritrade
Blockchain Technology – The Wave of the Future
WHAT IS BLOCKCHAIN?
A chain of BLOCKS (records) A cryptographic hash of the previous
block A timestamp Transaction data
By design, a blockchain is inherently resistant to modification of the data.
It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way".
Blockchain Technology – The Wave of the Future
WHO INVENTED BLOCKCHAIN?
Invented by Satoshi Nakamoto in 2008 for use in the cryptocurrency bitcoin
As bitcoin's public transaction ledger".
Blockchain Technology – The Wave of the Future
STATE OF CRYPTOCURRENCY
Types: 1564
Market Cap: $300 billion
(3/17/18 18:25PST, coinmarketcap.com)
Blockchain Technology – The Wave of the Future
$19,783.21 on 12/17/17
$7,752.84 on 3/17/18
Blockchain Technology – The Wave of the Future
4 KEY CONCEPTS OF BLOCKCHAIN
Blockchain Technology – 4 Key Concepts of Blockchain
1. Distributed shared ledgers
Group of replicated logs/databases (nodes)
Transactions distributed in blocks All nodes hold all transactions Parties identified with public key
(=anonymized) Accessibility of transactions depending
on blockchain implementation Resilient for failure of one or more
nodes Group of nodes operate tamper proof
Blockchain Technology – 4 Key Concepts of Blockchain
Source: BITNODES
Blockchain Technology – 4 Key Concepts of Blockchain
2. Cryptography-Hashing
Creation of a bit string representing integrity of content.
Changing one character in the original string results in complete different hash. This is the so-called avalanche effect.
Blockchain Technology – 4 Key Concepts of Blockchain
2. Cryptography–Public & Private Keys
Public key: a public identifier that can be freely shared with others; this is your identity on the blockchain
Private key: a key that must never be shared with anyone
Authentication, Encryption, Digital signature
Blockchain Technology – 4 Key Concepts of Blockchain
3. Consensus
Majority of nodes agree on validity of transactions
Validation on double-spending without the need of a trusted authority or central server
Blockchain Technology – 4 Key Concepts of Blockchain
4. Smart Contracts
Digitally facilitate, verify, or enforce the negotiation or performance of a contract
Transactions are trackable and irreversible
No 3rd parties involved
Blockchain Technology – 4 Key Concepts of Blockchain
Sample case of blockchain for smart contracts(Source: IBM.com)
Blockchain Technology – The Wave of the Future
VALUE OF BLOCKCHAIN TECHNOLOGY
Blockchain Technology – The Wave of the Future
APPLICATION POTENTIALS OF BLOCKCHAIN
Blockchain Technology – The Wave of the Future
APPLICATION POTENTIALS OF BLOCKCHAIN
Blockchain Technology – The Wave of the Future
APPLICATION POTENTIALS OF BLOCKCHAIN
Blockchain Technology – The Wave of the Future
GAME-CHANGER IN AUDITING?
Benefits: Integrity of blockchain stored data: a source of verification
Automation of transaction verification process can drive cost efficiencies
Blockchain technology can be used to test the whole population of transactions, which can drastically improve the level of assurance
Fully-automated audit: assessment of financial statement assertions such as existence, occurrence, accuracy and completeness of information
Challenges: A different professional audit mind-set and additional expertise will be
required
$32 million Ethereum hacking - assessment of operating effectiveness of the internal IT controls
Risks through implementation of IT controls
Blockchain Technology – The Wave of the Future
Thank You!
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