[Madmagz] The Blockchain
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Transcript of [Madmagz] The Blockchain
Motivation
On the 17th of August a Tesla 3 would have cost you 7.9 Bitcoin
In 2011 it would have cost you 17,500,000 Bitcoin
Motivation
Figure 1: Bitcoin/USD exchange rate,10 year period (source: xe.com (date of access: 14/08/2017))
START
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
Motivation
Figure 1: Bitcoin/USD exchange rate,10 year period (source: xe.com (date of access: 14/08/2017))
START
Motivation
Figure 1: Bitcoin/USD exchange rate, 1 week period (source: poloniex.com (date of access: 14/08/2017))
Motivation
● http://www.blockchainfederation.org/ico/200-million-60-minutes-filecoin-ico-rockets-record-amid-tech-issues/
The Concept
Block is broadcast to
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
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
The concept● Distributed Database
● Ledger
● Cryptography
● Consensus
● Token and Cryptocurrency
● Time Stamp
● DAO (Decentralised Autonomous Organisation)
PublicPermissioned
Private
The maths● Proof of work (e.g. Hashcash for bitcoin)
● Merkle Tree
● Chain
● Hash
● Nonce
● Nodes
● Miners
● Network
Block
Chain
Network
So what makes Blockchain 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)
DAO
● Decentralized Autonomous Organisation
● 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
Finance● Significantly increases speed 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-international-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)
IoT “On the blockchain, 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
Smart Contracts
● Healthcare
● Music
● Intellectual Property
● Passports
● Birth, wedding and death certificates
● Personal ID
● Public Community (councils)
Ethical and regulatory issues
● 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
Technical issues
● Required computer capacity - very powerful Miners
● Multiple data centers?
● Forks
● Number of users
● Installed protocol releases
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?
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
Ethereum
● First described in 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)
Ripple
● For moving and 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
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
Augur
● https://augur.net/
● Between financial and non-financial
● Users log in predictions on a blockchain
● Reward according to precision of prediction
● Big volume → average prediction is correct
NEO
● https://futurism.com/a-new-blockchain-platform-is-taking-on-ethereum/
Filament
● Securing IoT data
● Hardware : Low power (4µA at sleep) nodes
● Software :
Source : https://filament.com/assets/downloads/Filament%20Security.pdf (date of access 04/08/17)
Colu App
● Creating very 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
LaZooz● Ride sharing app 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
Blockstack● https://blockstack.org/
● “A new 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
Blockverify● http://www.blockverify.io/
● Anti-Counterfeit solution
● Gives a tag to each authentified product (whether authentic or counterfeit)
● Blockchain traces the product
○ Pharmaceuticals
○ Luxury items
○ Diamonds
○ Electronics
Storj● https://storj.io/
● “Blockchain based end-to-end encrypted, ditributed object storage, where only you have access to your data”
●
HyperLedger● A Linux Foundation initiative
●
Source: https://www.hyperledger.org/about
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
How about groups like 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/
Microsoft Azure - Coco● Latest Azure’s blockchain-related announcement
● Coco platform
●
Truster IoT Alliance
● https://www.trustediot.org
/
● New open source software
foundation
So how are nation states responding ?
● https://www.wired.com/2015/12/you-too-can-get-married-on-the-blockchain/
● https://www.coindesk.com/russias-ministry-health-launching-blockchain-pilot/
● https://www.forbes.com/sites/elaineramirez/2017/08/09/dayli-icon-blockchain-south-korea/#48bd340125a7
● https://futurism.com/congress-is-reportedly-drafting-a-bill-that-will-mainstream-digital-currency/
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
The DAO: rise and 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
Merkle tree
By Azaghal - Own work, CC0, https://commons.wikimedia.org/w/index.php?curid=18157888
Back to the maths
Useful links - Top 5
● http://www.goldmansachs.com/our-thinking/pages/blockchain/
● https://medium.com/@DebrajG/how-the-byzantine-general-sacked-the-castle-a-look-into-blockchain-370fe637502c
● https://blog.cex.io/cryptonews/top-50-blockchain-startups-2017-16158
● https://www.ethereum.org
● https://www.coindesk.com/information/what-is-ethereum/
● For chart lovers https://blockchain.info/fr/charts