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v1.0
March 2, 2018
TRUST ABOVE ALL ELSE, ON A GLOBAL SCALE
DISTRIBUTED LEDGER
TECHNOLOGY PRIMER
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DISTRIBUTED LEDGER TECHNOLOGY, WHY THE BIG DEAL?
TRUSTED TRANSACTIONS
CAN HAPPEN GLOBALLY,
INSTANTANEOUSLY
• Commerce and the global
payments systems are just
beginning to transform with VISA
and global banks leading with
live DLT systems for connecting
businesses and banking,
globally, and transferring value
instantaneously.
• Western Union is moving towards
an integration with Coinbase
(the $1B Revenue and #1 leading
online US-based cryptocurrency
wallet and exchange) and using
a Ripple (cryptocurrency)
transaction system for global
payments and transfers.
1 BILLION HUMANS MAY SOON
BE EMERGING FROM POVERTY
AND OPPRESSION AND JOINING
THE GLOBAL GRID
• The ID2020 Alliance, with key participants
including the United Nations, Microsoft,
and Hyperledger endeavors to provide
DLT-based identity services, the first step
for these 1 Billion people to connect,
receive government services, and transfer
value with the global community.
GLOBALLY DISRUPTIVE TO NEARLY
EVERY MARKET, GOVERNMENT,
BUSINESS, AND INDIVIDUAL
• The current cryptocurrency hype
aside, there is massive potential to
transform many organizations and
how they serve individuals such as
Healthcare, Insurance, Energy,
Manufacturing and Government.
• Modernizing Cloud Automation,
CyberDefense, ERP/Supply Chain,
Provenance, IT Management...
• Both the US Central Bank and
Canadian Central Bank have released
White Papers about their respective
government-backed cryptocurrency.
• Get ready for the “Uber” of many
major industries and markets and
on a global scale.
GLOBAL COMMUNITIES ARE
FORMING NOW
• Government, NGOs, Universities,
Market Consortia, Social Philanthropy,
Nation-states, and other mission-focused
teams are launching and forming
DLT-based social, economic, gaming,
and other like minded focuses.
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BLOCKCHAIN IS A GLOBAL MOVEMENT
The U.S. has usually been at the forefront of technological development. In the case of driving vision for
regulatory, taxation, cyber defense, and overall economic and social ecosystems (the U.S. is well behind).
• Dubai is aiming to become the blockchain capital of the world. 20 blockchain-based initiatives are planned for 2018, to improve government
services in road and transport, education, energy and healthcare.
• Switzerland provides the most attractive political and regulatory support for blockchain-based start-ups. Zug, a lakeside town in Switzerland, has come
to be known as the next Silicon Valley or “Crypto Valley”, and is attracting significant foreign investments in the blockchain space.
• United KingdomAs early as January 2016, the UK government had released plans to use blockchain to “reduce fraud, corruption, error and the cost
of paper-intensive processes.” The UK government’s BaaS (blockchain-as-a-service) is being used to track welfare paychecks and disburse student loan grants.
• Australia In Feb 2018 PayID went live, a country-wide banking system based on the New Payment Platform (NPP) and blockchain which allows mobile
numbers or email addresses to be also be used as a way to identify yourself, both to pay and be paid by others instantaneously and lower cost than traditional
bank transfers.
• Singapore The Monetary Authority of Singapore has announced plans to tokenize the country’s currency on the Ethereum Network. The government
has also allocating significant funds for blockchain R&D focused on integrating blockchain into government and financial services.
• Venezuela Launched a pre-sale of its commodity-backed "petro" cryptocurrency on February 20, 2018. The first ever cryptocurrency issued by a
country. According to the Venezuela government, the petro token will be backed by its oil, gas, gold and diamond reserves.
• Estonia which has an e-residency program that allows people from other countries to become digital citizens and register their business here, is now
working on a national cryptocurrency dubbed ESTcoin. There are talks of the first-ever government-backed ICO for the token sale of ESTcoin.
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CRYPTOECONOMICS VS INTERNET COMMERCE LIFECYCLES
CATEGORY INTERNET COMMERCE LIFECYCLE CRYTPOECONOMICS/DLT LIFECYCLE (WEB 3.0)
Currency • USD (1862) • N/A
Fiat Currency
• USD (1971) Gold standard removed.
• U.S. “FedCoin” White Paper (2016)
• China, Russia, Japan, Israel all looking closely at developing
state-based cryptocurrency (2017+)
• Bitcoin (2009)
• Ripple (2012)
• Ethereum (2015)
• Tether (2017) $1 ~ 1 Tether
Protocol • HTTP/TCP (1989) • Blockchain Cryptoeconomics (2009)
Technology (enterprise, B2B,
government)
• ARPANET (1983)
• World-Wide Web (1990)
• R3 (2014)
• Hyperledger (2015)
Tools and Programming Languages
• Python (1989)
• HTTPS (1994)
• JAVA (1995)
• JavaScipt (1995)
• C++ (1998)
• Go (2009)
• Solidity (2015) (Ethereum)
• Hyperledger Composer
• Hyperledger Explorer
• Hyperledger Cello
User Interface/Browser
• Mosaic Browser (1993)
• Netscape Browser (1994)
• MS Internet Explorer (1995). Now MS Edge.
• Firefox (2002)
• Safari (2003)
• Blockchain.info (2011)
• Block Explorer (2015)
• Blockstack Browser (2015)
• Maxthon Browser with Blockchain (2017). China
Applications Platforms
• Amazon (1994). Hit $1B in its first year.
• Google (1998)
• Paypal (1998)
• Facebook (2004)
• Coinbase (2012). $1B Revenue in 2017
• Ethereum (2015). Smart-Contracts
• Steemit (2016). Social Media
• IOTA (2017). IoT
Hybrid Distributed Ecosystems
• Google, Amazon, Apple, and Facebook are already hybrid
distributed
ecosystems, just without leveraging blockchain….yet.
• The next P2P ”Ubers” and P2P industry disrupters
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THE RISING INTEREST IN DISTRIBUTED TECHNOLOGIES
• Historically, the trend is one of continual
fluctuation between the centralization
and subsequent decentralization of
computing power, storage,
infrastructure, protocols, and code.
• Over time, Internet and cloud
computing architectures enabled
global access from a variety of
computing devices.
• Even though this 'cloud architecture’
is decentralized in terms of hardware,
it has given rise to application-level
centralization (e.g. Facebook, Twitter,
Google, etc).
• The current trend is transitioning from
centralized computing, storage, and
processing to decentralized
architectures and systems.
• Distributed Computing, Edge/Fog
Computing, and Distributed Ledger
Technology are all part of this trend,
with DLT going the farthest through
software-defined “smart contracts” to
delegate and govern explicit control of
digital assets to end-users and reduce
or remove the need to trust any
third-party servers and infrastructure.
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FACTORS FOR EVALUATING DLT USE
• How many participants are in your system?
• What is the geographical distribution of the participants?
• What sort of performance requirements do you have?
• What are the rules, risks, and responsibilities of each party in your Blockchain system?
• Need for a shared common database
• The parties involved have conflicting
incentives, or do not have trust
among participants
• Multiple parties involved or writers
to a database
• Trusted third parties involved in the process
that facilitate interactions between multiple
parties who must trust the third party
• i.e. escrow services, data feed providers,
licensing authorities, or a notary public
• Cryptography is required. Cryptography
facilitates data confidentiality, data integrity,
authentication, and non-repudiation
• Data is dynamic and being entered into
many different databases along the lifecycle
of the process
• Data needs to be consistent across all
entities, and/or digitization of such a
process is desired
• External services not used to gather or
store data
• Uniform rules infrequently changing
that govern participants
• Decision making is transparent,
rather than confidential
• Requires an objective, immutable
history or log of facts for parties’
reference
• Transaction frequency not exceeding
10,000 transactions per second
Blockchain is best suited where one or more of the following conditions apply:
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GOVERNMENT AND COMMERCIAL ENTERPRISE DLT
USE CASE CATEGORIES
GOVERNMENT SERVICES
• Government Credentials (Visa,
Passports, SSN, Birth/Death/
Marriage Certificates
• Real Estate/Property Rights
• Census
• Patents, Trademarks, Copyrights,
Royalties
• International Passenger Processing
• Provenance (Anti-forgery and
counterfeiting)
• Federal Assistance and Foreign Aid
• New Business Models
CRYPTOECONOMIC
SERVICES
• Cryptocurrency Forensics
• Cryptocurrency Securities Fraud
• Cryptocurrency Asset Taxation
• State-based Cryptocurrencies
• New Business Models
GOVERNMENT/ENTERPRISE
SERVICES
• Financial Transactions
• Procurement
• IT Asset and Supply Chain
• Insurance
• Healthcare/Medical Records
• Provenance
• Identity
• New Business Models
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GOVERNMENT BLOCKCHAIN INITIATIVES AND USE CASES
GOVERNMENT BLOCKCHAIN
APPLICATION USE CASES
BUSINESS WORKFLOW
• Property Management
• MIPR
• Contracting Support
• Human Resource Records Management
• ERP/Supply Chain Risk Management
SECURITY
• Identity
• Access Control
• Secure Messaging
• Advanced Persistent Threats
• PKI Time-stamping and Code Signing Support
• Cross Domain Solutions
• Auditing System Change Logs for Security
HYBRID CLOUD/COMPUTE/STORAGE
• Cloud Automation
• Data Storage
Areas of focus:
GOVERNMENT
APPLICATIONS
The Congressional Blockchain Caucus is first and
foremost interested in how blockchain technology can
improve government services.
DATA OWNERSHIP
Identity and personal data are nowadays synonymous
with fraud and hacking. Blockchain technology poses a
solution to identity management, giving an individual
ownership of their identity.
HEALTHCARE
From smart contracts all the way to patient records,
blockchain technology offers increased security
and ease of use.
Established February 9, 2018
Congressional
Blockchain Caucus
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CRYPTOECONOMIC ASSETS: TOP 10 BY MARKET CAP
Source: www.cryptocompare.com/coins/list/USD/1
US TOP 10
CRYPTOCURRENCIES
• Bitcoin was the first
cryptocurrency first mined in
2008. Total market cap was $0.
• 10 years later the top 10
Cryptocurrencies in the US
account for nearly $400B in
market capitalization.
• Each cryptocurrency has a
defined mission, a different
approach, all inspired by Bitcoin.
• IOTA, one of the leading
cryptocurrencies addressing
the IoT market with its new
“Tangle” technology that
transfers value without fees
(no miners).
US TOP 10 (OPEN / PERMISSIONLESS) CRYPTOCURRENCIES (FEB 2018)
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CRYPTOECONOMIC ASSETS: BITCOIN DEMOGRAPHICS
Source: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
BITCOIN WALLET DEMOGRAPHICS (FEB 2018)
TOP RETAILERS TO SPEND BITCOIN
HOW MANY BITCOINS ARE GONE FOREVER?
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DISTRIBUTED LEDGER VERNACULAR
A DISTRIBUTED LEDGER is a type of data structure
which resides across multiple computer devices,
generally spread across locations or regions.
DISTRIBUTED LEDGER TECHNOLOGY (DLT) includes
blockchain technologies and smart contracts. While
distributed ledgers existed prior to Bitcoin, the Bitcoin
blockchain marks the convergence of a host of technologies,
including timestamping of transactions, Peer-to-Peer
(P2P) networks, cryptography, and shared computational
power, along with a new consensus algorithm. A DLT
generally consists of three basic components:
• A data model that captures the current state of the ledger
• A language of transactions that changes the ledger state
• A protocol used to build consensus among participants
around which transactions will be accepted, and in what
order, by the ledger.
BLOCKCHAIN (DATA MODEL)
A blockchain is a peer-to-peer
distributed ledger forged by consensus,
combined with a system for "smart
contracts" and other assistive
technologies. (hyperledger.org)
SMART CONTRACT (LANGUAGES) are
simply computer programs that execute
predefined actions when certain
conditions within the system are met.
CONSENSUS (PROTOCOL) refers to a
system of ensuring that parties agree
to a certain state of the system as
the true state.
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Microsoft Project Bletchley and Coco
Framework - Microsoft Marketplace
Distributed Apps (DAPPS), integrated
with MS SharePoint, MS O365, Power BI
Dashboards, and running on MS
Blockchain as a Service (Hyperledger,
Chain, Ethereum)
DLT MISSION USE CASE TAXONOMY
PERMISSIONED PERMISSIONLESS
CLOSED BLOCKCHAIN
A private network that maintains a shared record of transactions. The
network is accessible only to those who have permission
and transactions can be edited by administrators.
PERMISSIONED
• Hyperledger Fabric
• Hyperledger Sawtooth
• Hyperledger Indy
• Hyperledger Iroha
• Hyperledger Burrow
• Enterprise Ethereum
• Chain
• EOS (Private Fork)
• Ethereum
• Ripple
• Bitcoin
• Most Cryptocurrencies
• Proof-of-Stake (PoS)
Chains
• Delegated PoS Chains
(DPoS)
• Ethereum (after Caspar)
• Corda
• Quorum
• R3
• EWF
• B3i
HYBRID BLOCKCHAIN
Consisting of Public and Private State of
network where every transaction is private
but still verifiable and immutable it restricts
the rights to view, modify append and
approve transactions to selective members
Best for DLT mission use cases for government agencies and
commercial enterprise Proof-of-Concept, Prototypes around
financial transactions, smart-contract, and Distributed
Applications (DAPPS).
Best for DLT mission use cases for the Defense & Intelligence
sector, some civilian agency, and enterprise Proof-of-Concept,
Prototype smart-contract involving Insider Threat, Cloud
Automation, Supply-Chain, Provenance.
OPEN BLOCKCHAIN 
A public network that maintains an immutable record of transactions.
Anyone can publish a transaction and participate
in the network by adhering to a set of published rules.
PRIVATE
CONSORTIUM
FEDERATED
PUBLIC
Best for DLT mission use case, Proof-Of-
Concepts and semi-distributed
applications running partially within one
or more commercial cloud service
providers, on-premise, and/or any
combination of permissioned or
Permissionless use cases.
PERMISSIONED &
PERMISSIONLESS
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DLT OPEN/CLOSED SYSTEM COMPARISON
ATTRIBUTE CLOSED/PRIVATE/PERMISSIONED OPEN/PUBLIC/PERMISSIONLESS
Ecosystem Governance
• Government agency or departments delegating and verifying, authorized humans and
machine (nodes).
• Commercial Enterprise delegating and verifying authorized humans and machines (nodes).
• Anyone
Read/Write Access • Customizable: Anyone, only designated nodes, and/or subsets of humans, machines, database • Anyone
Compute/Storage • On-premise agency or enterprise servers or distributed nodes • Public, Globally distributed
Security (Consensus) • Apache Kafka, Proof-of-Elapsed Time (PoET), YAC, Tendermint, RBFT
• Proof-of-Work (PoW), Proof-of-Stake
(PoS)
Identity • Pre-approved known and trusted participants • Anonymous/Pseudonymous participants
Pros
• Clearly defined governance and oversight
• Higher operational security, verification, validation
• More cost-effective
• Resilient and adaptable to insider/external cyber attacks
• Higher volume, faster transaction speed, more scalable
• Higher speed of innovation
• No central control
• Can’t be shut down
• Transparent
• Creates open and dynamic marketplaces
Cons
• Leading solutions are at “Version 1” software release level of maturity (but highly suitable for
proof-of-concept/prototype)
• Several purpose-defined frameworks not yet functionally integrated.
• No blockchain interoperability standards yet (NIST is taking the lead)
• Hard to scale
• Hard to maintain
• PoW Consensus is energy intensive
• Transaction costs
• Subject to “51% attacks”
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THE CRYPTOECONOMICS OF
PERMISSIONLESS BLOCKCHAINS
• Cryptoeconomics explores the intersection of cryptography
and economic incentives.
• Cryptography is used for ensuring network security at various
levels and functions.
• Economic incentives are built-in to the participating nodes in the
network to ensure that, at any given point, the majority of players
in the network operate in a desirable way.
Permissionless blockchains are public and open for anyone to
join (including malicious actors). The key lies in incentivizing
good behavior in a critical majority of the network, such that:
• The malicious actors cannot take over the network through
an escalated attack.
• The malicious actors cannot collude to undertake
an organized majority attack on the network.
• The payoffs of securing the network are consistently
higher than the cost of attacking the network.
• The cost of attacking the network is prohibitively high.
"Cryptoeconomics is about building systems that have certain desired
properties using cryptography to prove properties about messages that
happened in the past while using economic incentives defined inside the
system to encourage desired properties to hold into the future.“
-- Vitalik Buterin Ethereum Founder
End-User
Charlie
End-User
Samantha
Smart Contract
Create
Transactions
Transactions
Included in
a Block
ü
ü
ü
ü
Blockchain/Ledger
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Ledger
Ledger
Ledger
LedgerLedger
Ledger
Validating
Entities
Peer
Peer
PeerPeer
Peer
Peer
THE BLOCKCHAIN LEDGER
The Distributed Ledger is an authoritative book of transaction records
with unique properties
• Many copies are kept synchronized
• Multiple parties can create
individual records
• Software-defined cryptographic
consensus algorithms are used to
determine the validity and order
of written transaction records
• Each record is linked to the prior
one, ensuring that written records
cannot be modified or deleted without
alerting the readers of the book
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HYPERLEDGER-FABRIC REFERENCE MODEL
• Permissioned system: strong identity management
• Distinct roles of users,
and validators
• Developers deploy new pieces
of code (chaincodes)
that End-Users invoke
through transactions
• Validators evaluate the
effect of a transaction and
reach consensus over the
new version of the ledger
• Ledger = total order of
transactions + hash (global state)
• Pluggable consensus protocol, currently PBFT & Sieve
Ledger
Ledger
Ledger
LedgerLedger
Ledger
Validating
Entities
Transaction
(defining contracts)
Transaction
(invoking contracts)
Fabric
Client
Fabric
Client
End-User
Samantha
Application
Charlie
Permission Issuer
Peer
Peer
PeerPeer
Peer
Peer
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Ledger
Ledger
Ledger
LedgerLedger
Ledger
Validating
Entities
Peer
Peer
PeerPeer
Peer
Peer
Membership
Auditors
Client
End-User
Membership
Management
User
Registration
Anonymous Credentials
Nominal Credential
Nominal
Credential
Peer
Registration
TRUST ABOVE ALL ELSE: MEMBERSHIP
• End-Users prove identity and issue two types of credentials (Transaction/Anonymous
and Enrollment/Nominal certificates)
• Peers only issue Enrollment certificates
• Nominal credentials contain encryption and signing keys
• Auditors can audit certificates and ownership
The ultimate measure of Hyperledger projects
and all blockchain technology is whether the
architecture and implementation can be trusted
to validate and secure transactions.
With Hyperledger Fabric, the trust starts
with selecting and identifying users
(who can also be thought of as members
in a permissioned system).
In this case, users can prove their identity
and issue two types of credentials through
either transaction certificates or enrollment
certificates, with the latter issued only by
peers within this sort of permissioned system.
Nominal credentials contain encryption and
signing keys, and the designated auditors can
audit certificates and ownership.
The underlying trust in this system involves peer
institutions each wanting the same clean
system that disintermediates those pesky third
parties while maintaining the inviolability of
transactions and the system in general.
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Ledger
Ledger
Ledger
LedgerLedger
Ledger
Validating
Entities
Peer
Peer
PeerPeer
Peer
Peer
Contract & System
Auditors
Client
Client
End-User
Samantha
End-User
Charlie
Audit of
Samantha’s
contracts
Nominal visible
only to validating
entities
Transactions
Anonymous visible
only to validating
entities and Samantha
TRUST ABOVE ALL ELSE: CONFIDENTIALITY AND
AUDITABILITY
Auditing through proper key distribution at:
• System level, i.e., all system transactions
• User level, i.e., a user’s transactions
• Contract level, i.e., contracts messages
Government agencies and businesses
assign information classification levels
and confidentiality, due to
competitiveness, protection laws, and
regulation on confidentiality of
personal data dictate the need for
privacy of certain data elements.
Hyperledger achieves this through
data partitioning on the Blockchain.
These Hyperledger Private Channels
allow for data to go to only the
parties that need to know, based
on their security attributes.
Contract system auditors, for examplea
government agency a Chief Information
Security Officer (CISO) can monitor and
be alerted to potential Insider Threat
tampering.
Contracts can be
encrypted such that
decryption is possible
only by the validating
entities and potentially
authorized users.
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CYBER THEATER INVOLVES ADVANCED PERSISTENT THREAT
1. Manage Smart Contract
Diagnostic
• The scope of the current release
2. Platform Connection
Diagnostic
• Assesses overall architecture
including multi-signature use,
key management method,
and proprietary API
3. Distributed Apps Diagnostic
• Evaluates security on an individual unit
bases if DApps/proprietary apps are developed
4. Platform Setting Diagnostic
• Is other companies’ secret information not accessible?
• Can other companies’ information be updated?
• Has a default username/password not been set? etc.
Web
Application
Smart
Contracts
ü
ü
ü
ü
Access
Company
A
2
Generate/
Implement/
Reference
Company
B
Company
C
Company
D
ü
ü
ü
ü
User inside Company D
with malicious intent
1
4
ü
ü
ü
ü
Blockchain
Attack
Attack
Attack
Attack
3
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Ledger
BLOCKCHAIN TRANSACTION
TX Number From To Data Signature
101 Party A Party B XXXXX Party A Sign
102 Party A Party C YYYYYY Party A Sign
103 Party C Party B ZZZZZZ Party C Sign
104 Party B Party D AAAAA Party B Sign
105 Party A Party C MMMM Party A Sign
106 Party C Party B FFFFFF Party C Sign
107 Party B Party D PPPPP Party B Sign
108 Party A Party C EEEEEE Party A Sign
109 Party C Party B QQQQQ Party C Sign
DISTRIBUTED LEDGER PROTOCOL
B1
B2
B3
Ledger
Ledger
LedgerLedger
Ledger
Peer
PeerPeer
Peer
Peer
CONSORTIUM PEER-TO-PEER NETWORK3 STEPS TO A BLOCKCHAIN TRANSACTION
Smart
Contract
Execute
Code
Update &
Retrieve
Data
Storage
ü
ü
ü
ü
1. Create Transaction
ü ü
ü ü
2. Verify Transaction 3. Enforce Transaction
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AN EXAMPLE BUSINESS NETWORK DEFINITION
The Hyperledger Fabric Composer tool is used to simplify the process of defining a business network,
creating and tracking assets, and performing transactions.
A business network
modeling participants,
assets, registries,
and transactions.
Transaction processors
implement business
logic on these elements.
Access Control Lists
(ACL) define privacy
and sharing settings.
Source: IBM Corporation
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DLT MARKET EVOLUTIONARY TRENDS
GLOBAL USE CASES
• Digital Identity (ID2020)
• P2P Domain Name Service (Namecoin)
• P2P Everything Platforms
STANDARDS FOR INTEROPERABILITY
• Global WWW (W3C)
• US Data Standards (NIST). No current standards exist.
• Hybrid Permissioned/Permissionless DLT
ADVANCED SYSTEMS AND TOOLSETS
• Multichain Systems
• Blockchain as a Service (BaaS)
• Off-Chain Middleware
• Sidechains
• Oracles
• Distributed Autonomous Organization (DAO)
BLOCKCHAIN INTEGRATION WITH OTHER TECH
• AI/Machine learning (DeepBrainChain)
• IoT (IOTA, Microsoft)
• ERP Systems (SAP, Oracle, Microsoft)
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NOTEWORTHY
MISSION USE CASE
Digital identity for 1 Billion people not currently
connected to the global digital grid for:
• Human Rights
• Basic Services
• Economic Opportunity
• Gender Equality
• Global Development
MULTI-NATIONAL, MULTI-ORGANIZATIONAL,
INDIVIDUAL COLLABORATION
• United Nations
• Hyperledger
• Microsoft
• Individual Contributors
FEATURED USE CASE: ID2020 ALLIANCE
MISSION USE CASE
B2B Connect is a blockchain-based business-to-
business payments service serving U.S.-based
Commerce Bank, South Korea's Shinhan Bank,
the Union Bank of Philippines and the United
Overseas Bank, based in Singapore. B2B Connect
eases cross-border payments by facilitating direct
payments between institutions, cutting out the
middleman the industry currently relies on.
The platform is based on blockchain startup
Chain - is also designed to ensure secure, yet
transparent payments between enterprises.
FEATURED USE CASE: VISA B2B CONNECT
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LEARN FROM THE DLT INFLUENCERS BY FOLLOWING THEM
ON SOCIAL MEDIA
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CRYPTOECOSYSTEM LAB: LEARN BY PARTICIPATING
DECIDE ON A WALLET STRATEGY PORTFOLIO DESIGN & STRATEGY LEAP, TRACK, MANAGE
Paper
Coindesk Paper - Wallet Tutorial
Online (US-based)
https://www.coinbase.com
https://poloniex.com
https://www.kraken.com/
USB
Trezor Grey bitcoin hardware wallet
compatible with bitcoin, dash, zcash,
ethereum
Research and Daily Follow
• https://www.coindesk.com/
• https://www.cryptocompare.com/
Autonomous Portfolio
• https://prism.exchange/ (Live Beta)
Self-Managed Portfolio
• https://cointracking.info/
• https://www.blockfolio.com/
• https://altpocket.io/
Leap
1) Pick the right moment and buy your
first (partial) bitcoin, Ethereum,
and/or Litecoin.
2) Open multiple exchanges and move
cryptocurrencies around to
experience the transaction
Track and Manage
• Monitor on Cryptocompare and
Coindesk the live evolution of DLT
and further research mission use
cases of interest to you.
• Track your assets in Cointracking.info
or similar tool.
• Manage and reshuffle your portfolio
as your risk profile and investment
strategy evolve.
technicacorp.com
26 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary.
LOOKING TO TAKE YOUR DLT TO THE NEXT LEVEL?
DLT LEARNING - START HERE
ORGANIZATIONS AND WHITE PAPERS THAT INSPIRE
GLOBAL DLT NEWSBOOKS THAT INSPIRE
Quality education for everyone, everywhere.
At edX, we take our mission of increasing
global access to quality education seriously.
We connect learners to the best universities
and institutions from around the world.
www.edx.org
Learning partner for your team
or organization.
Don’t just learn it. Master IT. The
most effective learning system.
World’s highest completion rate.
www.edureka.co
A purely peer-to-peer version of
electronic cash would allow online
payments to be sent directly from one
party to another without going through
a financial institution.
www.bitcoin.org
Decentralized platform that runs
smart contracts; applications that run
exactly as programmed without any
possibility of downtime, censorship,
fraud or third party interference.
www.ethereum.org
Platform for distributed ledger solutions,
underpinned by a modular architecture
delivering high degrees of confidentiality,
resiliency, flexibility, and scalability. Designed
to support pluggable implementations of
different components, and accommodate the
complexity and intricacies that exist across the
economic ecosystem.
www.hyperledger.org
CoinDesk is the leading digital media,
events and information services company
for the crypto asset and blockchain
technology community. Its mandate is to
inform, educate and connect the global
community as the authoritative daily
news provider dedicated to chronicling
the space.
www.coindesk.com
technicacorp.com
27 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary.
CONCLUSIONS & LOOKING FORWARD
CLOSED BLOCKCHAIN ECOSYSTEMSGENERAL
• Trust above all else
• DLT is a revolution, we are
in a phase similar to the
early days of the internet,
with much hype and
promise and many
differences.
• There is much hype (largely
on cryptocurrency side) and
perhaps that diminishes the
strong business workflow
mission and use cases.
• The US is well behind other
nations in understanding,
posing a vision, regulatory,
taxation, securities
security's law, law
enforcement, and
distributed applications
• Trust above all else
• Enterprise/Govt DLT solutions
have the ability to streamline
communication, reduce costs,
increase transparency, and
increase trusted transactions
between government, enterprise,
and individuals.
• Systems Integrators Help
Government and Enterprise
integrate DLT into existing
infrastructure and workflows.
Major Permissioned DLT
Organizations
• Hyperledger
• Corda
• Qurom
Enterprise/Government Market Categories
• Financial Transactions
• Procurement
• IT Asset and Supply Chain
• Insurance
• Healthcare/Medical Records
• Provenance
• New Business Models
Government Services
• Government Credentials (DMV, Visa, Passports,
SSN, Birth, Death, Marriage Certificates)
• Real Estate/Property Rights
• Census
• Patents, Trademarks, Copyrights, Royalties
• International Passenger Processing
• Provenance (Anti-forgery and counterfeiting)
• Federal Assistance and Foreign Aid
• New Business Models
NUMEROUS GOVERNMENT/ENTERPRISE MISSION
USE CASES & SCALABLE TO A GLOBAL IMPACT
technicacorp.com
28 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary.
US GOVERNMENT RESEARCH & DEVELOPMENT CONTRACTS
DLT FOR GOVERNMENT THROUGH OTHER TRANSACTION AUTHORITY (OTA) AGREEMENTS
C5 Consortium
Features: Cyber Challenge, Army, DoD
Established: 2011
Website: C5Technologies.org
Mission Areas:
• Offensive/Defensive Cyber Operations
• DoD Information Network (DoDIN) Operations
• Systems Security
• Control Systems & Automation Systems
• Software and Hardware Performance Analysis
• Software and Hardware
Sustainment/Supportability
• Emerging Software and Hardware Technologies
Contacts
SOSSEC
Consortium
Features: DoD, AFRL, DHS, NSA projects
Established: 2004
Website: SOSSECConsortium.com
Mission Areas:
• Critical Infrastructure and Force Protection
Technologies
• Command and Control Technology Development
• Protecting Analyzing and Sharing Information
• Platform and Integration Testing
• Sensor Development and Platform Integration
Government Sponsor: The U.S. Army Armament
Research, Development and Engineering
Center (ARDEC) at Picatinny Arsenal, NJ is
the sponsoring government organization in
the DoD for both the C5 Consortium
Government Sponsor: The U.S. Air Force Research
Laboratory at Wright-Patterson Air Force
Base, Ohio is the sponsoring government
organization in the DoD for the SOSSEC
Consortium
RAPID
ACQUISITION:
90-DAY
PROCUREMENT
LIFECYCLE
FOR PROTOTYPE
AND DEVOPS
SYSTEMS
CUSTOMIZED
TO GOVERNMENT
SPECIFICATIONS
technicacorp.com
29 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary.
LETS CONTINUE THE DISCUSSION
Jason Devine
DLT for DoD
jdevine@technicacorp.com
Bill Groah
DLT Council
bgroah@technicacorp.com
Jeffrey Hallett
DLT for Enterprise
jhallett@technicacorp.com
Rhonda Eldridge
DLT R&D, Prototypes
reldridge@technicacorp.com
Doug Sickler
DLT for Government
dsickler@technicacorp.com
To continue the discussion around
whether your mission and use case idea
is optimum for DLT and for general
inquiries, reach out to us at:
DLT@technicacorp.com

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Technica Distributed Ledger Primer

  • 1. technicacorp.com ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. v1.0 March 2, 2018 TRUST ABOVE ALL ELSE, ON A GLOBAL SCALE DISTRIBUTED LEDGER TECHNOLOGY PRIMER
  • 2. technicacorp.com 2 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. DISTRIBUTED LEDGER TECHNOLOGY, WHY THE BIG DEAL? TRUSTED TRANSACTIONS CAN HAPPEN GLOBALLY, INSTANTANEOUSLY • Commerce and the global payments systems are just beginning to transform with VISA and global banks leading with live DLT systems for connecting businesses and banking, globally, and transferring value instantaneously. • Western Union is moving towards an integration with Coinbase (the $1B Revenue and #1 leading online US-based cryptocurrency wallet and exchange) and using a Ripple (cryptocurrency) transaction system for global payments and transfers. 1 BILLION HUMANS MAY SOON BE EMERGING FROM POVERTY AND OPPRESSION AND JOINING THE GLOBAL GRID • The ID2020 Alliance, with key participants including the United Nations, Microsoft, and Hyperledger endeavors to provide DLT-based identity services, the first step for these 1 Billion people to connect, receive government services, and transfer value with the global community. GLOBALLY DISRUPTIVE TO NEARLY EVERY MARKET, GOVERNMENT, BUSINESS, AND INDIVIDUAL • The current cryptocurrency hype aside, there is massive potential to transform many organizations and how they serve individuals such as Healthcare, Insurance, Energy, Manufacturing and Government. • Modernizing Cloud Automation, CyberDefense, ERP/Supply Chain, Provenance, IT Management... • Both the US Central Bank and Canadian Central Bank have released White Papers about their respective government-backed cryptocurrency. • Get ready for the “Uber” of many major industries and markets and on a global scale. GLOBAL COMMUNITIES ARE FORMING NOW • Government, NGOs, Universities, Market Consortia, Social Philanthropy, Nation-states, and other mission-focused teams are launching and forming DLT-based social, economic, gaming, and other like minded focuses.
  • 3. technicacorp.com 3 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. BLOCKCHAIN IS A GLOBAL MOVEMENT The U.S. has usually been at the forefront of technological development. In the case of driving vision for regulatory, taxation, cyber defense, and overall economic and social ecosystems (the U.S. is well behind). • Dubai is aiming to become the blockchain capital of the world. 20 blockchain-based initiatives are planned for 2018, to improve government services in road and transport, education, energy and healthcare. • Switzerland provides the most attractive political and regulatory support for blockchain-based start-ups. Zug, a lakeside town in Switzerland, has come to be known as the next Silicon Valley or “Crypto Valley”, and is attracting significant foreign investments in the blockchain space. • United KingdomAs early as January 2016, the UK government had released plans to use blockchain to “reduce fraud, corruption, error and the cost of paper-intensive processes.” The UK government’s BaaS (blockchain-as-a-service) is being used to track welfare paychecks and disburse student loan grants. • Australia In Feb 2018 PayID went live, a country-wide banking system based on the New Payment Platform (NPP) and blockchain which allows mobile numbers or email addresses to be also be used as a way to identify yourself, both to pay and be paid by others instantaneously and lower cost than traditional bank transfers. • Singapore The Monetary Authority of Singapore has announced plans to tokenize the country’s currency on the Ethereum Network. The government has also allocating significant funds for blockchain R&D focused on integrating blockchain into government and financial services. • Venezuela Launched a pre-sale of its commodity-backed "petro" cryptocurrency on February 20, 2018. The first ever cryptocurrency issued by a country. According to the Venezuela government, the petro token will be backed by its oil, gas, gold and diamond reserves. • Estonia which has an e-residency program that allows people from other countries to become digital citizens and register their business here, is now working on a national cryptocurrency dubbed ESTcoin. There are talks of the first-ever government-backed ICO for the token sale of ESTcoin.
  • 4. technicacorp.com 4 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. CRYPTOECONOMICS VS INTERNET COMMERCE LIFECYCLES CATEGORY INTERNET COMMERCE LIFECYCLE CRYTPOECONOMICS/DLT LIFECYCLE (WEB 3.0) Currency • USD (1862) • N/A Fiat Currency • USD (1971) Gold standard removed. • U.S. “FedCoin” White Paper (2016) • China, Russia, Japan, Israel all looking closely at developing state-based cryptocurrency (2017+) • Bitcoin (2009) • Ripple (2012) • Ethereum (2015) • Tether (2017) $1 ~ 1 Tether Protocol • HTTP/TCP (1989) • Blockchain Cryptoeconomics (2009) Technology (enterprise, B2B, government) • ARPANET (1983) • World-Wide Web (1990) • R3 (2014) • Hyperledger (2015) Tools and Programming Languages • Python (1989) • HTTPS (1994) • JAVA (1995) • JavaScipt (1995) • C++ (1998) • Go (2009) • Solidity (2015) (Ethereum) • Hyperledger Composer • Hyperledger Explorer • Hyperledger Cello User Interface/Browser • Mosaic Browser (1993) • Netscape Browser (1994) • MS Internet Explorer (1995). Now MS Edge. • Firefox (2002) • Safari (2003) • Blockchain.info (2011) • Block Explorer (2015) • Blockstack Browser (2015) • Maxthon Browser with Blockchain (2017). China Applications Platforms • Amazon (1994). Hit $1B in its first year. • Google (1998) • Paypal (1998) • Facebook (2004) • Coinbase (2012). $1B Revenue in 2017 • Ethereum (2015). Smart-Contracts • Steemit (2016). Social Media • IOTA (2017). IoT Hybrid Distributed Ecosystems • Google, Amazon, Apple, and Facebook are already hybrid distributed ecosystems, just without leveraging blockchain….yet. • The next P2P ”Ubers” and P2P industry disrupters
  • 5. technicacorp.com 5 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. THE RISING INTEREST IN DISTRIBUTED TECHNOLOGIES • Historically, the trend is one of continual fluctuation between the centralization and subsequent decentralization of computing power, storage, infrastructure, protocols, and code. • Over time, Internet and cloud computing architectures enabled global access from a variety of computing devices. • Even though this 'cloud architecture’ is decentralized in terms of hardware, it has given rise to application-level centralization (e.g. Facebook, Twitter, Google, etc). • The current trend is transitioning from centralized computing, storage, and processing to decentralized architectures and systems. • Distributed Computing, Edge/Fog Computing, and Distributed Ledger Technology are all part of this trend, with DLT going the farthest through software-defined “smart contracts” to delegate and govern explicit control of digital assets to end-users and reduce or remove the need to trust any third-party servers and infrastructure.
  • 6. technicacorp.com 6 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. FACTORS FOR EVALUATING DLT USE • How many participants are in your system? • What is the geographical distribution of the participants? • What sort of performance requirements do you have? • What are the rules, risks, and responsibilities of each party in your Blockchain system? • Need for a shared common database • The parties involved have conflicting incentives, or do not have trust among participants • Multiple parties involved or writers to a database • Trusted third parties involved in the process that facilitate interactions between multiple parties who must trust the third party • i.e. escrow services, data feed providers, licensing authorities, or a notary public • Cryptography is required. Cryptography facilitates data confidentiality, data integrity, authentication, and non-repudiation • Data is dynamic and being entered into many different databases along the lifecycle of the process • Data needs to be consistent across all entities, and/or digitization of such a process is desired • External services not used to gather or store data • Uniform rules infrequently changing that govern participants • Decision making is transparent, rather than confidential • Requires an objective, immutable history or log of facts for parties’ reference • Transaction frequency not exceeding 10,000 transactions per second Blockchain is best suited where one or more of the following conditions apply:
  • 7. technicacorp.com 7 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. GOVERNMENT AND COMMERCIAL ENTERPRISE DLT USE CASE CATEGORIES GOVERNMENT SERVICES • Government Credentials (Visa, Passports, SSN, Birth/Death/ Marriage Certificates • Real Estate/Property Rights • Census • Patents, Trademarks, Copyrights, Royalties • International Passenger Processing • Provenance (Anti-forgery and counterfeiting) • Federal Assistance and Foreign Aid • New Business Models CRYPTOECONOMIC SERVICES • Cryptocurrency Forensics • Cryptocurrency Securities Fraud • Cryptocurrency Asset Taxation • State-based Cryptocurrencies • New Business Models GOVERNMENT/ENTERPRISE SERVICES • Financial Transactions • Procurement • IT Asset and Supply Chain • Insurance • Healthcare/Medical Records • Provenance • Identity • New Business Models
  • 8. technicacorp.com 8 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. GOVERNMENT BLOCKCHAIN INITIATIVES AND USE CASES GOVERNMENT BLOCKCHAIN APPLICATION USE CASES BUSINESS WORKFLOW • Property Management • MIPR • Contracting Support • Human Resource Records Management • ERP/Supply Chain Risk Management SECURITY • Identity • Access Control • Secure Messaging • Advanced Persistent Threats • PKI Time-stamping and Code Signing Support • Cross Domain Solutions • Auditing System Change Logs for Security HYBRID CLOUD/COMPUTE/STORAGE • Cloud Automation • Data Storage Areas of focus: GOVERNMENT APPLICATIONS The Congressional Blockchain Caucus is first and foremost interested in how blockchain technology can improve government services. DATA OWNERSHIP Identity and personal data are nowadays synonymous with fraud and hacking. Blockchain technology poses a solution to identity management, giving an individual ownership of their identity. HEALTHCARE From smart contracts all the way to patient records, blockchain technology offers increased security and ease of use. Established February 9, 2018 Congressional Blockchain Caucus
  • 9. technicacorp.com 9 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. CRYPTOECONOMIC ASSETS: TOP 10 BY MARKET CAP Source: www.cryptocompare.com/coins/list/USD/1 US TOP 10 CRYPTOCURRENCIES • Bitcoin was the first cryptocurrency first mined in 2008. Total market cap was $0. • 10 years later the top 10 Cryptocurrencies in the US account for nearly $400B in market capitalization. • Each cryptocurrency has a defined mission, a different approach, all inspired by Bitcoin. • IOTA, one of the leading cryptocurrencies addressing the IoT market with its new “Tangle” technology that transfers value without fees (no miners). US TOP 10 (OPEN / PERMISSIONLESS) CRYPTOCURRENCIES (FEB 2018)
  • 10. technicacorp.com 10 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. CRYPTOECONOMIC ASSETS: BITCOIN DEMOGRAPHICS Source: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html BITCOIN WALLET DEMOGRAPHICS (FEB 2018) TOP RETAILERS TO SPEND BITCOIN HOW MANY BITCOINS ARE GONE FOREVER?
  • 11. technicacorp.com 11 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. DISTRIBUTED LEDGER VERNACULAR A DISTRIBUTED LEDGER is a type of data structure which resides across multiple computer devices, generally spread across locations or regions. DISTRIBUTED LEDGER TECHNOLOGY (DLT) includes blockchain technologies and smart contracts. While distributed ledgers existed prior to Bitcoin, the Bitcoin blockchain marks the convergence of a host of technologies, including timestamping of transactions, Peer-to-Peer (P2P) networks, cryptography, and shared computational power, along with a new consensus algorithm. A DLT generally consists of three basic components: • A data model that captures the current state of the ledger • A language of transactions that changes the ledger state • A protocol used to build consensus among participants around which transactions will be accepted, and in what order, by the ledger. BLOCKCHAIN (DATA MODEL) A blockchain is a peer-to-peer distributed ledger forged by consensus, combined with a system for "smart contracts" and other assistive technologies. (hyperledger.org) SMART CONTRACT (LANGUAGES) are simply computer programs that execute predefined actions when certain conditions within the system are met. CONSENSUS (PROTOCOL) refers to a system of ensuring that parties agree to a certain state of the system as the true state.
  • 12. technicacorp.com 12 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. Microsoft Project Bletchley and Coco Framework - Microsoft Marketplace Distributed Apps (DAPPS), integrated with MS SharePoint, MS O365, Power BI Dashboards, and running on MS Blockchain as a Service (Hyperledger, Chain, Ethereum) DLT MISSION USE CASE TAXONOMY PERMISSIONED PERMISSIONLESS CLOSED BLOCKCHAIN A private network that maintains a shared record of transactions. The network is accessible only to those who have permission and transactions can be edited by administrators. PERMISSIONED • Hyperledger Fabric • Hyperledger Sawtooth • Hyperledger Indy • Hyperledger Iroha • Hyperledger Burrow • Enterprise Ethereum • Chain • EOS (Private Fork) • Ethereum • Ripple • Bitcoin • Most Cryptocurrencies • Proof-of-Stake (PoS) Chains • Delegated PoS Chains (DPoS) • Ethereum (after Caspar) • Corda • Quorum • R3 • EWF • B3i HYBRID BLOCKCHAIN Consisting of Public and Private State of network where every transaction is private but still verifiable and immutable it restricts the rights to view, modify append and approve transactions to selective members Best for DLT mission use cases for government agencies and commercial enterprise Proof-of-Concept, Prototypes around financial transactions, smart-contract, and Distributed Applications (DAPPS). Best for DLT mission use cases for the Defense & Intelligence sector, some civilian agency, and enterprise Proof-of-Concept, Prototype smart-contract involving Insider Threat, Cloud Automation, Supply-Chain, Provenance. OPEN BLOCKCHAIN  A public network that maintains an immutable record of transactions. Anyone can publish a transaction and participate in the network by adhering to a set of published rules. PRIVATE CONSORTIUM FEDERATED PUBLIC Best for DLT mission use case, Proof-Of- Concepts and semi-distributed applications running partially within one or more commercial cloud service providers, on-premise, and/or any combination of permissioned or Permissionless use cases. PERMISSIONED & PERMISSIONLESS
  • 13. technicacorp.com 13 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. DLT OPEN/CLOSED SYSTEM COMPARISON ATTRIBUTE CLOSED/PRIVATE/PERMISSIONED OPEN/PUBLIC/PERMISSIONLESS Ecosystem Governance • Government agency or departments delegating and verifying, authorized humans and machine (nodes). • Commercial Enterprise delegating and verifying authorized humans and machines (nodes). • Anyone Read/Write Access • Customizable: Anyone, only designated nodes, and/or subsets of humans, machines, database • Anyone Compute/Storage • On-premise agency or enterprise servers or distributed nodes • Public, Globally distributed Security (Consensus) • Apache Kafka, Proof-of-Elapsed Time (PoET), YAC, Tendermint, RBFT • Proof-of-Work (PoW), Proof-of-Stake (PoS) Identity • Pre-approved known and trusted participants • Anonymous/Pseudonymous participants Pros • Clearly defined governance and oversight • Higher operational security, verification, validation • More cost-effective • Resilient and adaptable to insider/external cyber attacks • Higher volume, faster transaction speed, more scalable • Higher speed of innovation • No central control • Can’t be shut down • Transparent • Creates open and dynamic marketplaces Cons • Leading solutions are at “Version 1” software release level of maturity (but highly suitable for proof-of-concept/prototype) • Several purpose-defined frameworks not yet functionally integrated. • No blockchain interoperability standards yet (NIST is taking the lead) • Hard to scale • Hard to maintain • PoW Consensus is energy intensive • Transaction costs • Subject to “51% attacks”
  • 14. technicacorp.com 14 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. THE CRYPTOECONOMICS OF PERMISSIONLESS BLOCKCHAINS • Cryptoeconomics explores the intersection of cryptography and economic incentives. • Cryptography is used for ensuring network security at various levels and functions. • Economic incentives are built-in to the participating nodes in the network to ensure that, at any given point, the majority of players in the network operate in a desirable way. Permissionless blockchains are public and open for anyone to join (including malicious actors). The key lies in incentivizing good behavior in a critical majority of the network, such that: • The malicious actors cannot take over the network through an escalated attack. • The malicious actors cannot collude to undertake an organized majority attack on the network. • The payoffs of securing the network are consistently higher than the cost of attacking the network. • The cost of attacking the network is prohibitively high. "Cryptoeconomics is about building systems that have certain desired properties using cryptography to prove properties about messages that happened in the past while using economic incentives defined inside the system to encourage desired properties to hold into the future.“ -- Vitalik Buterin Ethereum Founder End-User Charlie End-User Samantha Smart Contract Create Transactions Transactions Included in a Block ü ü ü ü Blockchain/Ledger
  • 15. technicacorp.com 15 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. Ledger Ledger Ledger LedgerLedger Ledger Validating Entities Peer Peer PeerPeer Peer Peer THE BLOCKCHAIN LEDGER The Distributed Ledger is an authoritative book of transaction records with unique properties • Many copies are kept synchronized • Multiple parties can create individual records • Software-defined cryptographic consensus algorithms are used to determine the validity and order of written transaction records • Each record is linked to the prior one, ensuring that written records cannot be modified or deleted without alerting the readers of the book
  • 16. technicacorp.com 16 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. HYPERLEDGER-FABRIC REFERENCE MODEL • Permissioned system: strong identity management • Distinct roles of users, and validators • Developers deploy new pieces of code (chaincodes) that End-Users invoke through transactions • Validators evaluate the effect of a transaction and reach consensus over the new version of the ledger • Ledger = total order of transactions + hash (global state) • Pluggable consensus protocol, currently PBFT & Sieve Ledger Ledger Ledger LedgerLedger Ledger Validating Entities Transaction (defining contracts) Transaction (invoking contracts) Fabric Client Fabric Client End-User Samantha Application Charlie Permission Issuer Peer Peer PeerPeer Peer Peer
  • 17. technicacorp.com 17 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. Ledger Ledger Ledger LedgerLedger Ledger Validating Entities Peer Peer PeerPeer Peer Peer Membership Auditors Client End-User Membership Management User Registration Anonymous Credentials Nominal Credential Nominal Credential Peer Registration TRUST ABOVE ALL ELSE: MEMBERSHIP • End-Users prove identity and issue two types of credentials (Transaction/Anonymous and Enrollment/Nominal certificates) • Peers only issue Enrollment certificates • Nominal credentials contain encryption and signing keys • Auditors can audit certificates and ownership The ultimate measure of Hyperledger projects and all blockchain technology is whether the architecture and implementation can be trusted to validate and secure transactions. With Hyperledger Fabric, the trust starts with selecting and identifying users (who can also be thought of as members in a permissioned system). In this case, users can prove their identity and issue two types of credentials through either transaction certificates or enrollment certificates, with the latter issued only by peers within this sort of permissioned system. Nominal credentials contain encryption and signing keys, and the designated auditors can audit certificates and ownership. The underlying trust in this system involves peer institutions each wanting the same clean system that disintermediates those pesky third parties while maintaining the inviolability of transactions and the system in general.
  • 18. technicacorp.com 18 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. Ledger Ledger Ledger LedgerLedger Ledger Validating Entities Peer Peer PeerPeer Peer Peer Contract & System Auditors Client Client End-User Samantha End-User Charlie Audit of Samantha’s contracts Nominal visible only to validating entities Transactions Anonymous visible only to validating entities and Samantha TRUST ABOVE ALL ELSE: CONFIDENTIALITY AND AUDITABILITY Auditing through proper key distribution at: • System level, i.e., all system transactions • User level, i.e., a user’s transactions • Contract level, i.e., contracts messages Government agencies and businesses assign information classification levels and confidentiality, due to competitiveness, protection laws, and regulation on confidentiality of personal data dictate the need for privacy of certain data elements. Hyperledger achieves this through data partitioning on the Blockchain. These Hyperledger Private Channels allow for data to go to only the parties that need to know, based on their security attributes. Contract system auditors, for examplea government agency a Chief Information Security Officer (CISO) can monitor and be alerted to potential Insider Threat tampering. Contracts can be encrypted such that decryption is possible only by the validating entities and potentially authorized users.
  • 19. technicacorp.com 19 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. CYBER THEATER INVOLVES ADVANCED PERSISTENT THREAT 1. Manage Smart Contract Diagnostic • The scope of the current release 2. Platform Connection Diagnostic • Assesses overall architecture including multi-signature use, key management method, and proprietary API 3. Distributed Apps Diagnostic • Evaluates security on an individual unit bases if DApps/proprietary apps are developed 4. Platform Setting Diagnostic • Is other companies’ secret information not accessible? • Can other companies’ information be updated? • Has a default username/password not been set? etc. Web Application Smart Contracts ü ü ü ü Access Company A 2 Generate/ Implement/ Reference Company B Company C Company D ü ü ü ü User inside Company D with malicious intent 1 4 ü ü ü ü Blockchain Attack Attack Attack Attack 3
  • 20. technicacorp.com 20 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. Ledger BLOCKCHAIN TRANSACTION TX Number From To Data Signature 101 Party A Party B XXXXX Party A Sign 102 Party A Party C YYYYYY Party A Sign 103 Party C Party B ZZZZZZ Party C Sign 104 Party B Party D AAAAA Party B Sign 105 Party A Party C MMMM Party A Sign 106 Party C Party B FFFFFF Party C Sign 107 Party B Party D PPPPP Party B Sign 108 Party A Party C EEEEEE Party A Sign 109 Party C Party B QQQQQ Party C Sign DISTRIBUTED LEDGER PROTOCOL B1 B2 B3 Ledger Ledger LedgerLedger Ledger Peer PeerPeer Peer Peer CONSORTIUM PEER-TO-PEER NETWORK3 STEPS TO A BLOCKCHAIN TRANSACTION Smart Contract Execute Code Update & Retrieve Data Storage ü ü ü ü 1. Create Transaction ü ü ü ü 2. Verify Transaction 3. Enforce Transaction
  • 21. technicacorp.com 21 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. AN EXAMPLE BUSINESS NETWORK DEFINITION The Hyperledger Fabric Composer tool is used to simplify the process of defining a business network, creating and tracking assets, and performing transactions. A business network modeling participants, assets, registries, and transactions. Transaction processors implement business logic on these elements. Access Control Lists (ACL) define privacy and sharing settings. Source: IBM Corporation
  • 22. technicacorp.com 22 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. DLT MARKET EVOLUTIONARY TRENDS GLOBAL USE CASES • Digital Identity (ID2020) • P2P Domain Name Service (Namecoin) • P2P Everything Platforms STANDARDS FOR INTEROPERABILITY • Global WWW (W3C) • US Data Standards (NIST). No current standards exist. • Hybrid Permissioned/Permissionless DLT ADVANCED SYSTEMS AND TOOLSETS • Multichain Systems • Blockchain as a Service (BaaS) • Off-Chain Middleware • Sidechains • Oracles • Distributed Autonomous Organization (DAO) BLOCKCHAIN INTEGRATION WITH OTHER TECH • AI/Machine learning (DeepBrainChain) • IoT (IOTA, Microsoft) • ERP Systems (SAP, Oracle, Microsoft)
  • 23. technicacorp.com 23 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. NOTEWORTHY MISSION USE CASE Digital identity for 1 Billion people not currently connected to the global digital grid for: • Human Rights • Basic Services • Economic Opportunity • Gender Equality • Global Development MULTI-NATIONAL, MULTI-ORGANIZATIONAL, INDIVIDUAL COLLABORATION • United Nations • Hyperledger • Microsoft • Individual Contributors FEATURED USE CASE: ID2020 ALLIANCE MISSION USE CASE B2B Connect is a blockchain-based business-to- business payments service serving U.S.-based Commerce Bank, South Korea's Shinhan Bank, the Union Bank of Philippines and the United Overseas Bank, based in Singapore. B2B Connect eases cross-border payments by facilitating direct payments between institutions, cutting out the middleman the industry currently relies on. The platform is based on blockchain startup Chain - is also designed to ensure secure, yet transparent payments between enterprises. FEATURED USE CASE: VISA B2B CONNECT
  • 24. technicacorp.com 24 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. LEARN FROM THE DLT INFLUENCERS BY FOLLOWING THEM ON SOCIAL MEDIA
  • 25. technicacorp.com 25 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. CRYPTOECOSYSTEM LAB: LEARN BY PARTICIPATING DECIDE ON A WALLET STRATEGY PORTFOLIO DESIGN & STRATEGY LEAP, TRACK, MANAGE Paper Coindesk Paper - Wallet Tutorial Online (US-based) https://www.coinbase.com https://poloniex.com https://www.kraken.com/ USB Trezor Grey bitcoin hardware wallet compatible with bitcoin, dash, zcash, ethereum Research and Daily Follow • https://www.coindesk.com/ • https://www.cryptocompare.com/ Autonomous Portfolio • https://prism.exchange/ (Live Beta) Self-Managed Portfolio • https://cointracking.info/ • https://www.blockfolio.com/ • https://altpocket.io/ Leap 1) Pick the right moment and buy your first (partial) bitcoin, Ethereum, and/or Litecoin. 2) Open multiple exchanges and move cryptocurrencies around to experience the transaction Track and Manage • Monitor on Cryptocompare and Coindesk the live evolution of DLT and further research mission use cases of interest to you. • Track your assets in Cointracking.info or similar tool. • Manage and reshuffle your portfolio as your risk profile and investment strategy evolve.
  • 26. technicacorp.com 26 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. LOOKING TO TAKE YOUR DLT TO THE NEXT LEVEL? DLT LEARNING - START HERE ORGANIZATIONS AND WHITE PAPERS THAT INSPIRE GLOBAL DLT NEWSBOOKS THAT INSPIRE Quality education for everyone, everywhere. At edX, we take our mission of increasing global access to quality education seriously. We connect learners to the best universities and institutions from around the world. www.edx.org Learning partner for your team or organization. Don’t just learn it. Master IT. The most effective learning system. World’s highest completion rate. www.edureka.co A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. www.bitcoin.org Decentralized platform that runs smart contracts; applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. www.ethereum.org Platform for distributed ledger solutions, underpinned by a modular architecture delivering high degrees of confidentiality, resiliency, flexibility, and scalability. Designed to support pluggable implementations of different components, and accommodate the complexity and intricacies that exist across the economic ecosystem. www.hyperledger.org CoinDesk is the leading digital media, events and information services company for the crypto asset and blockchain technology community. Its mandate is to inform, educate and connect the global community as the authoritative daily news provider dedicated to chronicling the space. www.coindesk.com
  • 27. technicacorp.com 27 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. CONCLUSIONS & LOOKING FORWARD CLOSED BLOCKCHAIN ECOSYSTEMSGENERAL • Trust above all else • DLT is a revolution, we are in a phase similar to the early days of the internet, with much hype and promise and many differences. • There is much hype (largely on cryptocurrency side) and perhaps that diminishes the strong business workflow mission and use cases. • The US is well behind other nations in understanding, posing a vision, regulatory, taxation, securities security's law, law enforcement, and distributed applications • Trust above all else • Enterprise/Govt DLT solutions have the ability to streamline communication, reduce costs, increase transparency, and increase trusted transactions between government, enterprise, and individuals. • Systems Integrators Help Government and Enterprise integrate DLT into existing infrastructure and workflows. Major Permissioned DLT Organizations • Hyperledger • Corda • Qurom Enterprise/Government Market Categories • Financial Transactions • Procurement • IT Asset and Supply Chain • Insurance • Healthcare/Medical Records • Provenance • New Business Models Government Services • Government Credentials (DMV, Visa, Passports, SSN, Birth, Death, Marriage Certificates) • Real Estate/Property Rights • Census • Patents, Trademarks, Copyrights, Royalties • International Passenger Processing • Provenance (Anti-forgery and counterfeiting) • Federal Assistance and Foreign Aid • New Business Models NUMEROUS GOVERNMENT/ENTERPRISE MISSION USE CASES & SCALABLE TO A GLOBAL IMPACT
  • 28. technicacorp.com 28 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. US GOVERNMENT RESEARCH & DEVELOPMENT CONTRACTS DLT FOR GOVERNMENT THROUGH OTHER TRANSACTION AUTHORITY (OTA) AGREEMENTS C5 Consortium Features: Cyber Challenge, Army, DoD Established: 2011 Website: C5Technologies.org Mission Areas: • Offensive/Defensive Cyber Operations • DoD Information Network (DoDIN) Operations • Systems Security • Control Systems & Automation Systems • Software and Hardware Performance Analysis • Software and Hardware Sustainment/Supportability • Emerging Software and Hardware Technologies Contacts SOSSEC Consortium Features: DoD, AFRL, DHS, NSA projects Established: 2004 Website: SOSSECConsortium.com Mission Areas: • Critical Infrastructure and Force Protection Technologies • Command and Control Technology Development • Protecting Analyzing and Sharing Information • Platform and Integration Testing • Sensor Development and Platform Integration Government Sponsor: The U.S. Army Armament Research, Development and Engineering Center (ARDEC) at Picatinny Arsenal, NJ is the sponsoring government organization in the DoD for both the C5 Consortium Government Sponsor: The U.S. Air Force Research Laboratory at Wright-Patterson Air Force Base, Ohio is the sponsoring government organization in the DoD for the SOSSEC Consortium RAPID ACQUISITION: 90-DAY PROCUREMENT LIFECYCLE FOR PROTOTYPE AND DEVOPS SYSTEMS CUSTOMIZED TO GOVERNMENT SPECIFICATIONS
  • 29. technicacorp.com 29 ©2018 Technica Corporation. All Rights Reserved. Technica Corporation Confidential and Proprietary. LETS CONTINUE THE DISCUSSION Jason Devine DLT for DoD jdevine@technicacorp.com Bill Groah DLT Council bgroah@technicacorp.com Jeffrey Hallett DLT for Enterprise jhallett@technicacorp.com Rhonda Eldridge DLT R&D, Prototypes reldridge@technicacorp.com Doug Sickler DLT for Government dsickler@technicacorp.com To continue the discussion around whether your mission and use case idea is optimum for DLT and for general inquiries, reach out to us at: DLT@technicacorp.com