More info: https://blockchainhub.net/ Blockchain for Beginners: Blockchain history, state of development, outlook & current challenges #bitcoin #ethereum #smartcontracts

1. Blockchain
State of Dev, Outlook & Challenges
BlockchainHub ■ Dr. Shermin Voshmgir ■ April 14, 2017

2. Internet
of
Value
Internet of Information
TCP/IP = communication protocol
revolutionized the way we exchange
information
aka ‘Information Data Highway’
1st use case: Email
Internet of value
Blockchain = value exchange protocol
can transform business, economy &
politics with smart contracts as a basis
for peer to peer transactions.
1st use case: Bitcoin

3. History
Bitcoin
Financial Crisis
September 15th 2008
Collapse of Lehman Brothers
Nadir of the financial crisis
-> Unique point of failure
Bitcoin White Paper
October 31st 2008
Satoshi Nakamoto published the white
paper for what he called bitcoin
-> Crypto Currency
that distributes trust
gets rid of
Unique point of failure

4. Centralized
Systems
How they work
Information & Control
is held by a central source

5. Centralized
Systems
When they Fail
If the main node is
corrupted/censored/fails
the entire network fails

6. Decentralized
Systems
How they work
Decentralized
Information & Control

7. Decentralized
Systems
When they Fail
If one node is corrupted/censored/fails
the network can ‘repair’ itself

8. TRUST

9. Decentralize
Trust
Through machine Consensus
Blockchain lets people
who have no particular confidence
in each other collaborate,
without having to go through a
trusted 3rd party
aka
neutral central authority

12. Shared,
Trusted,
Public,
Ledger of Transaction
That everyone can inspect
No single user controls
● Shared: Every node in the P2P
Network is client as well as server,
holding identical copies of the
application state.
● Trusted: Game Theory is used to
model Economic incentive, for
each node in the network to verify
the transactions according to
protocol.
● Public Ledger of Transactions
Cryptography in the form of
Distirbuted Merkle hash trees
guarantee security as well as
privacy

13. Why is Blockchain more tamper resistant than centralized systems?
It’s not enough to manipulate the date on one computer, you have to manipulate the data on a majority
of computers and the older the date, the more blocks you have to go back in time, the more expensive it
become to break the encryption. Input and output are usually out of proportion.

14. Permission/
Verification
By Consensus instead of
Trusted 3rd Party
Each transaction on the blockchain is
verified by all nodes in the network to
be true or false?
If the majority of the nodes in the
network agrees that a certain
transaction is true, it is validated and a
new block is created and added on ‘top’
of the chain.

15. Distributed Record Keeping
No files
No legacy systems
No data redundancies

17. Public Ledger of
Transactions
of the
Trusted 3rd Party?
● Shared
● Trusted
● Public ledger of transactions
● That everyone can inspect
● But which no single user controls

18. P2P Transactions
without a middle man

19. Blockchain Intro Video: Bitcoin and Blockchain Technology Explained
https://www.youtube.com/watch?v=oSP-taqLWPQ

20. Trustless Trust
vs
Permission Control

21. Which
Blockchains?
# Bitcoin (1 Smat Contract)
first use case of Blockchain
# Altcoins (Experimental stage)
Single purpose Forks of Bitcoin
# Ethereum (Smart Contract OS)
Universal Operating System where you
can build any type of smart contract
# Private/Consortium Blockchains
Not Blockchains in the traditional
sense, because not censorship
resistant. Rather distributed databases.

22. Ethereum
Crypto Economy
Crypto Law
# Beyond transferring value: Can
verify if a party to a contract has
fulfilled its side of the bargain
# Decentralized virtual machine that
can run any kind of smart contract or
dApp
# Ethereum contracts can be
implemented in various languages,
compiled into bytecode for the
Ethereum Virtual Machine before being
deployed to the blockchain.

23. Smart
Contracts
When a computer can
verify or auto-enforce
any type of
business transaction
or
legal agreement

24. Smart
Contracts
Traditional Definition
Automated performance
Automated verification
Auto enforceable

25. Smart
Contracts
Ethereum Definition
decentralized Application
dApp
long lived process
on the blockchain

26. Ethereum Technology Stack
Decouples the Smart Contract Layer from the Consensus Layer (unlike Bitcoin)

27. Public
Blockchain
Bitcoin
Ethereum
Litecoin
etc...
Federated
Blockchains
R3
Private
Blockchains
Company
internal
Like the
“IntErnet” in
the 90ies?
Like the
“IntArnet” in
the 90ies?
Distributed
Ledger
Technologies
Internet
of
Blockchains

28. The Future of Apps are dApps

29. Banking
blockchains as
record of who owns what
instead a series of internal ledgers
● Bitcoin Blockchain
- transactions (few cent vs. 5-10%)
- faster (m/seconds vs. days)
- censorship resistant (Russia...)
- more secure: hard to quantify
● Fintech Use Case
Santander Bank reckons that it
could save banks up to $20 billion
by 2022

30. eGovernment
● Self Sovereign Identity
● Public Registies: Land
registries,, Marriage
Cerificates,...
● Transparency
● Participation
● eVoting

31. Online
Notaries
Registers of the ownership
● Documents
● Luxury goods
● Works of art

32. Energy
Energiewende in Deutschland
● P2P Energy Trading
● Smart Grids
● Mobile Charging

33. IoT
User Access Control
for machine to machine
smart contracts

34. Accounting
Revolution
# Auditing & Compliance
On the fly, no after the fact
# Cooking the Books?
# Less human errors
# Faster taxation cycles

35. Supply Chain
Revolution
#Disintermediation
#Transparency
#Provenance

36. Dirupting
Governance
DAOs
Decentralized
Autonomous
Organisation
Bitcoin, TheDAO

37. Blockchain
& Law
# Reduction of Compliance und
Controlling Kosten
# Legal Status of Smart Contracts
# Which law applies in a P2P
Network /serverless world
# Legal Status of DAOs and Token
Sales

38. Current
Challenges
● Scalability
● Identity & KYC
● Privacy
● Business models on Public
Blockchains?
● Lack of Developers
● Regulatory uncertainties

40. History of the Internet

41. www
Revolutionized Information
Information Data Highway

42. Web2
Programmable Web
Social Media & Sharing Economy
P2P solutions with middle man

43. Web3
Decentral Web
P2P transactions without middle man

44. It’s like 1990 for the Internet
we don’t know how this will pan out
but the future is likely to be much more #decentral

45. blockchain (Ethereum, Private BCs, Bitcoin)
ipfs, swarm (decentralized file storage)
whisper (decentralized messaging)
SoLiD (Social Linked Data) IPDB, BigchainDB

46. Concergence of Technologies

47. Blockchain
IoT AI
3D
Printing

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@blockchainhub
Shermin Voshmgir
@sherminvo
@sherminvoshmgir