The slides are a tutorial to blockchain to my friends in Spaces, Hsin Chu. I also will introduce Facebook's cryptocurrency, Libra and give my comments to Libra

1. Blockchain Tutorial for
Spaces
Chang, Chong Yie
Ver. 1906201027
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2. Who am I?
2
• Job
• Blokcert, 2018 -
• ITRI, 2013 – 2018
• iCatch, 2012 – 2013
• Avermedia, 2011
• ITRI, 2002 – 2009
• Education
• IMBA, IE Business School, 2009 – 2010
• Pre-MBA, Thunderbird, 2009
• Ms. in EE, CCU, 1998 – 2001

3. Goal of The Slides
 Basic introduction to blockchain
 Basic introduction to Cryptocurrencies
 Key strength of blockchain as a business driver
 Challenges of Blockchain
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4. Basic Introduction to Blockchain4

5. Let’s Start from Bitcoin
The first blockchain
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6. Centralized Database
Admin
User User
• Who can read/write
• The admin actually owns
the data
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7. Centralized Data with Multiple Parties
- Wikipedia
Company A Company B
• Actually, the
administrator can freeze a
page if he wants.
• You believe that Wiki is a
free
world.
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8. Centralized Data with Multiple Parties
- Facebook
A DB controlled
by a 3rd party
Company A Company B
The 3rd
party
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9. Blockchain
• No, they do not trust each other
• You can join the eco-system by
following the same protocol
• The have consensus.
• Each node can have a full copy of
the chain.
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10. Computer Science behind Blockchain
-Hash
Any length Fixed length
Fast
OK
NO
• In general, you can verify uniqueness of data by
using “hash”.
• Blockchain uses hash to guarantee that previous
block is not tampered.10

11. Computer Science behind Blockchain
-Public Key Cryptography
• The algorithm guarantees that
• any one can encrypt data by
using Alice’s public key.
• only Alice can decrypt the
information.
• It is slow.
An address is an alias of
a public key
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12. Computer Science behind Blockchain
-Digital signature
• Blockchain uses
digital signature to
guarantee that a
transaction is really
executed by “an
address”.
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Hash
Encrypt hash with
private key
Hash
Decrypt signature
with public key

13. Computer Science behind Blockchain
-P2P Network
• Blockchain uses P2P
network to make sure
that everybody is aware
of a transaction.
• The slow propagation of
P2P network limits
blockchain’s capacity.
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14. Consensus on Blockchain #1
 There is no authority on blockchain.
 A transaction is valid because “most people have the consensus on
the validity of a transaction.”
 A transaction is valid not because it is valid but because everybody
admits it.
• In a world without authority, democracy is the
solution.
• Truth is not important, people believing in you is
important.
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15. Consensus on Blockchain #2
• Everybody has the consensus that
the longest chain is trustable.
• Believe in market
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16. Users on Blockchain
• Wallet: Users use wallets to keep the
key and issues transactions. It does
not have to keep the whole chain.
• Exchange nodes accept transactions
and forward transactions on P2P
network.
• Miner nodes write transactions on
the blockchain.
Each node keeps a
full copy of the chain.
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17. Transactions on Blockchain
• A newer block hashes the previous
block.
• Each block contains multiple
transactions.
• Senders issue transactions.
• You cannot reverse a transaction
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18. Why is Blockchain Temper-proof
Newer block hashes
previous block and
guarantees that the
previous block is not
tampered.
Each node keeps a
full copy of the chain.
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19. What is Mining? #1
The first question, the oldest
question in the universe, hidden in
plain sight.
Who can write a transaction on the chain?
The person who cannot lose
his value on blockchain.
Invalid to consortium chain
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20. What is Mining? #2
• The program sets a difficult quiz question to find
a set of special values which only can be solved
by brute-force.
• The first winner gets bitcoins as reward and
collects transaction fees from transactions.
• There will be a new block every 10 minutes.
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• Making evil invest a lot on the eco-
system

21. Why is Blockchain So Slow?
 Transactions are batch-processed into a block every 10 minutes.
 People need time to figure out the longest chain.
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22. Why is Blockchain So Successful
 A genius solution for multiple parties who may not trust each other.
 Everybody can join the market as long as that the new user uses the
same protocol.
 Cryptography
 makes records on blocks trustable and auditable.
 allows transactions executable automatically among multiple parties.
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23. Blockchain Platform Overview #1
 3 types of blockchain
Public: Any person can access the blockchain and any person can
become a node on the chain
Consortium: Only accepts nodes from selected parties
Private: There is only one party control all nodes of a blockchain
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24. Some Major Blockchain Platforms #1
Name Type of Chain
Supported
Applications Pros/Cons Notes
Bitcoin Public, Private Asset,
cryptocurrencies,
snapshot of
consortium and
private chains
Has been reviewed
thoroughly, trustable/
Transaction service
charge is too high,
low transaction
throughput
One of the only two
crypto currencies I
trust.
Ethereum Public, Private, and
Consortium
Asset,
cryptocurrencies,
snapshot of
consortium and
private chains,
complicated business
applications
Has been review
thoroughly, trustable/
Transaction service
charge is too high,
low transaction
throughput, difficult
to develop
consolidate smart
contracts
One of the only two
crypto currencies I
trust.
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25. Some Major Blockchain Platforms #2
Name Type of Chain
Supported
Applications Pros/Cons Notes
Hyperledger Consortium and
Private
Asset, Business
applications
Supported by IBM
and Linux, Better
architecture design/
lack support of
cryptocurrencies
I only have limited
knowledge on
Hyperledger
Ripple Public Wire transfer Fraud

26. Some Major Blockchain Platforms #3
Name Type of Chain
Supported
Applications Pros/Cons Notes
IOTA IOT applications • It may be a fraud.
• I only have limited
knowledge on IOTA
• Too complicated to be
publicly reviewed.
R3 • It was famous but not
important any more
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27. Cryptocurrencies
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28. Only Two Cryptocurrencies Trustable
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• The mechanism is transparent.
• Enough liquidity on the market.
• The intrinsic property as asset is obvious
• Enough liquidity on the market.
• The eco-system is keep growing.

29. ICO without Regulation = Fraud
 Why are there regulations for raising fund on the market?
To prevent fraud.
 Do most ICOs work hard on preventing fraud?
No
 Can we link the token to company performance?
No
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30. Regulators vs. Cryptocurrencies30
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31. Cryptocurrencies vs. Fiat Currencies31
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32. Why is Cryptocurrencies Critical?32
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33. The more chaotic the world is
The Better bitcoin is
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34. Case Studies
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35. Facebook Libra
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36. What is Libra? I
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 The cryptocurrency developed by Facebook.
 Trying to develop a payment solution to empower billions
of people especially who are out side of traditional banks

37. What is Libra? II
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 It has totally new architecture
 Blockchain: Libra
 Wallet: Calibra
 Programming language: Move
 Peg to low-volatility assets, such as bank deposits and
short-term government securities in currencies from stable
and reputable central banks

38. What is Libra? III
38
 The founding partners are the base of the ecosystem
 Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
 Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra,
Farfetch, Lyft,
 Mercado Pago, Spotify AB, Uber Technologies, Inc.
 Telecommunications: Iliad, Vodafone Group
 Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
 Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital,
Thrive Capital, Union Square Ventures
 Nonprofit and multilateral organizations, and academic institutions: Creative
Destruction Lab, Kiva, Mercy Corps, Women’s World Banking

39. What is Libra? IV
39
 Operation
 Base: Swiss
 Criteria to members
 A half rack of server space, a 100Mbps or above dedicated internet connection, a full-time
site reliability engineer and enterprise-grade security.
 Businesses: must hit two of three thresholds of a $1 billion USD market value or $500
million in customer balances, reach 20 million people a year and/or be recognized as a top
100 industry leader by a group like Interbrand Global or the S&P.
 Crypto-focused investors must have more than $1 billion in assets under management,
while Blockchain businesses must have been in business for a year, have enterprise-grade
security and privacy and custody or staking greater than $100 million in assets.
 Only up to one-third of founding members can by crypto-related businesses or individually
invited exceptions.
 Research organizations like universities, and nonprofits fulfilling three of four qualities,
including working on financial inclusion for more than five years, multi-national reach to
lots of users, a top 100 designation by Charity Navigator or something like it and/or $50
million in budget.

40. What is Libra? V
40
 Libra is designed to support cryptocurrency other than
pure blockchain such as Hyper Ledger
 Different from Bitcoin and Ethereum, Libra is one of the
data types supported by Libra but not the special case to
the blockchain.
 Libra does support limited smart contract feature.
 It is still a kind of blockchain without fixed block size.

41. Issues
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42. Concerns from Regulators
 Will Libra becomes a currency strong enough to compete against
USD?
 Can any government regulate it?
 Would it undermine government’s control to currency policy?
 Lack of communication to regulators
 Undermine US’s control to the world
 Unclear KYC procedure
 Lack of AML
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43. My Comments I
 Good directions
 Cryptocurrencies first, smart contract later
 Clear and abundant documents
 Challenges
 Conflict price
 When Libra becomes big, it will influence assets which Libra pegs to. The price
of assets will affect the value of Libra again.
 The exchange rate of Libra to other currencies is difficult to make.
 The gas price will be high and people out of bank systems cannot
afford
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44. My Comments II
 Challenges
 Lack of communication to governments
 Lack support from major banks
 Weak relationship with open-source communities
 A game of limited rich companies favored by Facebook
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