A session by Interim Area Chair, Strategy & Statistics Area William J. Loschert Endowed Chair in Entrepreneurship, Fordham University on the topic of 'Blockchain, Smart Contracts & IoT' at InterCon USA 2019, held at Caesars Palace, Las Vegas on 18-20 June, 2019.
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Blockchain, Smart Contracts & IoT
1. Blockchain,
Smart Contracts
& IoT
Prepared for:
InterCon, Day 3
Thurs., June 20, 2019
2:20pm - 2:50pm
Caesars Palace
Las Vegas, NV
Benjamin M. Cole, Ph.D.
William J. Loschert Endowed Chair in Entrepreneurship
Gabelli School of Business, Fordham University
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2. Some Perspective...
59% of Respondents said
“I’ve never heard of this
technology”
and....
80% admit they don’t
understand blockchain,
even if they’ve heard of it!
“Trust in Technology” Report
by HSBC...
Sample: 12,019 people from 11 countries and territories:
Canada, China, France, Germany, Hong Kong, India,
Mexico, Singapore, UAE, UK, and the US.
Sources: HSBC (2017); WEF (2015)
58% of Respondents predicted
that 10% of global gross GDP
will be stored on blockchain
technology by 2027
“Technological Tipping Points”
Report by World Economic Forum
Sample: 800 executive & expert respondents to the Technological
Tipping Points survey of the World Economic Forum’s Global
Agenda Council on the Future of Software & Society
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3. Deloitte’s “Breaking
Blockchain Open” Survey
Sample: 1,053 senior executives in 7 countries (Canada, China, France, Germany, Mexico, U.K. & U.S.)
at firms with $500+ million in annual revenue in Deloitte’s (2018) “Breaking Blockchain Open” survey
53%
51%
50%
44%
40%
12%
6%
30%
Supply Chain
Internet of Things
Digital Identity
Digital Records
Digital Currency
Payments
Voting
Other/Unsure/None
Q: Which of the following blockchain use cases is your company working on?
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4. What is Blockchain?
“Technology that allows people who don’t know each other
to trust a shared record of events.”
– Bank of England
“Blockchain is like writing on a piece of paper,
then holding it up and saying,
‘Here is what I wrote. Can everyone see it?”
– Niall Dennehy, AID: Tech
“The shady database you use when
you don’t trust anyone.”
– Miko Matsumura, Pantera Capital
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5. What is Blockchain?
Global distributed ledger of transactions
Managed by a network of computers
(not one central computer)
Any computer may enter or leave
the network at any time without
jeopardizing...
Integrity of the database
Availability of the database
Any computer can verify the ledger by rebuilding it
from scratch
Download the blockchain and process the audit trail
Sources: FollowMyVote.com; www.eightoneadvisory.com
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6. Blockchain Technology Stack
Modified from: Kasireddy (2017)
= “Monetary policy”
enforced by the
blockchain (e.g.,
What constitutes
consensus? How
much is paid for
work?, etc.)
= Financial incentive to
ensure rules are
followed (equivalent to
USD, EUR)
= Immutable,
decentralized ledger
of transactions
authenticated through
public key
cryptography
= Called
“decentralized
applications” or
dApps
Smart
Contracts
Smart
Contracts
Smart
Contracts
= Scripts with
conditional statements
for execution
IoT IoT
= Internet of Things
(IoT) devices
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7. Smart Contracts
Neither “Smart” nor “Contracts”
Rather, Smart Contracts are mini executable
programs (computer code) that do something
when a condition is met
When BTC price > $10,000, sell 2.5 BTC
When hurricane rating ≥ 4, stop shipment
When politician votes yes on H.R. 2751, make political
donation of $10 to politician and email accountant for
tax purposes
Can be strung together to create a cascade of
contracts that execute when others execute
Source: EY (2016)
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8. Oracles
Outside data streams can be accessed via API if
one “oraclizes” them
National Weather Service Hurricane Announcements
Congressional votes
Vehicular systems (e.g., “I see the airbag has deployed”)
Quality of the data matters if contracts are going to
execute immediately
Can combine data sources to improve quality
Inevitable that “reputation scores” will be assigned to
oracles to create an incentive for people to properly
upkeep them 8
10. AID:Tech
Prob. #1: Fraud/waste/abuse/corruption in humanitarian aid
distribution (UN Sec. Gen. Ban Ki-moon estimated 30% lost)
Prob. #2: Need for aid in the first place
Solution: Private blockchain solution (no tokens on exchanges)
Works with UNDP, Red Cross, etc. to distribute aid
Uses plastic cards embedded with QR codes
Donor can select how donation should be divided
e.g., Food: 50% | Healthcare: 30% | Transportation: 20%
Transactions recorded on blockchain to provide transparency
Disclosure at various levels of detail
e.g., “Bought 1 Coke” vs. “Bought beverage”
Image Source: https://en.reset.org/blog/aidtech-distributes-
digital-identities-and-donations-help-blockchain-05092018
Data Source: https://www.un.org/sg/en/content/sg/statement/2012-07-
09/secretary-generals-closing-remarks-high-level-panel-accountability
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12. SolarCoin
Prob.: Externalities (pollution, military intervention, etc.)
not priced into carbon-based energy sources,
slowing adoption of competing zero-carbon sources
Solution: Confirmed solar power production earns
SolarCoins [SLR], which can be sold on
exchanges to supplement revenue.
People can “support” solar power by ensuring SolarCoins
have market value by purchasing them on exchanges.
URL: https://solarcoin.org/en/node/6
Pricing Data: https://coinmarketcap.com/currencies/solarcoin/
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13. SolarCoin
Ex: Solar Panel Array Running on a Raspberry Pi System...
Source: https://www.youtube.com/watch?v=YjMX_zZFFyE
1 MWh Generated 1 Solar Coin [SLR] Received
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14. Grain Chain
Prob.: Fraud in agriculture markets
Stealing farmers’ grain at grain elevators
Replacing farmers’ grain with lower quality grain
Delays in payments to farmers from buyers
Solution: IoT Devices + Smart Contracts + Tokens
Instruments made from off-the-shelf parts
Smart contracts loaded with conditions & [Grainpay] tokens
If grain meets conditions (as measured by instrument), grain
ownership transferred immediately to buyer and payment made
to farmer in Grainpay tokens (backed by USD).
Successful pilot in Northern Mexico & Southern Texas
URL: https://www.grainchain.io
Video: https://www.youtube.com/watch?v=eNfE828ptng
Stolen grain sold
on black market
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15. TE-FOOD
Prob.: Food safety (illness for 1 in 10 people + deaths for
400K, often children) + Overuse of antibiotics
Solution: Farm-to-table food traceability system using
RFIDs and mobile apps
Food traceability solutions market $15.1 billion by 2021
TE-FOOD’s current traceability volume:
12,000 pigs/day + 200,000 chickens/day + 2.5 million eggs/day
3,100 farms + 3,400 livestock agents + 70 slaughterhouses + 35 food
producers + 30 wholesalers + 190 wholesale distributors + 2,600 retailers
6,000 business customers serving 30 million people
URL: https://te-food.com/
Video: https://www.youtube.com/watch?v=qot-VCUgpng 15
18. Summary
AID:Tech SolarCoin Grain Chain TE-FOOD
Token Client-specific
Utility token
(e.g.: 1 Token =
1 Immunization)
Reward token
(1 MWh =
1 Token)
Third-party
Currency token
backed by USD
Utility token
that firms pay for
use of ledger
Reward token
for customers
using app
Available on
Exchanges?
No* Yes Not yet Yes
Smart
Contract?
No** No*** Yes Yes
Extras QR code
embedded
plastic card
Raspberry Pi +
ElectriCChain
Data-logger
Measurement
instrument from
off-the-shelf
parts
QR codes
Mobile App
* Launching Transparency as a Service Token (TAAST) to raise money to scale platform
** Not explicit before announcement of TAAST proposal
*** Rootstock approach achieves smaller energy footprint. If SolarCoin ran at same scale as Bitcoin (30m-50m users),
energy footprint of only $250k-$500k (up to 10,000x improvement over Bitcoin ($3b-$5b) or Ethereum ($1.5b)).
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