Blockchain for industry 4.0 HMI 2018

©Mark Mueller-Eberstein & Adgetec Corporation
Mark Mueller-Eberstein
• Connecting business leaders and the IT for 2 decades. Investor, keynote speaker,
best-selling author in 12 languages, Digital Transformation leader for Blockchain,
Crypto currencies, IoT, AI and cloud computing. Former leadership positions in HP
and Microsoft.
• Mark Mueller-Eberstein is one of the world’s leading experts on how
businesses can leverage key technology trends, transform organizations and to
drive a competitive advantage. He is focusing for many years deeply on the
potential of Blockchain including and beyond crypto currency technologies as
investment and economic structure transformer and lead the discussions e.g. at
#FIF2017 with CEOs of the largest financial institutions. Mark is an internationally
renowned business leader, entrepreneur, investor, best-selling author, and
shares his insights frequently through executive level engagements as well as broad
global events like TEDx, Inbound, Rutgers’ Business School and even Coursera.org
(Business Leadership courses for Blockchain, AI, VR/AR, IoT, Digital Transformation).
Mark deeply appreciates working with international organizations like the Shenzhen
(China) based Qianhai Institute for Innovation Research (QIIR) and APEC (Peru 2016
summit) and is a member of the “Washington State IoT and the Blockchain
Council” advising the Governor and state legislators.
• Mark is the founder of the Adgetec Corporation’s consulting business since 2010
and guiding many entrepreneurs in advisory positions and as their investor.
1

Can blockchain technology be the answer
to IoT and AI security for Industry 4.0?
INDUSTRIAL SECURITY FORUM - THE SECURE PATH OF
THE DIGITAL FUTURE
Rutgers University
Founder and CEO of Adgetec Corporation
@MarkMEberstein
WeChat: MarkMEberstein

#INBOUND17
Who knows
somebody
who owns
Bitcoin?

POLL
What do you KNOW about Blockchain Technology?
a) Nothing. Are there LEGOs involved?
b) I think it has something to do with Bitcoin
c) My tech people want to talk with me about it
d) We are fully implementing distributed ledgers and leveraging public
blockchains
e) “I am Satoshi Nakamoto”
4

Blockchain technology… its about….
•TRUST
•Data
management
and exchange
5

IoT and AI
combination
for
Consumers:
Amazon Alexa
6

Global center
for AI is….
Seattle ?
7

Seattle, Washington USA as AI development
center?
•Home of Microsoft and Amazon
•Large development centers by Google, Facebook
•University of Washington in top 15 research
universities
•Tsinghua University (from Beijing) opens Computer
Science faculty
•Alibaba and Baidu open cloud computing and AI
research center
8

And we have
Blockchain tech, too:
➢Dragonchain (originally from
Disney)
➢Rchain
➢Bitrex
➢Microsoft (Coco on Azure)
➢Amazon (on AWS)
➢Bloccelerate
➢…… and many more ….
9

©Mark Mueller-Eberstein & Adgetec Corporation 10
"Internet of Things“ (IoT) – the
foundation for Industry 4.0 is
growing exponentially
… and everybody tries to play….

IoT: Connecting People, Communities and Things
Many Things
Many People
with
Many devices
Lots of
Data
Lots of
Cloud Services
???
Lots of Insights
???
IoT: Lots of players, technologies, services

Modern Day Gold Rush: IoT, IIoT and Industry 4.0
• 55% say IoT is strategic to their business as a means to compete more
effectively. 21% regard it as “transformative”—they know it holds
promise and are looking for the right investment, says IDC*
 The survey was conducted in July and August 2016, with 4,500 decision-makers
from more than 25 countries participating, from enterprises with more than 100
employees in a wide range of industries.
• IoT devices in 2016: between Gartner’s estimate of 6.4 billion (which
doesn’t include smartphones, tablets, and computers) and International
Data Corporation’s estimate of 9 billion.**
• IoT is moving beyond pre-defined workflows, control scripts, and
operating procedures
• * Forbes, 2016
• ** IEEE, 2016

Growth of IoT
• Analysts are predicting for the IoT market:
 IHS forecasts: IoT market will grow from an installed base of 15.4
billion devices in 2015 to 30.7 billion devices in 2020 and 75.4 billion
in 2025
 Gartner, Inc. forecasts that 8.4 billion connected things will be in use
worldwide in 2017, up 31 percent from 2016, and will reach 20.4 billion by
2020. Total spending on endpoints and services will reach almost $2
trillion in 2017.
13

IoT spending: it is the IIoT first
investments and patterns per
industry and cross-industry
In IDC’s IoT spending forecasts, released on January 4th
2017, the research firms also has data on the top three
industries in IoT spending for the past year:
1. IoT spending in manufacturing accounted for $178
billion in 2016.
2. IoT spending in transportation ranked second in
2016 with $78 billion.
3. IoT spending in utilities ranked third in 2016,
accounting for $69 billion.
• Consumer IoT spend: on the fourth spot
14

• The internet of things is like the mobile computing and
communication revolution also accelerating some of the
other technologies
• The rapid IoT adoption by businesses and consumers is
generating data, that allow Big Data and Artificial
intelligence applications to generate new insights.
• Managing and securing IoT devices and their
generated data is a challenge that Blockchain
Technology might be a good answer for.
15

IoT and big data
• The term “Big Data” is an understatement for the amount of
data IoT devices will produce.
• According to the Ericsson Mobility Report, IoT devices and
sensors will exceed mobile phones as the largest category of
connected devices in 2018 and generate a staggering 400
zettabytes of data per year.
16

IoT and Artificial Intelligence
• With IoT: AI can help companies take
the billions of data points they have and
boil them down to what’s really
meaningful.
• Review and analyzes the data: find
patterns or similarities that can be
learned from so that better decisions
can be made.
• Machine-learning cloud services and
Artificial Intelligence will be put to use
to mine the data that would be coming
in from IoT devices.

Combining AI with other key
technologies like IoT and
Blockchain is especially
powerful
18

Blockchain benefits:
Blockchain are designed to move data from a to b in a very secure
way
Logistics:
• optimizing data exchange between different data silos
Digital supply chain: dev ops: shorter time, higher quality, increased
productivity
• Financial recording: audits by pushing button vs bringing in
auditors
19

IoT and Blockchain Will Converge
• Blockchain is more than a concept now and has applications in many
verticals besides FinTech including IoT.
• Blockchain technology is considered by many experts as the missing
link to settle scalability, privacy, and reliability concerns in the Internet
of Things.
• Blockchain technology can be used in tracking billions of connected devices,
enable the processing of transactions and coordination between devices;
allow for significant savings to IoT industry manufacturers.
• This decentralized approach would eliminate single points of failure, creating
a more resilient ecosystem for devices to run on.
• The cryptographic algorithms used by Blockchain would make consumer
data more private.
• IoT will converge with Blockchain for better security and privacy opening the
door for a new category in applications, hardware, and talents.
20

Blockchain for good
• Increase efficiency
• Lower cost
• Compliance
• Less graft
• Increased scrutiny of supply chain
• Digital identities (employees, refugees,... devices )
21

Lets look at a few
scenarios
22

• Supply chain project for lumber chain from forest over manufacturer to shop
in NYC Insurance for flight delays (pays out automatically when delay
happens)
• Blockchain audit trail for auctioning of by public governments “sweep the
shadows of mistrust from the corridors of government”
• Land registry: republic of Georgia ; property gets its own hash; business
process down to 10 minutes from 3 days
• Coca Cola: protect workers in supply chain; collaboration with US
government; no change of labor or contracts
23

Global
organization
with lots of
different
business units,
secure IoT and
logistics needs

Even Disney does
(their own, open
source)
Blockchain

Walmart Food Safety Collaboration Center
• The Walmart Food Safety Collaboration Center in Beijing, China
launched in 2016.
• Five-year, $30 million project that seeks to improve the overall food
supply chain through innovation, collaboration, and education.
• As part of this effort, the Walmart Foundation is funding a $4.5 million project
led by the Massachusetts Institutes of Technology to deploy advanced
predictive analytics and machine learning to mitigate the risk of food
adulteration and fraud in China.
• With blockchain, food products can be digitally tracked from an
ecosystem of suppliers to store shelves and ultimately to consumers.
• Blockchain technology has the potential to provide this level of
traceability as part of a digitized food system. It can also take us beyond
traceability to transparency, where we have a complete and
interconnected view of the supply chain.
• Combining this “Big Data” with AI: “Will lead to new insights that can
further improve supply chain efficiencies, promote sustainability, and reduce
food waste.”
26

According to Gartner, a
quarter of enterprise data
hacks will involve IoT.
27

Robbing a casino
through the Aquarium?
• Nicole Eagan, the CEO of cybersecurity company
Darktrace: “cybercriminals hacked an unnamed
casino through its Internet-connected
thermometer in an aquarium in the lobby of
the casino”
Hackers exploited a vulnerability in the
thermostat to get a foothold in the network.
They managed to access the high-roller database
of gamblers and "then pulled it back across the
network, out the thermostat, and up to the
cloud.“
• “undisclosed damages”
28

Blockchain Technology
The Next Radical Internet
Transformation:
How Blockchain Technology is
transforming Business, Governments,
Computing and Security models

In the early 1990s…
We were discussing if the internet will impact
mail service organizations
Nobody thought about shopping, entertainment
or finance

Never seen anything developing this fast
across so many scenarios.
• I do this with dozens of people for 4+ years DEEPLY and learn much
(surprisingly new stuff) every day
• Much of what is published every day is factually wrong and / or outdated
31

Foundations
• Blockchain is a software technology
• There is not one single blockchain
• Usage scenarios of Blockchain technology my look very different from each other
• Blockchain technology is not Bitcoin
(but it was invented for the “Bitcoin token”)
• Blockchain Technology is NOT limited to financial transactions.
• Almost anything can be “tokenized”
32

What does a blockchain do….?

Blockchain Technology Solves the problem of
transfer of value between internet users
without having to rely on a third party.

Changing value transfer over the internet
Conventional Transaction: A central intermediary (usually a bank or PayPal) verifies and
validates the transaction (and manages the ledger / database)
35
Blockchain Transaction: The blockchain network and the cryptographic technologies verify
and validate the transaction. No central intermediary is required. The blockchain (and the
network’s “value”!) resides with the market participants.

The “technical stuff”…

Networking….
Old school
computing and
business
Changed computing and business
over the last 20 years
Mark Mueller-Eberstein & Adgetec Corporation

Central
Control
=
Central Point
of Failure
Resilience and independence with
distributed ledgers and systems

Central
Control
=
Central Point
of Failure
• Blockchain Technologies use a “Peer-to-Peer (P2P) network”
• Each party to the network represents a “node” and all nodes communicate with each other.
• Usually: The larger the network and the more nodes within the network, the more stable and secure
• The P2P network can be public (open) or private (closed)
• Identity of parties can be protected
• Transactions can be visible / transparent

Benefits of Blockchain secured
distributed leger vs. central ledger
• Information can be put on block chain and can
never be changed
• Full transparency for every transaction
• "Record every information forever“
➢ Worldwide ledger: IP, land titles, art,...

Why does this matter?
1. Eliminates the need for third party moderator / intermediary
2. Creates on (very secure) Golden Record
3. Can eliminate back office and intermediary functions
4. Can be paired with other smart technologies (think IoT, AI, SCM, ERP,…) to
enable coordinated record keeping that would otherwise be logistically
difficult or impossible.
42

Tokens or Coins
• Tokens or coins are digital assets intended to convey value akin to
offline currency, and can represent anything from loyalty points to
vouchers and IOUs to actual objects in the physical world such as
a deed or title.
• A token or a coin is a digital representation of a right to
participate in a network. It cannot be duplicated, forged, or
created out of thin air by a central authority because it’s running
on a blockchain and its rules are backed by immutable code.
• A Bitcoin, for example, represents your right to access and
participate in the Bitcoin network protocol.

Three Types of Coins
Ideas Paradigm Other Examples
“Coins” 1. Currencies Bitcoin (BTC) LiteCoin (LTC), DASH, Bitcoin Cash (BCH),
RaiBlocks (XRB), Monero, Zcash,…..
2. Platforms Ethereum (ETH) NEO, Cardano (ADA), Dragonchain (DRGN),…
3. Tokens Ripple (XRP) Sia Coin (SC), OmiseGo (OMG), Golem (GNT),
IOTA (MIOTA)
“Cryptosecurities” 4. Securities BitDice (CSNO) …

Blockchain Technology: Peer-to-peer network, secured by cryptography and e.g. proof-of-work or proof-of-stake
Mark Mueller-Eberstein & Adgetec
Corporation
Blockchains: Public / Open “Private” Government
Some
Blockchains:
Some
Crypto
Currencies:

Blockchain Tech beyond currency and
financial industry…
… Think any kind of transaction and
related services…

… for example….
• Records of estates (e.g. Georgia land registry)
• Records of shares
• Identification
• Authentication
• Any financial transaction
• Voting
• Domain control (DNS)
• Central Trust (“Escrow”) for any kind of deals
• Messaging (“signed and unchangeable”)
• IP management
• Used as Donation platform
•
• CONSIDER: Transparency not always good!
• E.g. donations for LGBT organizations visible to government of
Uganda...
• …

Billions have no….
- Birth records
- Identification documents
- Land and other property titles
- Professional references
-…..
48

Identification for everybody
• Technologies from leveraging the phone SIM to biometric can help creating
economic access for people outside the Western world.
• Companies like lifeID do offer KYC compliant blockchain based solutions,
where every human can create an identity, which would allow them to
transact with anyone else in the world using the internet.
• With secure identities, individuals now can bank or participate in commerce
with institutions they would otherwise not have access to.
• And again.. It is about so much more than just banking...
“Identity” allows to claim property, authenticate....
49

The next level of blockchain technology enabled
innovations are a mix of economics, social
organization and software development.
The emergence of “economic design patterns”:
We see key economic constructs that appear in decentralized applications,
similar to software design patterns
➢Electricity = energy over the wire.
➢Telephone = communication over the wire.
➢Blockchain = consensus over the wire.
50

Smart contracts and Ethereum
• When discussing Blockchain technology, now
often the term “Smart Contracts” is used.
• Smartcontracts are programs for business logic
(more than just contracts)
• Today these are often Very simple automated
transactions.
(Think vending machine as “Smart contract
example”.
• User select product, transfers value (aka inserts
cash)
• But the potential is nearly endless.

Where Blockchain technology is uniquely positioned
to enabled innovations:
• Platforms like Ethereum: We start to see synergies between decentralized
applications
Contracts calling other contracts ~= copy/paste, imbedding and inter-/hyper
linking (OLE).
• Ethereum (and maybe NEO or Dragonchain)= an operating system for consensus and
social organization.
• The forgotten killer application of crypto currencies - confiscation resistance
(if handled correctly). Goes hand in hand with inflation resistance.
• Blockchain technology allows Trust in a trustless environment.
With Zero knowledge proofs and then ZK-snarks and their applications we
can create even further business and transaction scenarios.
52

Some things
never change….
When there is
money… some people
try to steal it…

Protection
is key!

Money evolves… and so do the threats

Security starts at data
collection and needs to be
managed end to end
56

Solutions needed
WHY?
Know-How
(people,
process, tech
capabilities,..)
WHAT?
Technology
SQL: 50%
consulting
ERP / CRM:
80%
consulting
“Internet” /
Blockchain:
95% consulting
Office
Suite: 1%
consulting

Explain the benefits of tech for their business!
Reject 90% of Blockchain
proposals, because other
tech works better
59

Best practice for enterprises:
• Partnerships are key to learn and implement quickly
• Competition vs cooperation: no incentive to share tech and cost savings with
“freeloaders” (especially in very competitive industries like shipping)
• Publicly and broad alliances vs. private clubs/Consortium
60

The Blockchain revolution is here.
 Your Opportunity!
➢ Change will be fundamental on business,
technology, processes, structures and people
➢ Technology & customer oriented leaders are
positioned to drive and realize the vision and
image of the future
➢ Personally, I believe bringing Billions into the
economic system is an opportunity and our
responsibility

Adgetec:
YOUR advantage is our
mission
“high value and impact consulting”
62

THANK YOU!
 MarkME@adgetec.com
 Twitter: MarkMEberstein
 US +1 855.423.4383
Investor, CEO of Adgetec Corporation
Bestselling Author
WeChat: MarkMEberstein

“The first internet era was predicated
on the availability of information and
content anywhere in the world and at
any time.
Now the second era, fueled by
blockchain technology, is ushering in
what is known as the Internet of
Value, featuring a revolutionary
distributed platform poised to reshape
and advance the global business
environment and world order.”
Don Tapscotts, 2017

Blockchain for industry 4.0 HMI 2018

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