Paradigm shift: from the bitcoin Blockchain to Networked Computing

Vikram Kumar

Co-founder, Swerl.

July 2015

Paradigm Shiftfrom the bitcoin Blockchain to Networked Computing

Copyright © 2015, Swerl IO ltd. This work is licensed under a Creative Commons Attribution-

NonCommercial-NoDerivatives 4.0 International License.

A bit of Bitcoin History

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STARTED WITH WORK BY DAVID CHAUMBlind Signatures for Untraceable Payments, 1983

Discussions and implementations throughout the 90’s and 2000’s on Cypherpunk mailing list and Financial Cryptography Conferences.

A bit of Bitcoin History

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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO

A bit of Bitcoin History

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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO

Bitcoin: A Peer-to-Peer Electronic Cash SystemJAN 2009: NETWORK CAME INTO EXISTENCE

A bit of Bitcoin History

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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO

Bitcoin: A Peer-to-Peer Electronic Cash SystemJAN 2009: NETWORK CAME INTO EXISTENCE

AUG 2010: ONLY MAJOR SECURITY FLAW

A bit of Bitcoin History

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Bitcoin: A Peer-to-Peer Electronic Cash SystemNOV 2008: BITCOIN PAPER PUBLISHED BY SATOSHI NAKAMOTO

Bitcoin: A Peer-to-Peer Electronic Cash SystemJAN 2009: NETWORK CAME INTO EXISTENCE

AUG 2010: ONLY MAJOR SECURITY FLAW

followed not long after by LitecoinAPR 2011: 1ST ALTCOIN LAUNCHED - NAMECOIN

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Transaction

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Transaction

Input Transaction Name + Index

Input Script

Output Script

#0 #1 #2

#1 #2#0

A Blockchain is Bitcoin’s major architectural contribution

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Bitcoin Transactions

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TRANSACTION

TRANSACTION

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INPUT TRANSACTION NAME+INDEX

SCRIPT SIGNATURE

SEQUENCE NUMBER

LOCK TIME

SCRIPT PUBKEY

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Verification of Transactions

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TRANSACTION

INPUT TRANSACTION NAME+INDEX

INPUT SCRIPT

OUPUT SCRIPT

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#1 #2

INPUT SCRIPT #0

OUTPUT SCRIPT from TXN-X OUTPUT#2

INPUT SCRIPT #1

OUTPUT SCRIPT from TXN-Y OUTPUT#3

INPUT SCRIPT #2

OUTPUT SCRIPT from TXN-Z OUTPUT#0

Transaction Inputs and Outputs contain small executable scripts. When combined and executed in a network node, produce an script 'invalid' or 'valid' answer.

This is the first step in verifying a transaction.

The collection of scripts in a Transaction is often referred to as a Smart Contract.

Blocks in Bitcoin

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A Block contains Verified Transactions and links to a parent Block.

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Blockchain(s)

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A Blockchain does not exist per se peers converge over time to form a consensus view of accepted Blocks. In bitcoin convergence is based on the highest computational difficulty of a Block’s hash-chain.

A Blockchain is a shared transaction log over a network of contributing computing nodes. Essentially it is an authenticated Network Database that grows.

A Blockchain is not limited to currencies or financial systems. It can record any information. bitcoin and units of value (aka. Money) are the first apps.

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Input Transaction Name + Index

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Use Blockchains when

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✤ A log of verified, immutable transactions needs to be created.

✤ Transparency is important. Replication makes it difficult to change history and all transactions can be independently verified.

✤ Lowering the cost to participation is important e.g. no need for a-priori trust or pre-authorisation of participants.

✤ Need to record transactions from Untrusted sources.

✤ Want decentralised or entirely distributed deployment e.g. for resilience and/or transparency.

Many Blockchains Bloom

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bitcoin is the largest Blockchain network but it is not the only one.

bitcoin Extensions: ColoredCoins Pegged Side-Chains

Non-bitcoin: Smart Contracts Make Your Own

Coloured Coins

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Represents and manages arbitrary assets using metadata embedded in the Bitcoin Blockchain.

Uses the Bitcoin network to achieve scale, adoption and robustness.

More information: coloredcoins.org

Pegged Side-chains

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Enables asset representations of new chains to be pegged to bitcoin.

Leverages the distributed trust in bitcoin to enable finer grained representations of specific community value without polluting the larger network with local transactions.

Interoperable with the bitcoin Blockchain in a way that permits rapid innovation of value models.

More information: blockstream.com

Smart-Contract Platforms

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Ethereum allows any addressable user-created script (executable contract) to run as a reactive process within the Ethereum Blockchain.

Completely separate technology and ecosystems to bitcoin.

More information: ethereum.org

Make Your Own

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Everything is open source and therefore can be used to get started.

Two starting points: Bitcoin or Eris Industries’

More information: erisindustries.com/products/erisdb

Non-Monetary Use Cases

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✤ Enabling mechanisms for Distributed File Storage across untrusted peers (Agoric Open Systems)

✤ Title Registries: Land, Shares, basically any property ownership record system.

✤ Naming Systems: Domain Names or any controlled namespace.

✤ Basis for Identity Systems and hence Decentralised Social Networking and [Simple] E-Voting.

✤ Digital Document signature and time-stamping systems. e.g. eDiscovery in judicial systems.

✤ eResearch scientific publication and Information Provenance and Distributed Knowledge generally.

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Input Transaction Name + Index

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Network Computing

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Swerl's focus is Information Provenance and Distributed Knowledge in the Pervasive Computing era.

Using Blockchains to enable secure complex real-time information flows across organisations and untrusted computing elements.

Blockchains for the Internet-of-Things and everything else - true Networked Computing.

track flow re:use re:purpose

National Animal Identification and Tracing NAIT example reconsidered.

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✤ Treat Networks as the Computers made up of calculation and communication

✤ An emphasis on Dataflow, where code is executed by fungible peers across networks.

✤ Bringing the Cloud Computing model of provisioning, deployment and execution to the edge.

✤ Architected as a loose collection of Micro-Services operating in a Service Centric Network.

✤ Forms a complex system. To make it tractable and secure we're making things simple and using a formal basis for everything.

✤ Identity, Privacy, Security and Trust baked in from day one. Not an after thought

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Aspects of Network Computing

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Aspects of Network Computing

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Blockchains are a fundamental abstraction.

✤ Blockchains are emerging from the shadows of bitcoin as a technological step-change.

✤ Simplistically, think of a blockchain as a shared transaction-oriented database in the network. A Networked Database.

✤ Many possible use cases where Networked Information assurance is a must.

✤ Swerl’s Networked Computing uses Blockchains as a key architectural abstraction.

Summary

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Questions /Comments

Vikram Kumar Co-founder, Swerl

email: vikram.kumar@swerl.iotwitter: @vikram_nz

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Copyright © 2015, Swerl IO ltd. This work is licensed under a Creative Commons Attribution-

NonCommercial-NoDerivatives 4.0 International License.

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