INTRODUCTION BLOCKCHAIN TECHNOLOGIES Nyenrode | Breukelen, 28 March 2017 | M. Oskar van Deventer
INTRODUCTION BLOCKCHAIN
TECHNOLOGIESNyenrode | Breukelen, 28 March 2017 | M. Oskar van Deventer
BLOCKCHAIN RAISES MANY QUESTIONS
What is this "blockchain" stuff that everybody is talking about?Concrete examples of use, financial, voting, otherWho guarantees the correct operation and security of the system?Legal aspects, risks, uncontrollability, opposition by "middle man"
What does blockchain mean for my business?What are blockchain applications for my business?How does it make my business better, faster, cheaper, …?How can I use blockchain against my competitors?
Where do I start with my blockchain use case?What are my first steps?Which parties or suppliers should I contact?
28 March 20172 | Introduction Blockchain Technologies
??
CONTENTS
A practical definition of Blockchain
Technology: a blockchain is like a computer
Ecosystem: a blockchain is like a party
Technologies and technology instances
3 | Introduction Blockchain Technologies
" "" "
28 March 2017
A PRACTICAL DEFINITION OF BLOCKCHAIN *
* David Siegel, https://medium.com/startup-grind/what-is-this-blockchain-thing-a5d2abb99297
20 March 20174 | Towards viable blockchain ecosystems
“A blockchain is a shared ledger that everyone trusts to be
accurate forever”
CATEGORIES OF BLOCKCHAIN USE *
Store valueCurrency, ownership, tokens
Exchange valueTrade currency, ownership, tokens
Store permanent recordsProvenance, registry, identity
Execute programsAdd business logic to the above
* David Siegel, https://medium.com/startup-grind/what-is-this-blockchain-thing-a5d2abb99297
20 March 20175 | Towards viable blockchain ecosystems
A BLOCKCHAIN IS LIKE A COMPUTER
Real-world computer
Wor
d-pr
oces
sing
app
licat
ion
Em
ail g
app
licat
ion
Bro
wse
r ap
plic
atio
n
Blockchain computer
Dia
mon
d-tr
ade
appl
icat
ion
Sup
ply-
chai
n ap
plic
atio
n
Iden
tity
appl
icat
ion
Real-worldcomputer
Real-worldcomputer
Real-worldcomputer
Consensus protocol achieves consensus about the state of a
blockchain computer
ApplicationsOperating system
Hardware
6 | Introduction Blockchain Technologies 28 March 2017
7 | Introduction Blockchain Technologies
blockchain
Cryptographically linked in a chain-like fashion (using hash functions)
Collection of modifications of the ‘shared truth’ *.
* e.g. a shared transaction ledger or a shared virtual-computer state
…Prev: H( )Transactions: H( )…
…Prev: H( )Transactions: H( )…
…Prev: H( )Transactions: H( )…
Block header
Block content(transactions)
28 March 2017
PRIVATE/PUBLIC, PERMISSIONED/UNPERMISIONED
8 | Introduction Blockchain Technologies
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf
28 March 2017
BLOCKCHAIN FEATURES & CHALLENGES
9 | Introduction Blockchain Technologies
Consensus Speed
Privacy
Security
Sustainable
Features Challenges
Validity
Uniqueness
Immutability
Authentication Cost
A blockchain computer is
Highly reliable
But also …
SlowMemory limitedExpensive
28 March 2017
A BLOCKCHAIN IS LIKE A PARTY
Somebody has to take the initiativeInvite friends to help you with the organisation
Make decisions togetherWho arranges what?How are things paid?Outsource food or location?Whom to invite? Open, closed?How do we decide on things?
Execute the plan and start the partyInvitations, publicity, changes…more work ☺☺
10 | Introduction Blockchain Technologies 28 March 2017
EXAMPLE USE CASE: PAY PER CONTENT ITEM
More and more people create content items independentlyProfessional, semi-professional, amateur, …Video, blog, column, article, photo, app, …
Much money and power goes to the "middle man"Broadcasters, VoD services, magazines, newspapers, websites, …
"Could we have a marketplace where independents could sell their content directly to consumers?"
"How do we prevent that our new marketplace turns into an expensive and powerful middle man"
11 | Introduction Blockchain Technologies 28 March 2017
OK. LET'S START THE PARTY PLANNING
Who shall I involve in planning my "pay-per-content-item" party?What will our system look like to users, mock-ups, proof-of-concept?How do we decide on the functionality of the system? Governance?Who invests in what aspect of the system? Business models?Make, buy, open source?What will be our legal status?(Note: a cartel on a blockchain is still a cartel)On what (blockchain?) infrastructure will we run our system?(Our own? A third-party one?)PoC � pilot � alpha � beta � operational � …… more work ☺☺
12 | Introduction Blockchain Technologies
E.g. Techruption Blockchain Acceleration28 March 2017
TECHNOLOGIES AND TECHNOLOGY INSTANCES
13 | Introduction Blockchain Technologies
Transactional Data-oriented Smart contracts Swiss Army Knife
Value transferon the blockchain
Databaseon the blockchain
Computingon the blockchain
Assemble your own blockchain
BitcoinRipple…
BigchainDBMultichain…
EthereumEris/Monax…
Hyperledgervarious BaaS…
*Thanks to Karim Grini of Accenture for providing this classification
28 March 2017
BITCOIN
Cryptocurrency for value transfer & value storagePermissionless: proof-of-work, "mining"Single main instance, several clones and variants (altcoins)Business models
Validators ("miners") get awarded mining & transaction feesBitcoin Foundation went bankrupt, developers now sponsored by MITExchanges, merchants and consumers each have their own business modelsVarious business models for wallet software & services
GovernanceOpen source; two or three persons have keys to bitcoin core softwareReddit discussions, anarchistic civil wars, censorship, DDoS, personal threatsVoting about Bitcoin Improvement Proposals via mined blocks
14 | Introduction Blockchain Technologies 28 March 2017
ETHEREUM
Emulating a world computer ("skynet")Permissionless: proof-of-work, "mining", ambition to switch to proof-of-stateSingle main instanceBusiness models
Similar to bitcoinGovernance
Open source, centred around Vitalik ButerinEthereum Foundation, executive director, steering board, advisory boardLots of "hard forking" (=non-backward-compatible patching)
15 | Introduction Blockchain Technologies 28 March 2017
RIPPLE
Value transfer of real-world assetsPermissioned, single instance
Validators are named parties, validatorship is announced via press releaseTrusted gateways (e.g. banks) issue euros, dollars, gold, silver and bitcoins on the Ripple chain
Business modelsDeveloper Ripple Labs sells its "shares" in the form of XRP cryptocurrencyGateways and exchanges charge feesSystem integrators to integrate Ripple in bank back-endsUnclear how validators get rewarded
GovernanceCentral company Ripple LabsVoting about new features and fee changes using Ripple consensus mechanism
16 | Introduction Blockchain Technologies 28 March 2017
BIGCHAINDB
Database for create-read-update-delete of entriesPermissioned, no single central instance
Voting-based consensus algorithmBusiness models
No cryptocurrencyLike any distributed database: each instance would have its own owners and business model
GovernanceOpen source, led and decided by BigChainDB companyEach instance would have its own owners and business model
17 | Introduction Blockchain Technologies 28 March 2017
HYPERLEDGER FABRIC
Modular set-up for DIY blockchains, "blockchains for business"No single central instance Permissioned or permissionless, decided per instance
Voting-based consensus algorithmBusiness models
Different per instanceSystem integration and customer projects
GovernanceFormal Hyperledger consortium, initiated by IBMMix of standards body (requirements & architecture working groups) and open source community
18 | Introduction Blockchain Technologies 28 March 2017
IN CONCLUSION
MetaphorsBlockchain is like a computerBlockchain is like a party
Different blockchain technologiesPublic – privatePermissioned – permissionlessValue-transfer – database – computer – Swiss army knifeSingle instance – many instances
Governance and business modelsOf a blockchain technology � almost always open sourceOf a blockchain infrastructure instance � varies: company, group, mining, fees, integration, …Of a blockchain application � varies: per sector, per application, …
19 | Introduction Blockchain Technologies 28 March 2017
28 March 201720 | Introduction Blockchain Technologies
LET US HAVE A GREAT BLOCKCHAIN PARTY!