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Blockchain applications in the real world

20d0ddc61e80bce04a63680da0160756?s=47 Aletheia
October 15, 2020

Blockchain applications in the real world

An introductory presentation to blockchain

20d0ddc61e80bce04a63680da0160756?s=128

Aletheia

October 15, 2020
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  1. www.neosperience.com | blog.neosperience.com | info@neosperience.com Neosperience Empathy in Technology CFDay:

    Blockchain applications in the real world Nov, 08th 2019
  2. Luca Bianchi Who am I? github.com/aletheia https://it.linkedin.com/in/lucabianchipavia https://speakerdeck.com/aletheia Chief Technology

    Officer @ Neosperience Chief Technology Officer @ WizKey Serverless Meetup and ServerlessDays Italy co-organizer www.bianchiluca.com @bianchiluca
  3. We all know what Blockchain is, right?

  4. of course! Blockchain is…

  5. ✓ Something fancy to earn money ✓ A Buzzword ✓

    A technology to ensure trusted transactions between untrusted actors without intermediaries
  6. What is the Bitcoin? Keep it simple, the way you

    would explain it to my mother
  7. First, it’s not a currency What is Bitcoin (BTC)? It’s

    an exchange medium, subject to high volatility, perfectly defined by demand/offer mechanism Second, it’s not a FIAT money It has some important differences: •decentralized - no Federal Reserve or BCE to control BTC value •no inflaction - the overall number of BTC is fixed (21M) •no reversal - transactions cannot be reversed because become part of the trust • no real economy - BTC value is not constrained to any state economics Third, it does not require a bank Money transfers can be achieved between two peers
  8. You can buy them — trade $ for BTC How

    to obtain Bitcoins (BTC)? Cryptocurrencies can be traded on markets: websites that handle conversions, deposits and retrieval of cryptocurrencies. To be purchased a crypto currency needs to be listed on a given markets. Remember blockchain has never been hacked, but markets can be hacked (and have been).
  9. A BTC account What do you need to trade BTCs?

    Every transaction has a source and a destination which are numeric equivalents to traditional bank account numbers. An user can have one or more addresses (since their creation is as easy as clicking a button) A private/public key pair Each account is paired to a couple of keys. The BTC account is the hash of a public key. To recover and claim ownership of an account, you need the private key counterpart. Remember your keys are the only way an account can be recovered. There is no bank in the middle to guarantee your identity. A Wallet Many addresses can receive/send cryptocurrencies, to safely store key pairs, some tools, named “wallets” have been created. There are many wallets around, some of them are online but not reliable while others are physical and more safe top hold significant amounts of money (hardware wallets, paper wallets)
  10. BTC wallets

  11. None
  12. https://www.gdax.com/trade/BTC-EUR

  13. Will I be rich trading BTC?

  14. You can buy them — trade $ for BTC How

    to obtain Bitcoins (BTC)? Cryptocurrencies can be traded on markets: websites that handle conversions, deposits and retrieval of cryptocurrencies. To be purchased a crypto currency needs to be listed on a given markets. Remember blockchain has never been hacked, but markets can be hacked (and have been). You can mine them… mining... WTF is Bitcoin mining? wait... we have to talk about the Blockchain!
  15. Introducing Blockchain

  16. Blockchain !== Bitcoin

  17. Partial (wrong) definition A definition of Blockchain the blockchain is

    the technology running bitcoin A better definition A blockchain is a distributed database that maintains a continuously-growing list of records called blocks secured from tampering and revision An even better definition The blockchain is a secured protocol enabling peer-to-peer exchanges on a distributed network in a secured, public and non repudiable way.
  18. How does Blockchain work?

  19. None
  20. A digital wallet Components of a simple transaction Originates or

    receives a transaction, in the form of a receipt, are expressed as digital number A Block within the blockchain Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree (an hashed tree). Each block includes the hash of the prior block in the blockchain, linking the two. The linked blocks form a chain. This iterative process confirms the integrity of the previous block, all the way back to the original genesis block. Consensus and proof of work Bitcoin’s blockchain achieves consensus through sequential cryptographic hashing of the transactions and the final ‘proof- of-work’ validation. A cryptographic hash function takes a message (transaction value) and converts it into an alphanumeric value. Hash functions are nearly impossible to invert thus the input value of a hash function can never be determined from its output value. Also, a small change to the input dramatically changes the output. In a blockchain protocol, the header of the latest block is a combined hash value of the set of latest transactions. To this combined hash number is appended a random number called the nonce.
  21. Which problem does the blockchain solve?

  22. An extension to Common Law Trust mechanism Trust Born as

    a fiduciary relation between two parties with a supervisor, it has been extended to almost every transaction that has to bee guaranteed by a third party. It borrows from Common Law the terminology: Settlor - is the part that wants to contribute something to a beneficiary Beneficiary - is the part receiving something from a Settlor Protector - is an optional actor, that guarantees the trusted relation. If there is not a protector, the transaction is untrusted Transactions can be trusted or untrusted • Trusted transactions can be verified • Trusted transactions cannot be reversed once registered • Trusted transactions require a place where are stored, called general ledger • The Protector is a key actor in a trusted transaction (cannot occur without) Duty of a Protector A Protector maintains and guarantees the consistency of the ledger, that is the source of truth. The trust must be within the Protector: a malicious or faulty protector can break the trust.
  23. Peer to peer transaction (untrusted) Untrusted transactions • A good

    is exchanged between two actors • The good end of the transaction relies on both actor consensus about such transaction • Any actor can contest transaction • Even more difficult when extending to n participants
  24. Intermediated transactions (trusted) Trusted transactions • A good is sent

    to the Protector, that stores it, partial transaction recorded into the ledger • The Protector sends the good to Beneficiary, transaction completion recorded into ledger • At any time, ledger can be consulted • Protector trustworthiness is given for granted need a hierarchy of Protectors to transfer trust)
  25. Trust problems examples

  26. Example - Bank Transactions

  27. Real Estate Example - Others Each ownership transaction between a

    seller and a buyer of a real estate is executed by a third party that acts on government behalf to record and execute transfers Democracy When a proposal or a candidate is voted, a third party (a teller at a pool) is required to count and validate votes, then crediting scores to the corresponding competitor. Quality Assurance When a certification is required to establish a statement of quality for a given product or service, an external organization (a certification company) is required to validate quality and provide trust information
  28. Example Bob is looking for a new suite Sally runs

    an online store and sells clothes
  29. Example

  30. Trustiness A protector must be certified itself as trustworthy, because

    it represents the source of truth of the transaction Issues with Protector Scalability A protector is required for each transaction that must occur, moreover some additional effort is needed to guarantee ledger consistency across multiple Cost Since Protector is a key role within a transaction and brings a lot of responsibility (and often bureaucracy) its work has to be payed a considerable amount of money, often proportional to the value of exchanged good Censorship A protector can decide whether a transaction can occur or not
  31. The Byzantine Generals’ Problem

  32. Just put a city on siege A fault tolerance problem

    Each division has its own commander/general who is backed by one or more lieutenants. Generals sends messages to liutenants and to other divisions. A message can be either “attack” or “retire” Coordinated Attack Leading to Victory Uncoordinated Attack Leading to Defeat
  33. What the hell is mining?

  34. Trustiness Proof-of-work Introducing the hash function, which is a mathematical

    function f(x) —> y that: 1. for any length of x it produces always an y of a given length 2. function cannot be inverted (i.e. does not exist a g(y) —> x function) 3. a slightly change of x values produces a significant change of y 4. there is no an x’ ≠ x that has the same y value consider having an x made of a fixed number (obtained to previous block) and a variable number (called nonce), so x = fixed + nonce nonce is a random value, we define a valid POW when nonce value produces a given y that has a value smaller than a given number. Miners try different nonces ‘till they match the required output, once this is done, it represents the POW of the block. Once a POW has been found, the corresponding block is added to the chain. The blockchain adjust the required maximum value of the output y and this is called difficulty. Difficulty is needed to guarantee blockchain reliability and fixed mining throughput.
  35. Ethereum •Forked from main BTC blockchain in 2014 by Vitalik

    Buterin. Eveolves Blockchain introducing Smart Contracts •Contracts are deployed to Ethereum nodes and become part of the blockchain (every contract has an address) •Contracts run are payed with gas (representing computational power) •The unit of coin is called ether •Once a transaction is added to the blockchain, the corresponding contract is executed •Contracts can change ownership, ensure certification, etc.
  36. Smart Contracts

  37. Smart Contracts - an example

  38. Use cases

  39. a decentralised way to express consensus on management topics Decentralized

    Autonomous Organisations •Ethereum Foundation •MakerDAO •voting political proposals in Illinois
  40. Limits of current blockchain…

  41. None
  42. …and how to overcome them

  43. Ethereum Plasma Chain • Allow additional layer over Ethereum •

    Planned for performances • Select PoW, PoS or other • Domain specific chains • High throughput
  44. Ethereum Plasma Chain

  45. ICOs, STOs and others..

  46. Ways of funding your startup

  47. Anything else?

  48. The financial crisis in the last decade has strong connections

    with a lack of transparency
  49. The financial crisis in the last decade has strong connections

    with a lack of transparency this translates into low data portability, asset illiquidity, poor settlement this means lower transfer prices and higher risks
  50. Titolo della chart principale ECB introduces strict regulations on capital

    requirements Credit crunch for companies
  51. structured finance needs a paradigm shift

  52. Evolving structured finance ✓ data portability ✓ automation of processes

    ✓ trust ✓ disintermediation HIGHER TRANSFER PRICE + LOWER RISKS
  53. We need a Wizardous solution able to unlock the Key

    to assets value
  54. We need a ardous solution able to unlock the to

    assets value Wiz Key
  55. WizKey The AI powered Decentralized Cloud for assets securitization DeFiNe

  56. WizKey DeFiNe • team with 40+ years of expertise in

    assets securitization • team with 5+ years of expertise in crypto assets • partnerships with major banks and financial services providers • customer validation achieved during 2019Q3
  57. WizKey DeFiNe • team with 15+ yrs of competency in

    software development • built on Neosperience, the first customer centric AI cloud • team with 5+ yrs expertise in dApps development • built on Ethereum • built on AWS
  58. WizKey DeFiNe WizKey Client Frontend WizKey Architecture

  59. WizKey DeFiNe Securitization Bond issuance Inventory Financing Supply Chain Financing

    Project Financing Factoring
  60. Thank you.

  61. bit.ly/blockchain-20201015

  62. Empathy in Technology

  63. www.neosperience.com | blog.neosperience.com | info@neosperience.com