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ComPVter Blockchain

20d0ddc61e80bce04a63680da0160756?s=47 Aletheia
April 17, 2018

ComPVter Blockchain

20d0ddc61e80bce04a63680da0160756?s=128

Aletheia

April 17, 2018
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  1. www.neosperience.com | blog.neosperience.com | info@neosperience.com April 2018 Neosperience. Empathy in

    Technology Blockchain, Cryptocurrencies and Smart Contracts: is our world gonna change (again)?
  2. First of all..

  3. aka don’t blame me if you loose your money Safe

    Harbor Statement Our discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward- looking statements in light of new information or future events. Throughout today’s discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading “Risk Factors.”
  4. Luca Bianchi Who am I? • Chief Technology Officer @

    Neosperience • Working on a lot of bleeding edge technologies • Passionate developer: love writing code, hate meetings Neosperience Understand, engage, and delight customers, using psychographics to deliver relevant experiences that drive loyalty and increase value across the entire customer journey.
  5. Agenda • Bitcoin and Cryptocurrencies • Trading cryptocurrencies • Blockchain

    • Blockchain v2 • Smart contracts • Blockchain v3 • ICOs
  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 A mistery built into the currency It has some important differences: BTC creator is unknown, she/he used the pseudonym of Satoshi Nakamoto and is a virtual identity that published the first implementation of blockchain. • 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
  8. Bitcoin explained

  9. Back to the Bitcoin Not so simple anymore

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

    can I obtain bitcoins? 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).
  11. 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)
  12. BTC wallets

  13. BTC wallets

  14. https://www.gdax.com/trade/BTC-EUR

  15. • BTC value ranged to hundreds of $ to tens

    of thousands $ in just few months • Volatility is still a pain in the ass of investors • Consider investing carefully and a small amount before having understood how it works • Be prepared to risk Will I be rich trading Bitcoins? Probably the answer is no
  16. What about other cryptocurrencies?

  17. Ethereum growth - 1 year

  18. Ethereum growth - 1 month

  19. Ethereum growth - 1 day

  20. Many others currencies.. you can choose one of 1574 cryptocurrencies…

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

    can I obtain bitcoins? 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 The process of transaction validation and proof of concept generation is called “Bitcoin mining”. Let’s have a deeper look… mining… WTF is Bitcoin mining? wait… we have to talk about the Blockchain!
  22. Introducing the Blockchain

  23. Blockchain ≠ Bitcoin

  24. Partial definition A definition of Blockchain… The blockchain is the

    technology running the bitcoin from Wikipedia A better definition A blockchain is a distributed database that maintains a continuously-growing list of records called blocks secured from tampering and revision The blockchain is a secured protocol enabling peer-to-peer exchanges on a distributed network in a secured, public and non repudiable way.
  25. None
  26. Which problem solves the Blockchain?

  27. 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 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. 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)
  28. Untrusted transaction (Peer to Peer) Settlor Beneficiary Peer to peer

    transaction (untrusted) good to be exchanged • 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
  29. Trusted transaction Settlor Beneficiary Intermediated transaction (trusted) Protector • 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)
  30. Examples of trust problems

  31. Examples - Bank Transactions

  32. Examples - Others Real Estate 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
  33. An example

  34. An example

  35. Issues with Protector Trustiness A protector must be certified itself

    as trustworthy, because it represents the source of truth of the transaction Scalability A protector is required for each transaction that must occur, moreover some additional effort is needed to guarantee ledger consistency across multiple transactions of the same good 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 Would be a peer-to-peer trusted transaction possible?
  36. Blockchain technology solves The Byzantine Generals’ Problem

  37. 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 litenants and to other divisions. A message can be either “attack” or “retire”
  38. Blockchain to the rescue

  39. How is Blockchain related to BTC?

  40. Blockchain is a technology For transactions Every block added to

    the blockchain contains a reference to the previous block and is added to ensure a transaction Maintains a distributed ledger Blockchain transactions are stored inside blocks of the chain and sent to every full node of the blockchain Mining ensures no malicious block is added Mining process is a core process of any blockchain because it relies on consensus and proof-of-work (POW) to ensure that transactions are trustworthy even if there is no middleman (protector) to control / ensure the transaction
  41. What the hell is mining?

  42. None
  43. many tried to hack the chain How secure are BTC

    transactions? Blockchain has been tested in many ways, trying to hack the POW and insert fake blocks (i.e. fake transactions) into the chain, but the huge number of miners act as a guarantee because of the byzantine general’s problem solved by blockchain every full node miners
  44. many tried to hack the chain How secure are BTC

    transactions? Blockchain has been tested in many ways, trying to hack the POW and insert fake blocks (i.e. fake transactions) into the chain, but the huge number of miners act as a guarantee because of the byzantine general’s problem solved by blockchain every full node miners as secure as mining can be Mining process must be difficult to ensure there won’t be a full node capable of mining a whole block on its own. Mining means producing the proof-of-work (POW) given a block.
  45. Proof-of-Work here math again.. 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.
  46. Proof-of-Stake here math again.. 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.
  47. Blockchain evolution

  48. Can handle just receipts Limit of the first version of

    Blockchain The basic nature of blockchain can store within a block just the receipt of a given number of transactions, their timestamp, the hash pointing to the previous transaction and whatever is needed to build a PoW No logic can be leveraged on consensus Blockchain ensures trust, but any correlation between this trust and its applications must be done on untrusted channels (i.e. third party websites) thus creating some really dangerous security concerns. Blockchain v1 is good only for cryptocurrencies Even if the work of Satoshi Nakamoto shaped the future of distributed transactions, his implementation lacked the mechanism to secure them within the blockchain.
  49. Built on the same ground of Blockchain Blockchain v2 The

    structure of the ethereum blockchain is very similar to bitcoin's, in that it is a shared record of the entire transaction history. Every node on the network stores a copy of this history. but on steroids The big difference with blockchain v2 is that its nodes store the most recent state of each smart contract, in addition to all of the ether transactions. (This is much more complicated than described, but the text below should help you get your feet wet.) Ethereum is the blockchain v2 standard fork Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.
  50. 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.
  51. Smart contracts

  52. Smart contracts - Example

  53. Use cases

  54. Use cases

  55. Use cases

  56. Built for developers Solidity - a language for smart contracts

    Solidity is a contract-oriented, high-level language for implementing smart contracts. It was influenced by C++, Python and JavaScript and is designed to target the Ethereum Virtual Machine (EVM). Designed as an OOP language A contract in the sense of Solidity is a collection of code (its functions) and data (its state) that resides at a specific address on the Ethereum blockchain. Solidity is statically typed, supports inheritance, libraries and complex user-defined types among other features. Contracts in Solidity are similar to classes in object-oriented languages. Each contract can contain declarations of State Variables, Functions, Function Modifiers, Events, Struct Types and Enum Types. Furthermore, contracts can inherit from other contracts.
  57. Use case: Decentralized Autonomous Organization

  58. Blockchain v3 Not your grandmother blockchain

  59. Chain specific Limit of the current version of Blockchain Each

    transaction within a blockchain is specific to its chain. There aren’t safe option to translate receipts from one to another in a robust and secure way. The only conversions are made by markets (and impact only on currencies) Globally distributed Consensus validation through PoC is done locally within a consensus pool, but blockchain update require to broadcast every change to other nodes, with a considerable overhead. There is no chain partition. Performances Current blockchains performs up to 20 transactions per second, becoming unsuitable for a range of applications.
  60. About performances Network Speed Fees Bitcoin 3 t/s avg congestion:

    ~10$ Ethereum 20 t/s avg congestion: ~ 0.8$ VISA 1700 t/s 1.4% - 2.4% transaction fee Facebook > 1000000 t/s Free
  61. Is something better even possible?

  62. Improve performances (Q3 2018) Transaction speed > 1.000.000 t/s Cost

    per transaction: 0,0001$
  63. Some specific applications

  64. IoT, Supply Chain, Product Tracking https://www.iota.org https://www.vechain.com https://blockv.io

  65. Distributed Web/Computing https://substratum.net/tag/ blockchain/ https://sonm.com https://aelf.io Q2 2018 Q3 2018

    ?? 2018
  66. Other blockchains https://coinlist.co/filecoin https://www.propsproject.com https://coti.io decentralized file storage/sharing decentralized video

    ecosystem digital currencies https://www.arcona.io/ https://vaultbank.io https://z.cash augmented reality bank private transactions
  67. Third generation blockchains (multi-tiered) https://aion.network https://icon.foundation

  68. None
  69. Recap

  70. Speculation, speculation, speculation Blockchains and Cryptocurrencies Be aware of this

    market volatility, be savy, don’t waste your money. Prefer long-term commitment to begin, scale up with time and head to in-day trading in no less than six months. Start with BTC or ETH. Regulation is coming BTC <—> FIAT conversion is handled by markets that don’t have a jurisdiction. Regulators would prevent market instability due to high volume in cryptocurrencies transactions. Banks have a problem Blockchain applications can overcome retail banks simply making them unnecessary to intermediate transactions. Banks cannot adopt blockchain in a reasonable amount of time due to innovative technologies involved.
  71. e-Government SmartContracts and Decentralized applications SmartContracs built by a government

    could ensure a huge reduction in costs, litigation and improve quality of bureaucracy for good. Democracy and voting processes could be affected too. Removing the main-in-the-middle Every time there is something that does intermediation, smart contracts on blockchain can remove a lot of friction and reduce costs. Trust management is a topic that can really shape the future of transactions, retail, purchases and payments. Serverless? Decentralized applications are truly serverless to their core, since there are no servers at all. Can be the next shift in paradigm.
  72. Something huge is coming Conclusions Blockchain and decentralized trust open

    a lot of possibility for improvements of consolidated processes that are the foundation of any modern state. but there is no a clear winner Applications range from shared computing power to AI, to e-Gov, to retail or payments. The next few years will see a lots of attempts and failures
  73. Initial Coin Offering

  74. What is an ICO? Initial Coin Offers An Initial Coin

    Offering, also commonly referred to as an ICO, is a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether. It’s somewhat similar to an Initial Public Offering (IPO) in which investors purchase shares of a company. ICOs are a relatively new phenomenon but have quickly become a dominant topic of discussion within the blockchain community. Many view ICO projects as unregulated securities that allow founders to raise an unjustified amount of capital, while others argue it is an innovation in the traditional venture-funding model. Are they a safe bet? It depends on the reputation that you can gain through company description. Can be high risk, high reward investments.
  75. References Links • https://medium.com/@DebrajG/how-the-byzantine-general-sacked-the-castle-a-look-into- blockchain-370fe637502c • https://hackernoon.com/an-overview-of-cryptocurrency-consensus-algorithms-9d744289378f • https://medium.com/@WWWillems/how-to-set-up-a-private-ethereum-testnet-blockchain- using-geth-and-homebrew-1106a27e8e1e

    • https://hackernoon.com/learn-blockchains-by-building-one-117428612f46 Events ComPVter meets the Blockchain — save the date: May, 31st 14:30
  76. www.neosperience.com | blog.neosperience.com | info@neosperience.com !76