Blockchain Awareness

This presentation aimed to demystify the Blockchain paradigm during the "Smart Data Circle" back when I was working for the Data Innovation Lab of AXA.

Transcript

1. 1 INTERNAL 2018, 17th of January Blockchain Awareness By Ayoub Fakir – Big Data Developer at DIL
2. 2 INTERNAL Today Ayoub Fakir • Big data developer at DIL • Works on his spare time with University Paris Créteil on Blockchain and how this technology will disrupt businesses based on transactions in few years from now. • He delivered a presentation at the TEDx event in Marrakech (Morocco) few weeks back and also shared the same at the DIL. • We propose to share it with the Smart Data Circle today.
3. 3 INTERNAL The (Hi)Story of Blockchain Created first by “Satoshi Nakamoto” in 2009. In a nutshell, it was designed to solve: The Byzantine Generals’ Problem The Double Spending Problem 1. Its first application: Bitcoin 2. Bitcoin and Blockchain then got separated 3. Smart Contracts, basically applications running on top of a Blockchain have seen the light. è The Ethereum Network. 4. From Proof Of Work to Proof Of Stake. 5. The Scaled Blockchain.
4. 4 INTERNAL The Blockchain is disrupting the world It is a system with rules… Without rulers. No more appeal to authority... Which is known as a cognitive bias, a bug in our “brain software”. Discards logic and reasoning, in favour of power and authority. The rules existing in a Blockchain are only based upon mathematics, and overwhelming consensus. All what matters is... Are we able to reach consensus with the overwhelming majority or not? Taking a big step from Distributed Architectures to Decentralized Architectures
5. 5 INTERNAL The Peer-to-Peer Architecture of the Blockchain ”A distributed cryptographic ledger shared amongst all nodes participating in the network, over which every successfully performed transaction is recorded” Rachel O’Dwyer It is an architecture where everyone is equal, has equal power and equal rights. Nodes directly talking to each other, in order to achieve a certain “consensus”. This consensus is reached throught the “Proof of Work”, “Proof of Stake” or other mechanisms.
6. 6 INTERNAL What is Bitcoin? A Currency? Digital Cash? It is Digital Money, but it’s so much more than that. Bitcoin is a technology, an international network of payments and exchange that is completely decentralized… And we have never done this before in the history of humanity. It is an opportunity of the unbanked. It is an exchange of value through the internet... Where no one controls NOTHING. It is a way to exchange value (money for instance) from point A to point B without intermediaries.
7. I’m sending her 200 euros! (Broadcasted to the Network) 200€ equivalent transfer Oh, he sent her 200 euros, let’s record this Oh, he sent her 200 euros, let’s record this Oh, he sent her 200 euros, let’s record this
8. 8 INTERNAL What is Ethereum? It is a Blockchain meant to run logic (applications) on top of it. Its cryptocurrency is called “Ether” Reaches consensus through the Proof of Work (moving slowly to another model called the Proof Of Stake). These applications are called “Smart Contracts”. Smart Contracts are applications written with “Solidity” (a language very similar to Javascript) to implement some logic. In order for the Smart Contracts to run, they need to turn Ether into Gas, that will then be consumed by them.
9. 9 INTERNAL How do the cryptocurrencies work? Cryptocurrencies can basically be created by everyone. They can be hold in form of wallets, and traded on exchanges. Their value can go up and down just as any other classical market, following the basic rules of ask and demand. They can have their own version of a Blockchain, or be built on top of other Blockchains (like Ethereum, Stellar or EOS).
10. 10 INTERNAL Crypto Markets vs Traditional Markets The Cryptocurrencies Market is different! • Office Open Hour • Very Low Volatility • Governed by Regulations • PR and Finance Updates COMMON FINANCIAL MARKET • Real time - Never stopped • High Volatility • No Regulation Yet • Rumors are Serious CRYPTOCURRENCY MARKET ≠
11. 11 INTERNAL Is Blockchain only about Cryptocurrencies? Nope. The cryptocurrency is only one application (and the first) among millions of others. It is a way to make several untrusted parties to get into an agreement without a central authority. What are some use cases? è Preventing fraud votes. è Improving banks efficiency. è An improved Supply Chain model without intermediaries.
12. 12 INTERNAL Breaking down the Blockchain models Private vs Public Blockchains Private Blockchains are: Permissioned. Nodes should be known to operate. Need a substantial amount of power to maintain the public ledger. Public Blockchains are: Permissionless. Nodes can freely enter and leave the network. Reaching consensus amount nodes is cheaper.
13. 13 INTERNAL What do we mean by a Consensus? What are the models? The way upon which transactions are validated and recorded in a Blockchain. Consensus is what prevent fraudulent actors from doing harm, i.e. spending the same value twice. We have different consensus models: 1. Leader Based: Consensus on recent transactions unilaterally chosen by a particular member elected by the community. The leader changes overtime. 2. Proof of Work: Consensus on recent transactions is unilaterally chosen by a particular member who wins a race to complete a math puzzle. 3. Proof of Stake: The amount each node has of some coin influences consensus: either on selecting which node writes the block, and/or which nodes get to vote. 4. Voting: Consensus on recent transactions is determined by multiple members of community making proposals, with others voting on their preferences.
14. 14 INTERNAL How is the integrity of a Blockchain achieved? 1. Data entering the Blockchain must gather “shared” approval. 2. Cryptographic hashes identify & link data, so changes are readily apparent. I love Blockchain: 01298A37F6C0CACBD84251EFF5281994E5AB0085A33BAA3EB46DC52EF9695A47 I love Blockchains: 086C630F83297FE6708745F36C558B1BFEFB60167B423CAFD3E2314DED68D440 è Even a change in a single bit changes the whole hash.
15. 15 INTERNAL But not only that… Linking these markers together Previous Data Hash Hash of new Data + Previous Hash
16. 16 INTERNAL Shared Data (Trust) Farmer Distributer Warehouse Supermarket Shipper
17. 17 INTERNAL Well… Isn’t the Blockchain just a Shared Database? Who maintains it? Blockchains are immutable. How can a Data be accessed? By whom? Blockchain = Decentralized database + Digital Signatures + Hash Chains.
18. 18 INTERNAL Banks will also profit from the Blockchain Ripple: Allowing cross-border payments with low fees in seconds. Santander recent research showed that banks can save up to 20B$ a year thanks to the Blockchain by 2020. Banks also do investments… Where there are intermediaries that take huge fees. Blockchain might save banks lots of papers and processes... And therefore save a lot of money.
19. 19 INTERNAL Big Data and Blockchain Which business opportunities can be unlocked? Problematic: We store Data in “Big Data Clusters”, also known as Datalakes. When different actors use the same Datalake, we should control access to Data through ACLs. When different companies or entities use the same Datalake, the Multi-Tenancy paradigm is used. – è These techniques are hard and treacherous to maintain. – è They also cost a lot as far as human skills are concerned.
20. 20 INTERNAL The Provchain Architecture An architecture meant to, thanks to the Blockchain, track the provenance and usage of Data inside of a Cloud system. All the Data Operations are maintained in a public ledger, a.k.a. a Blockchain. When we want to access a file, we make a “TAccess” transaction. We can also make “TGrant” transactions.
21. 21 INTERNAL Blockchain and Personal Data Ushare: Letting control between the hands of the users, in the social media networks. Decentralized Data Control / Access. No more central entities to manage Data Security
22. 22 INTERNAL Blockchain + GDPR è GDPR Compliance by Design? DHT (Distributed Hash Table) + Distributed Storage + Private Keys è GDPR Compliance by Design.
23. 23 INTERNAL Use Case for Insurance Smart Contract Deployed
24. 24 INTERNAL 2018, 17th of January THANK YOU!