What’s Blockchain?

Slides I used for speaking as a guest at the ZEMI of Prof. Kanno at Graduate School of Business and Finance, Waseda University, on June 29, 2021.

Transcript

1. If the economy and labor change, why and in what way? What’s Blockchain? Kenji Saito Graduate School of Business and Finance, Waseda University What’s Blockchain? — 2021-06-29 – p.1/6
2. The slides are also available at https://speakerdeck.com/ks91 What’s Blockchain? — 2021-06-29 – p.2/6
3. Ex. Let’s Consider About A Last Will Many people would think they can just digitize their wills They think that if they use a digital signature instead of a handwritten one, you can verify the authenticity without relying on witnesses However, wills are one of the examples of something that cannot be digitized using conventional thinking A digital signatures is made using a private key The basic premise of digital signatures is that the person signing the document has the private key hidden, as the name implies “Leakage of private key”, “compromise of signature algorithm”, and “expiration of public key certificate” are the three major risks of digital signatures But, a will is not actually used until after the death of the one who signed it If the private key might not be kept secret, it is possible that one of the heirs who has access to the private key may have committed fraud Timestamps and other information can be easily rewritten or faked Even if a notary in the digital age will take care of your will, you have to be suspicious of the possibility of their collusion with your heirs What’s Blockchain? — 2021-06-29 – p.3/6
4. Ex. Let’s Consider About A Last Will - contd. Let’s sort out the requirements It must be verifiable by you and your heirs that each of the properties below ↓ is fulfilled 1) You can prove your identity and authorship of the will with your own help (Part of) self-sovereignty 2) A will can always be made or updated if the author wishes so Censorship resistance and fault tolerance 3) The contents of the will cannot be reversed (or deleted or retroactively forged) Tamper resistance Blockchain was designed to meet the above requirements You may wonder “For a will? I’ve never heard of such a story” Replace ‘make or update a will’ with ‘transfer bitcoins’ and ‘authorship’ with ‘ownership’ What’s Blockchain? — 2021-06-29 – p.4/6
5. DeFi (Decentralized Finance) Simply put, “finance that bypasses banks and other financial institutions” Assuming you have some ledger technology to pass the “the last will test” (whether a last will can be made and updated with the technology or not) ⇒ Comes with self-sovereignty, censorship resistance, fault tolerance and tamper resistance You have the program code written in that ledger ⇒ called “smart contracts” Run a financial application with that code ⇒ Authentic code (not to say bug-free) is proven to be running Examples Crypto-assets like bitcoin Decentraliezd exchanges NFTs (Non-Fungible Tokens) and their applications, etc. What’s Blockchain? — 2021-06-29 – p.5/6
6. Why I Don’t Explain How It Works Today Explaining how blockchain works is like explaining vacuum tubes to a would-be YouTuber today Name of tech Television Ledger What we want Sending images to distant places Proof of authenticity of records (to spend our money freely) First element tech Cathode ray tube (vacuum tube) Blockchain First business model TV Bitcoin Evolved into YouTube, Zoom, etc. ??? Just as YouTube and Zoom have democratized “sending images to distant places” It is important to democratize “proof of authenticity of records” with the technology to be created in the future Instead of chasing freedom of consumption (because consumerism will probably end) What’s Blockchain? — 2021-06-29 – p.6/6