Blockchain Unblocked - Speaker Deck

Blockchain Unblocked

by Arnav Gupta

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Blockchain Unblocked

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About me? I am Arnav Gupta a.k.a @championswimmer on the internet I make apps and websites, teach programming, and happen to know a bit about cryptocurrencies

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A BIT ABOUT MYSELF FOUNDING MEMBER, CODING BLOCKS

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A BIT ABOUT MYSELF GSOC MENTOR, FOSSASIA

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A BIT ABOUT MYSELF STARTED-UP: GREPLR, NOW FOUND IN YU PHONES

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A BIT ABOUT MYSELF TALKS AT DROIDCON, JSFOO, 50PCONF

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Background How it all begun for me >

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COLLEGE 2ND YEAR CUSTOM ROMS, ANDROID OS HACKING

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INTERNSHIP: CUBE26 BUILDING OS FEATURES FOR MICROMAX CANVAS NITRO

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SONY OPEN SOURCE DEVELOPER PARTNER GETTING A WHOLE LOT OF XPERIAS

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. . BITCOINS ? ? But wait a second . . . how did you get into . . >

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“ Once upon a time, in a dark dark age (2011), when sending Paypal payments into India was quite a hassle, I set up a Bitcoin wallet – because 1 BTC > $0 (For donations on XDA for my custom ROMs I used to build) Bitcoin price back then ? $1 = 1 BTC Price 3 years later ? $1000 = 1 BTC

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Renewed Interest 2015 : Won HackIndia (India’s Largest Hackathon at that time) Sponsor: Coinsecure Prize : 2 Bitcoins

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Where are we with Cryptocurrencies in 2017 ?

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$150,000,000,000 Market Cap : That’s a lot of money 100% Total success! 50,000,000 users And a lot of users

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Going deep Understanding Cryptocurrencies involves understanding both the concept of money and the technology of blockchain

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PRODUCT What actually has value. Can be tangible or in form of services. More you produce = richer you are Try to produce > consume Economics 101 MONEY Doesn’t really exist A man-made token to mediate ‘barter’ Helps exchange ‘products’ Money doesn’t make you rich. It is means to an end

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Problems of classical currencies Value is backed by central entity (bank). This can be susceptible to political instability Eg. Greece It is “physical”. So problems of storage, security, transportation, preservation and prevention of forgery Importance of ownership more than transaction. Thus usually impossible to prove ‘cash theft’.

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Enter the Blockchain ◇ Secure (No such thing as unmarked cash) ◇ Distributed (No central authority) ◇ No coins, only transactions ◇ Works by consensus

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Understanding the concept of Blockcain

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These guys need to transfer money to each other Varun Bhavya Apoorva Aditi Abhishek • Varun > Aditi: Rs. 10 • Aditi > Abhishek: Rs. 20 • Apoorva > Bhavya: Rs. 5 • Bhavya > Varun: Rs. 50

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But we cannot store all the world’s transactions in one page • ▪ • ▪ ▪ • ▪ •

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Hash functions ▪ ▪ ▪ ▪

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Merkle Trees Root Hash Hash12 Hash1 Tx1 Hash2 Tx2 Hash34 Hash3 Tx3 Hash4 Tx4

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Recursive hash chains Data Timestamp Metadata Prev Hash Data Timestamp Metadata Prev Hash Data Timestamp Metadata 0

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The blockchain Block 1 Root Hash Hash12 Hash1 Tx1 Hash2 Tx2 Hash34 Hash3 Tx3 Hash4 Tx4 Timestamp Nonce Prev Hash Genesis Block Timestamp Nonce 0 Block 2 Timestamp Nonce Prev Hash Root Hash Root Hash

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How the blockchain works • • ▪ ▪ ▪ • ▪ ▪ ▪ ▪

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The 51 percent attack • ▪ ▪ ▪ • ▪ ▪ ▪ ▪ ▪

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The importance of “mining” • ▪ ▪ • ▪ ▪ ▪

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Proof of Work vs Proof of Stake • • • • • • • • • • • •

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Challenges The risks that lie ahead for blockchain

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Energy Sustainability ◇ $ 15 million : Electricitry cost of mining bitcoin per day ◇ Generating each block : Power for 6 American homes (day) ◇ If electricity cost > fiat equivalent of BTC, no one will mine ◇ 80% of mining happens in China using subsidized electricity. ◇ Fears of Chinese Govt. monopolizing the bitcoin mining

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Anonymity and the money trail ◇ Blockchain is public. All txn records are visible ◇ Easy to track the money trail ◇ Hampers privacy, and many use cases of trail-less transactions cannot be fulfilled by Bitcoin

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Insecure storage ◇ You truly own your Bitcoin only if you have the private key ◇ Mostly people use online wallets ◇ In online wallets, you do not own the money. ◇ Unlike a bank, bitcoin wallets are not regulated. They can run away with your money, and you have zero legal recourse

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Deflationary Spiral ◇ The total goods/products in the world will continue to rise infinitely. ◇ Total blocks that the blockchain will have is limited *as of current implementation ◇ That means total money is limited. Total produce is unlimited ◇ Price of bitcoin will forever go up. This is deflation.

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Beyond currencies The blockchain, and related technologies can be used for far more things than just record financial transactions

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A blockchain recap ◇ A blockchain is not a currency model ◇ A blockchain is not a ledger ◇ A blockchain is not meant *only* for transactions. ◇ What a blockchain is ? ￭ Chain of records. Cannot change events in the past. ￭ Distributed and decentralized. Can work with consensus, without a central authority.

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The possibilities ◇ ◇ ◇ ◇ Simply ask this question – “What are places where we need a central authority to verify/establish trust ? What are places where we need to maintain a long list of transactions/events ? “

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“ A look at who all are building technologies based on blockchain and/or smart contracts