The State of Blockchain Tech Arpit Mathur Comcast Labs

The Digital Money Challenge • Make digital transactions of value • Without central identity store • Prevent double spending without a trusted third party holding balances of everyone Alice Bob $ 5 $ 2 $ 4 $ 3 $ 1

Lifecycle of a Bitcoin Transaction • Wallet declares transactions to a network of miners • Miners verify each transaction and if its valid collect it • Miners create a Block for the blockchain with all the transactions they know about • Miners compete for the opportunity to write to the blockchain by trying to solve the mining puzzle (Proof of Work) • First miner to find the answer to the puzzle writes to the blockchain and wins 12.5 BTC • In case of multiple winners, the next set of winners can decide which fork to build on top of

Components of the Bitcoin Solution Wallets: • User identity using Public Key Cryptography. • Wallets create Transactions moving bitcoins from 1 wallet to another which are signed with private keys and sent to addresses based on public keys Miners: • Verify transactions on the network and “try” to write to the global ledger • Any miner that gets chosen to write to the blockchain is rewarded 12 bitcoins (Block Reward) Blockchain • A decentralized distributed database that is used to maintain a continuously growing list of records, called blocks. Each block contains a timestamp and a link to a previous block

A digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly. What is a Blockchain

Source: Redefining Security with the Blockchain by William Mougayar Blockchain = Technology + Game Theory

Decentralization and Internet 2.0 CENTRAL NODES PRONE TO COMPROMISE ( DDOS, HACKING, STATE ACTORS) MIDDLEMEN LIMITED BUSINESS MODELS

Blockchains • Trust without a central trust provider • Remove intermediaries • Permanent • Transparent • Slower • Proof of work can be expensive • Permanent • Transparent

The Future

Core Technology

Alt Chains • Bitcoin network is getting slower • Increasing the block size will help but one blockchain for entire world is not feasable • Different chains could be optimized for different things • Susceptible to 51% attacks • Is it worth it for the miners?

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Sidechains

Permissioned chains • Known identity of participants • Faster • Defined Governance

Alternte Consensus Mechanism • ✅ Proof of Work • Proof of Stake • Proof of Activity • Proof of Burn • Proof of Capacity Source: Alternatives to Proof of Work

Coins: Collectable, transferable access tokens

Applications

Computing

Smart Contracts

File Storage

Entertainment

Sharing Economy

Education and Certification

Venture Capital / Crowdfunding

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Go forth and Code

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