1 Blockchain in 2019: Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Christian Weyer Co-Founder & CTO [email protected] @christianweyer

2 2 § Co-Founder & CTO at Thinktecture AG § Personal focus on § Mobile & web-based application architectures § Interoperability, cross-device § Pragmatic end-to-end solutions § Cloud-native & serverless architectures § Independent Microsoft Regional Director § Microsoft MVP for ASP.NET (Architecture) ASPInsider, AzureInsider § Google GDE for Web Technologies [email protected] @christianweyer https://www.thinktecture.com Christian Weyer & Thinktecture Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

3 3 Five Things, No Hype Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

4 4 Five Things A Blockchain Operating Models A Block Smart Contracts Use Cases Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

5 5 Blockchain illustrated by example Phone number porting Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

6 6 Telco A Telco B 0151-123 123 123 John Doe 1 Feb 1960 0151-123 123 123 John Doe 1 Feb 1960 Fax, email, letter, ... SMS, email, letter, ... Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

7 7 Telco A Telco B 0151-123 123 123 John Doe 1 Feb 1960 0151-123 123 123 John Doe 1 Feb 1960 Fax, email, letter, ... SMS, email, letter, ... Well, for us everything seems ok. Please ask the others. ? Well, for us everything seems ok. Please ask the others. Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

8 8 #1 – What is a blockchain? Genesis Block Block 1 Content (maybe random) Hash Data Genesis Hash Block 1 Hash Block 2 Data Block 1 Hash Block 2 Hash Block 3 Data Block 2 Hash Block 3 Hash Header Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

9 9 Node 1 And what's a blockchain network? Genesis Block Block 1 Block 2 Block 3 Node 2 Genesis Block Block 1 Block 2 Block 3 Node n Genesis Block Block 1 Block 2 Block 3 Block 4 Block 4 Block 4 Block 5 Block 5 Block 5 Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

10 10 #2 - Two different operating models Public Blockchains Ethereum, Bitcoin, ... Private Blockchains Telco E Telco C Telco A Telco F Telco G Telco B Telco D BNA Telco X Industry consortiums, governments, ... ? ! Telco X Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

11 11 • Networks like Bitcoin consume lots of energy Public blockchains and mining costs For transaction processing? A A • Proof-of-Work, but fortunately there are alternatives Figuring out who may create the next block? B Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

12 12 Private blockchains work differently • Participants are known; access rights are controlled; bad actors can be removed from network • No Proof-Of-Work mining necessary, but byzantine-fault tolerant signature-based schemes (Proof-of-Authority) • Costs are of a magnitude lower compared to Public • Transaction numbers much higher than with Public • Optional transaction privacy by reduced visibility (only participants in a TX receive it) • Medium to long term: interconnectivity between public chains and multiple, independent private chains E C A F G B D BNA X Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

13 13 • Transactions (or: signed statements), which can't be changed or deleted at a later time #3 – What's in a block? (In practice, these are machine readable transaction records) The verified customer John Doe, born on Feb 1st, 1960, wants to transfer his number 0151-123 123 123 from Telco A to us Signed: Telco B We're OK with this transfer Signed: Telco A Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

14 14 Transactions or parts can be encrypted {"tx":"requestTransfer", "phone":"0151-123123123", owner: "TelcoA", encryptedCustomerData: "0xe2cbcf5f890afabc4dbd236d19f949db 05fcec2155..."} Signed: Telco B Encrypted with the public key of Telco A Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

15 15 TXs can contain hashes of external data {"tx":"requestTransfer", "phone":"0151-123123123", owner: "TelcoA", signedScannedContractHash: "0x80ebe76679b4812cde61d555c9026...", encryptedCustomerData: "..."} Signed: Telco B "I've got a PDF here (which I'm not showing right now) with this hash" • To later prove existance and integrity of a piece of information at the time of block creation Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

16 16 TXs can contain references to Point-to-Point data {"tx":"requestTransfer", "phone":"0151-123123123", owner: "TelcoA", externalDataHash: "0x5489b348f7a433...", } Signed: Telco B A hash to data which is sent directly to receiver (off-chain) • To ensure privacy: data is sent directly to the receiver without being shared with the network Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

17 17 • How can we verify if transactions are valid? Validity of Transactions? We're ok with the transfer of number 0151-123 123 123 to Telco A Signed: Telco B Telco C WAIT! 0151-123 123 123 is not yours, but ours! • Laws, contracts, penalty payments (post-fact) • Or with technical solutions (pre-fact) Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

18 18 • The rules, which determine if a transaction is valid #4 - Smart Contracts Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

19 19 Node 1 function confirmTransfer(number, transferTarget) { if (owner[number] == msg.sender) { owner[number] = transferTarget; } else throw; } owner[number] == msg.sender owner[number] = transferTarget; Number Owner 0151123123123 Telco C 01511111111111 Telco A 01511111111112 Telco Z We're ok with the transfer of number 0151-123 123 123 to Telco A Signed: Telco C Cryptographic check State is changed OK Number Owner 0151123123123 Telco A 01511111111111 Telco A 01511111111112 Telco Z Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

20 20 Ask yourself three questions: a) Do you have independent participants? • No central authority? • No asymmetric power concentration? • Is everyone participating voluntarily? b) Do you need transparent and immutable shared data? c) Do you need trusted shared code execution? #5 – Can blockchains support my use case? Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

21 21 Basically, three levels of use cases for Blockchains Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

22 22 Documenting Collaborating Transforming • „Timestamping“ • Put a hash of your private documents or data on a blockchain • Technical proof of integrity and existence of documents and data at a certain point in time • Relatively easy to implement, quick ROI • No – or only small – focus on smart contracts Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

23 23 Documenting Collaborating Transforming • Data exchange and process transparency • States of processes managed via blockchain • Digitization of paper processes between companies • E.g. Phone number porting Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

24 24 Documenting Collaborating Transforming • Create new business opportunities and markets • Reality check: Increased complexity due to the number of stakeholders Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

25 25 • Commercial interest (2M+ carsharing user in Germany) • Customers: better premiums • Insurer: competitive advantage • Carsharing provider: competitive advantage; maybe commission • Challenges • GDPR-conforming data processing • Scaling to lots of parties on all sides (no point-to-point interfaces) • Data should survive bankruptcy of a party (no on-demand generation) Idea: Case: Accident-free carsharing KMs per year Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

26 26 Carsharing provider Insurer Blockchain 239587030 4957443873 459089845 3458999… 947989834 5345534524 958458205 755345… 9447757234 2349348572 345580923 84949283… 209389084 923840982 342394820 9348934… Customer Publication of signed data, encrypted with the public key of each customer Customer can decrypt her data at any time. Nobody else can. May 2018 Cust 1122 – 97 km - Provider1 June 2018 Cust 1122 – 535 km - Provider1 Customer can pass data to third parties after decryption. Even if the creator of the data does not exist anymore. (Ultimate data sovereignty) Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

27 27 Carsharing provider #1 Insurer 1 Blockchain Customer Carsharing provider #2 Rental car provider Insurer 2 Insurer 3 0304... 4586... 6436... 9384... 5463... 5854... … Feb 2018, 50 km, Stadt- mobil Feb 2018, 25 km, DB March 2018, 1534 km, Sixt Transfer by customer! Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

28 28 1. Blockchain networks replicate chains of blocks which are created according to a consensus algorithm 2. Two different types of network: private and public (differ in consensus, transaction privacy, throughput, ...) 3. Blocks consist of immutable, signed statements called transactions 4. Smart contracts are shared program code, triggered by transactions; nothing more and nothing less 5. Blockchain use cases are based on decentralization The Five Things A Block- chain Opera- ting Models A Block Smart Con- tracts Use Cases Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

29 29 … but … Your business model should be decentralized to use decentralized technology. If your business model is more „like a database“, use a database. Put an API in front. It's much simpler. (YAGNI) Blockchain is cool (technology)! Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019

30 30 Thank you! Contact: [email protected] Documenting Collaborative Transforming Wichtigste Fakten & sinnvolle Use Cases – jenseits des Hypes Blockchain in 2019