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That Blockchain Thing

That Blockchain Thing

A presentation about blockchain, bitcoin, and other weird stuff

Stefan Tilkov

October 16, 2019
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  1. Blockchains,
    Distributed Ledgers,
    and more
    Stefan Tilkov
    @stilkov


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  2. @stilkov
    Blockchain (noun) \ ˈbläkˈchān:
    A slow, hard-to-scale, distributed
    immutable event log with a
    consensus approach based on turning
    a tree into a chain by converging on
    the branch with the most hashing
    power provably spent on it

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  3. @stilkov
    Ledger (noun) /ˈlɛdʒə/
    a book or other collection of financial
    accounts
    Distributed Ledger (noun) /ˈdɪstrɪbjuːtíd ˈlɛdʒə/

    A blockchain not called a blockchain because
    (a) it doesn’t actually chain blocks or

    (b) you think blockchains are uncool

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  4. @stilkov
    Bitcoin: Vocabulary
    Transaction
    Block
    Wallet
    Address
    Node
    Blockchain
    Private Key
    Public Key
    maintains copy of
    creates
    consists of
    inputs
    encumbered
    with
    derived from
    derived from
    maintains
    validated by
    includes
    creates
    references
    previous
    Bitcoin
    contains

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  5. Consensus and

    Byzantine Failure Tolerance

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  6. @stilkov
    Hashing and Proof-of-work (PoW)
    Hashing
    Algorithm
    0100101001001
    01011111100101
    0010101001010
    11010101001011
    1000100101001
    00101011111100
    12CA0219FABC1236

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  7. @stilkov
    Hashing
    Algorithm
    0100101001001
    01011111101101
    0010101001010
    11010101001011
    1000100101001
    00101011111100
    ABC8329FF129878E
    Hashing and Proof-of-work (PoW)

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  8. @stilkov
    0100101001001
    01011111100101
    0010101001010
    11010101001011
    1000100101001
    00101011111100
    12CA0219FABC1236
    Hashing and Proof-of-work (PoW)

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  9. @stilkov
    Hashing and Proof-of-work (PoW)
    Hashing
    Algorithm
    0100101001001
    01011111100101
    0010101001010
    11010101001011
    1000100101001
    00101011111100
    0000************

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  10. @stilkov
    PoW Energy Discussion
    Position 1: “Catastrophic”
    • Continuously increasing demand
    • The Netherlands: 106TWh/y
    • Bitcoin: 65 TWh/y
    • Little to no value, only speculation
    • Use of cheap & dirty energy sources
    • Completely useless hardware with limited shelf life

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  11. @stilkov
    PoW Energy Discussion
    Position 2: “No big deal”
    • Demand will not increase linearly
    • More useful than Christmas lights
    • Transparent costs, as opposed to classical banking
    • No need for multiple PoW chains
    • Use of cheap & clean energy sources, excess energy
    • ASIC-resistant algorithms
    @stilkov

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  12. @stilkov
    Proof-of-work alternatives
    • Proof-of-stake (PoS)
    • Proof-of-authority (PoA)
    • Proof-of-service (PoSe)
    • Proof-of-capacity (PoC)
    • Proof-of-elapsed-time (PoET)
    • …

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  13. @stilkov
    Permissioned vs. Public
    Trusted,

    Known
    Untrusted,
    Unknown
    Untrusted,
    Joined
    Untrusted,
    Known
    Bitcoin
    e.g. Ripple
    DB e.g. Dash

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  14. @stilkov
    Criteria
    a.k.a.
    “So you think you need a
    blockchain …”

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  15. @stilkov
    Do you really need decentralization?
    • Is there a single trusted organization?
    • Do you trust it to not be malicious?
    • Do you trust in its competency and security practices?
    • Do you trust its longevity?
    You don’t need a blockchain.

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  16. @stilkov
    Are you suspicious about history?
    • Can you trust available information is correct?
    • Can you trust it hasn’t been tampered with?
    • Can you trust it’s complete?
    You don’t need a blockchain.

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  17. @stilkov
    Do you want to invite everyone?
    • Do you have control over who can participate?
    • Do you have a separate onboarding process?
    You don’t need proof of work.

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  18. @stilkov
    Is identity/authority problematic?
    • Do you trust that participants are who they say they
    are?
    • Can you be sure they have the authority to do what they
    do?
    • Is there a trusted arbitrator?
    You don’t need proof of work.

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  19. @stilkov
    Do you have doubts about processes?
    • Can you trust computation followed the rules you
    expected?
    • Can you trust code is correct?
    • Can you trust code hasn’t been tampered with?
    You don’t need smart contracts.

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  20. @stilkov
    Do you have nothing to hide?
    • Is all the data supposed to be private?
    • Is data only supposed to be visible to a subset of your
    users?
    • Is pseudonimity an insufficient solution?
    You can’t store your data

    in a (public) blockchain.

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  21. @stilkov
    Criteria
    • Do you really need decentralization?
    • Are you suspicious about history?
    • Do you want to invite everyone?
    • Is identity/authority problematic?
    • Do you have doubts about processes?
    • Do you have nothing to hide?

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  22. @stilkov
    Examples

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  23. @stilkov
    Property Management
    • Record (partial) ownership
    • Trade property/shares
    • Identity
    • DRM
    • Access Control
    • Digital Assets
    • …

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  24. @stilkov
    Obligations
    • Taxation
    • Emission fees
    • Debt
    • Clean energy fares
    • …

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  25. @stilkov
    Insurance and finance
    • Claim regulation
    • Ownership transfer
    • Shared sign-off
    • Intra-bank clearing
    • Asset management
    • Risk management/sharing
    • …

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  26. @stilkov
    E-Commerce
    • Provenance tracking
    • Virtual Marketplaces
    • Participation models
    • Loyalty programs
    • …

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  27. @stilkov
    Other use cases
    • Tracking of certifications
    • Fully automated payment (charging, usage fees)
    • Public records of GPS tracking
    • Safe auditing with legitimate (limited) law enforcement
    access
    • …

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  28. @stilkov
    Summary

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  29. @stilkov
    You probably don’t need a blockchain

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  30. @stilkov
    If you need one, carefully select
    something that matches your needs

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  31. @stilkov
    Beware of snake oil vendors

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  32. @stilkov
    Explore the benefits and disrupt :)

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  33. innoQ Deutschland GmbH
    Krischerstr. 100
    40789 Monheim am Rhein
    Germany
    Phone: +49 2173 3366-0
    innoQ Schweiz GmbH
    Gewerbestr. 11
    CH-6330 Cham
    Switzerland
    Phone: +41 41 743 0116
    www.innoq.com
    Ohlauer Straße 43
    10999 Berlin
    Germany
    Phone: +49 2173 3366-0
    Ludwigstr. 180E
    63067 Offenbach
    Germany
    Phone: +49 2173 3366-0
    Kreuzstraße 16

    80331 München
    Germany
    Phone: +49 2173 3366-0
    @stilkov
    That’s all I have.

    Thanks for listening!
    Questions?
    Stefan Tilkov
    @stilkov

    [email protected]
    Phone: +49 170 471 2625
    More at: https://blockchain.innoq.com

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  34. @stilkov
    www.innoq.com
    OFFICES
    Monheim
    Berlin
    Offenbach
    Munich
    Zurich
    FACTS
    ~125 employees
    Privately owned
    Vendor-independent
    SERVICES
    Strategy & technology consulting
    Digital business models
    Software architecture & development
    Digital platforms & infrastructures
    Knowledge transfer, coaching & trainings
    CLIENTS
    Finance
    Telecommunications
    Logistics
    E-commerce
    Fortune 500
    SMBs
    Startups

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