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Blockchain Course PDF

This document discusses blockchain business applications and provides examples of how companies are using blockchain technology. It presents several case studies of blockchain implementations, including Chow Tai Fook using it for diamond traceability and JD using it for e-invoices. The document also outlines the basics of blockchain, smart contracts, and tokens. It evaluates the potential of blockchain to reduce costs for transactions and discusses challenges to adoption.

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314 views22 pages

Blockchain Course PDF

This document discusses blockchain business applications and provides examples of how companies are using blockchain technology. It presents several case studies of blockchain implementations, including Chow Tai Fook using it for diamond traceability and JD using it for e-invoices. The document also outlines the basics of blockchain, smart contracts, and tokens. It evaluates the potential of blockchain to reduce costs for transactions and discusses challenges to adoption.

Uploaded by

maghanna88
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Blockchain Business Applications

Professor Hubert Pun


[email protected] / [email protected]
Cases
• Chow Tai Fook: Blockchain for the Diamond
Industry
– Blood diamond / Sustainability
– Supply chain traceability
• A Note on the Application of Blockchain in
China’s Games Industry Coco Game Currency
– Digital currency / Electronic payment
– Platform for online game, vendor, bank
Cases
• BYD: Blockchain-enabled Green Ecosystem
– New energy vehicle
– Encouraging carbon reduction behavior
– Business Ecosystem
• JD: E-invoice with blockchain
– Electronic invoice
– B2B market / Value-added tax
Evaluation
• Class contribution – 50%
• Group analysis / presentation – 50%
Group Work – 50%
• Come up with a blockchain business idea
– What are the industry challenges?
– What advantages will Blockchain provide over
competing technologies?
– What are the challenges will you would face
implementing your idea?
• Some times in class for discussion
• 10 minutes presentation second day afternoon
• Business proposal (May 15; Fri)
Blockchain Basic
Meaning of the Buzzwords

• Acquiring data
– Through sensors, e.g., Internet of Things (IoT)
• Storing data
– Blockchain
• Understanding data
– Artificial intelligence (AI)
Blockchain Basic

• Blockchain is a distributed, decentralized, public


ledger
– Distributed: Data is stored on network of nodes. All
participated parties maintain and construct the ledger.
– Decentralized: Data is not controlled or governed by any
single entity.
– Public: Transactions can be audited by the public
– Ledger: Transactions are recorded in a verifiable and
permanent way. A complete record of transaction over
lifetime.
Blockchain Basic

• Smart Contracts
– Event triggered executable code, e.g., ship the product
when payment is received, or distribute divided upon
their declaration
– Purpose is to facilitate, verify or enforce the negotiation
or performance of a contract
• Tokens
– Rights to an asset
– Digital token on blockchain (e.g., Bitcoins)
Blockchain Basic

Advantage:
• Immutability
– Do no need a central authority to check integrity.
– Trust in one another without needing a third party (e.g.,
appraiser) or conduct further due diligence
• Distributed consensus
– Each node independently verify transaction before adding to
the record; makes transaction robust and reliable.
– No need to have coordination among nodes; hence, faster
transaction at lower costs.
Blockchain Basic

Challenges:
• No regulatory framework, and not sure how
government can be involved.
• Not compatible among many flavor of blockchain.
• Scalability - database always need to be duplicated.
• Quantum computers
– Blockchain security relies on one way computation
– May be available in a decade
Public Blockchain

• Permissionless, open to anyone


• Each use their own native currencies (for claiming an
underlying asset; also the compensation to miners for
verifying transaction; give the pseudonymous nature
of member)
• e.g., bitcoin and Ethereum
Private Blockchain

• Enterprise or permissioned; access to network is


permissioned, not everyone can join
• An alliance of companies (ecosystem)
– IBM’s blockchain platform, used by Walmart (food tracing)
and Anglo-Australian multinational Rio Tinto Diamonds
Private Blockchain Applications
Adopting Blockchain in Business

Technology adoption depends on:


• Novelty: the degree which is new to the world
• Complexity: level of ecosystem coordination
involved
Adopting Blockchain in Business

Using TCP/IP as an example


• Stage 1 - Single use
– Basic peer-to-peer email on ARPAnet (around 1970s)
• Stage 2 - Localized use
– Private network within organization
• Stage 3 - Substitutive for existing business
– CNET for news, Amazon for bookstore
• Stage 4 - Transformative - new way to do business
– Skype, eBay
Adopting Blockchain in Business

• TCP/IP lower cost of connection


• Blockchain lower cost of transaction
• Currently, records of transaction is huge and very
costly. Everyone has its own record and private
– Stock: settlement (ownership transfer of stock) takes
several days
Adopting Blockchain in Business

• How blockchain will reduce cost


– The cost of verifying a transaction
– The cost of exchanging value without relying on
intermediary
• Ask where resource is being wasted in auditing
transaction or reconciling database and secure
integrity within organization.
– Minimizing verification cost
Adopting Blockchain in Business

• Stage 1 - Single use


– Bitcoin for “bilateral financial transaction”
– Similar to ARPAnet email is for bilateral messaging.
• Stage 2 - Localization
– High novelty but only limited users, so easier to promote
adoption
– Nasdaq, JPMorgan, NY Stock Exchange are all testing
blockchain to replace paper based transaction
Adopting Blockchain in Business

• Stage 3 - Substitution
– Low novelty but high needs of coordination because new
way of doing business
• Stage 4 - Transformation
– Require major social, legal, political change
– Smart contract: Firms have lots of contract (e.g., buyer
supplier, employee relations).
• Would have impact to lawyer, accountants
Private Blockchain Applications

Strength
• Visibility
– e.g., Walmart ships mangoes from Mexico
• Aggregation of information from various places
– e.g., Everledger diamond
• Validation - Digital claims on assets
• Automation - Smart contract
• Resiliency - Byzantine fault tolerance
Private Blockchain Applications

Weakness
• Lack of standardization
• Garbage-In-Garbage-Out (GIGO) problem
– State-zero problem
• Black box effect
– Meta-trust in blockchain
• Inefficiency
– e.g., Proof-of-Work
• Privacy concern

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