Blockchain

Technology
What is Blockchain Technology?
Originally, blockchain was just the computer
science term for how to structure and share data.

Today blockchains are hailed the “fifth evolution”

of computing.

Blockchains are a novel approach to the

distributed database.

The innovation comes from incorporating old

technology in new ways.
Characteristics of Blockchains
• Decentralized (distributed)
• Append-Only - No edit / update /
delete
• Allows new blocks to be created, but
does not allow existing data stored
in a Blockchains to be changed
• Unfalsiable, Verifiable, Transparent
• Secured using public key encryption
 A blockchain is a peer-to-peer system
with no central authority managing
data flow.

One of the key ways to removing

central control while maintaining data
integrity is to have a large distributed
network of independent users.

This means that the computers that

make up the network are in more than
one location. These computers are
http://dailyblockchain.github.io/
often referred to as full nodes.
Why blockchains matter
Blockchains are now recognized as the “fifth evolution”
of computing, the missing trust layer for the Internet.

Blockchains can create trust in digital data.

When information has been written into a blockchain

database, it’s nearly impossible to remove or change it.

This capability has never existed before.

When data is permanent and reliable in a digital format,

you can transact business online in ways that, in the past,
were only possible offline.
Use of
Blockchain
• Everything that has stayed
analog, including property
rights and identity, can now
be created and maintained
online.
• Slow business and banking
processes, such as money
wires and fund settlements,
can now be done nearly
instantaneously.
Applications
of Blockchain
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Cryptocurrency
A cryptocurrency is a digital asset

Designed to work as a medium of exchange

Individual coin ownership records are stored in a ledger

existing in a form of computerized db

The db using strong cryptography to secure transaction

records, to control the creation of additional coins, and to
verify the transfer of coin ownership
Cryptocurrency
Cryptocurrency
Bitcoin
Bitcoin is a digital currency created
in January 2009 following the
housing market crash.
It follows the ideas set out in a
whitepaper by the mysterious and
pseudonymous Satoshi Nakamoto.
The identity of the person or
persons who created the
technology is still a mystery.
Trading on Bitcoin
Using Cryptocurrency
• Moving money faster
• Fraud Prevention – Due to auditable trail
• Guaranteed payments
• Faster and better trade
• Border-free Payroll
• Micropayments
 Banking was the first industry to recognize the threat of Bitcoin and
then the potential of blockchain to transform the industry.

The banking sector is highly regulated, and the fees to organize and
operate as a bank are expensive.

Blockchain These heavy regulations have been an insulating and protective

shield for the whole industry, as well as a burden.
in Finance The application of fast, efficient, digital money that doesn’t carry the
cost of handling cash and that is traceable as it moves through the
financial system was an intoxicating and threatening proposal.

The idea that value can be held outside the control of central
authorities also piqued the interest of financial institutions and
governments that back currencies.
Blockchain in Real Estate
Blockchain technology has been proposed as a supplement
to help consumers in common law title systems.

Blockchains are fantastic public recordkeeping systems; they

also can’t be backdated or changed without a record.

In theory, blockchains could transform common law systems

into distributed title systems.
Blockchain for Governments
• Blockchain technology could also • Singapore has been a leader in
be used to share information smart city development and has
between networks in a smart city begun developing smart cities in
securely. other countries.
• The Indian government launched • Andhra Pradesh and the Monetary
its Smart Cities Mission in 2015, Authority of Singapore have
with the intention of building 100 announced a financial technology
new smart cities. Many of these (fintech) innovation partnership,
developments will be in the Delhi with a primary focus on blockchain
Mumbai Industrial Corridor, which and digital payments.
is a 620-mile (1,000km) stretch
between Delhi and Mumbai.
Blockchain for Governments
• Indian authorities have also • In 2016, the central government
engaged a team of Singaporean of the United Kingdom put out a
experts to assist the report called “Distributed Ledger
development of a satellite town Technology: Beyond Block
in Himachal Pradesh. Chain” ( https://goo.gl/asIz6L ),
• The 49-acre (20-hectare) project which asserted that distributed
aims to help decongest Shimla, a ledger technology (blockchains)
town that has had a massive could be used to reduce
population rise in the past few corruption, errors, and fraud,
decades. and make various processes
more efficient.
Blockchain for Governments
• The Dubai government has • Dubai’s Global Blockchain
estimated that its blockchain Council (GBC) announced seven
initiative has the potential to new public-private
save 25.1 million hours in collaborations, combining the
productivity. This boost in skills and resources of startups,
efficiency will also help to cut local businesses, and
back on carbon emissions. government departments.

The government of Dubai has an ambitious plan to move all government

documents and systems onto the blockchain
Healthcare:

• The Estonian software company, Guardtime will collaborate with

one of Dubai’s largest telecom operators, Du, to provide the
technological expertise for digitizing healthcare records and
moving them to the blockchain.

The diamond trade:

• A pilot project will use blockchain technology for the

authentication and transfer of diamonds. The Dubai Multi
Commodities Center will be digitize Kimberly certificates
(documents created by the UN to restrict the trade of conflict
diamonds).
Title transfers:

• Title transfers will be digitized and recorded on a blockchain. A

Singaporean blockchain startup known as Dxmarkets has
developed a proof-of-concept.

Business registration:

• The GBC is trialing the use of blockchain technology for business

registration. This is different from the decentralized autonomous
organization (DAO) of Ethereum but could streamline identity
verification through the Flexi Desk program. It’s currently in the
demo stage, with several entities working on a proof-of-concept.
Tourism:

• Dubai Points is a pilot program that was launched in collaboration with Loyyal,
using blockchain technology to help the tourism industry.
• It aims to incentivize travel by granting points to travelers who visit certain places.
It will use smart contracts to facilitate the rewards. These points many work like a
crypto token and be tradable an exchanges.

Shipping:

• IBM is working with the GBC to use blockchain technology for improved shipping
and logistics. The program aims to help regional players to collaborate on how
they exchange goods. Smart contracts will be utilized as solutions for compliance
and settlement issues.
• Dubai, like Singapore, has put its money and talent into insuring that it will
dominate the blockchain space quickly. This is one luxury of small government and
central authority.
Smart Contracts
Smart contracts are computer code
that are stored on a blockchain and
automatically execute when
predetermined terms and conditions
are met.
At the most basic level, they are
programs that run as they've been set
up to run by the people who developed
them
Smart Contracts
Benefits of Smart Contracts
Cutting out middleman means savings for the
business.

According to a McKinsey report it is estimated that

blockchain could save businesses at least $50 billion
in B2B transactions by 2021.

According to Accenture research published at the

start of 2017, investment banks alone could save up
to $12 billion per year by adopting blockchain and
smart contracts, effectively.
Gartner has estimated that by 2022, smart contracts
will be in use by more than 25% of global
organizations.
Benefits of Smart Contracts
Security: Economy and speed: Standardization:

• The smart contract is • Most processes are • There is a wide range of

encrypted and distributed automated, and most different types of smart
among nodes. intermediaries are contracts nowadays.
• This guarantees that it will eliminated. • Radically reduce transaction
not be lost or changed costs (bureaucracy) through
without your permission. machine consensus and auto-
enforceable code.
• Bypass the traditional
principal-agent dilemmas of
organizations, thus providing
an operating system for what
some refer to as “trustless
trust”.

This means that you don’t have to trust people and organizations, you trust code, which is open source and
provides transparent processes.
“Smart” Contracts?
A smart contract can only be as smart as
the people coding taking into account all
available information at the time of
coding.

While smart contracts have the potential

to become legal contracts if certain
conditions are met, they should not be
confused with legal contracts accepted
by courts and or law enforcement.
Bibliography
• Blockchain for Dummies by Tiara Lawrence
• Blockchain - Blueprint for a New Economy by Melanie Swan
• https://kustard.io/blog/are-smart-contracts-really-smart/
• https://blog.goodaudience.com/blockchain-for-beginners-what-is-
blockchain-519db8c6677a
• https://kustard.io/blog/are-smart-contracts-really-smart
• https://www.ibm.com/blogs/blockchain/2018/07/what-are-smart-
contracts-on-blockchain/
• https://bravenewcoin.com/insights/mckinsey-sees-blockchain-
technology-reaching-full-potential-in-5-years