blockchain analysis: 2016-11-23 meetup fintech marketpay.io - lemonpay.me
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November 2016.
Blockchain startup experience
enabling the sharing economy
Applied to mobile payments
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\ What can blockchain do for us?\ Is it better than a cloud solution?\ Is it easy to use and deploy?\ How much does it cost?\ Being early adopters is risky business?\ Which blockchain do I need?\ Blockchain real life use cases\ Pros and Cons
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Marketpay team
ricardforn
alejandrocabanillas
franciscoaréchaga
beatrizamilibia
ferranfigueredo
juanperez
• Users meet at the marketplace• Buyer or seller can start the transaction,
introducing amount and address for shipping. • The counterpart is notified on his/her mobile
phone and accepts the escrow transaction.• Buyer can ask for instant credit.• Seller pays the PSP fee.• The escrow payment is released automatically
24h after successful delivery. • Pay-out to the seller’s account is executed right
away.
LemonPay. Designed to facilitate the economic transaction between peers
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the escrow payment provider that enables marketplace revenue models
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Secure escrow based transactions are core to the sharing economy: anonymity, compliance and agile
business rules for marketplaces\ Marketplaces, e-commerce websites and mobile apps must
guarantee secure transactions between buyers and sellers.
\ Marketpay covers all your operational cycle which includes:
o Pay-in and pay-out transactions and wallet statements.
o Agile escrow rules and payments upon delivery.
\ Most countries require a banking license to handle money on
behalf of third parties. Marketplaces cannot afford to break
legal and regulatory requirements and Marketpay is the perfect
partner that allows you to concentrate on your core business.
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Marketpay value proposition
Good or service is offered on marketplace
Search is made on listing app or website
Deal is closed and escrow is placed through Marketpay
Pay-out is executed to sellers bank account
Delivery is confirmed and payment is released
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Marketpay architecture
LemonPay
Mobile payments
nubelo
Freelance Marketplace
Gasport
Petrol Payments
YoVoy
Events Organization
…
AuditLog
gEth Node
PayIn
Sabadell TPV
PayOut
OpenAPI
SQL BlockchainEthereum
Marketpay
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Blockchains allows an application developer to create a distributed database that can be read by anyone, but can
only be written to by consensus.
A blockchain is a ledger of records arranged in data batches called blocks that use cryptographic validation to link themselves together. Put simply, each block references and identifies the previous
block by a hashing function, forming an unbroken chain, hence the name.
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The blockchain is the flying car of finance and it has finally arrived
Many established enterprises are still
waiting for the perfect business justification for
investigating blockchain…
However, by doing that, they run the risk
of missing opportunities and
failing to identify the business risk of being
slow to adopt a disruptive
technology.
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Trends & The next big thing
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For a technology that’s still in its comparative youth, blockchain has become incredibly influential, incredibly
quickly.
World Economic Forum released a report calling blockchain technology a “mega-trend” that will shape society in the next
decade.
The WEF predicts that blockchains could store as much as 10 percent of global GDP by 2027.
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Blockchain technology, though still in emerging stages, is being considered as biggest disruptive technology in
the modern technology ecosystem
Technology trigger
Peak of inflated expectations
Trough of disillusionment
Slope of enlightment
Plateau of productivity
EXPE
CTAT
ION
S
TIME
Internet of things
Crypto currencies
Augmented reality
3D Printing
Predictive Analytics
Smart robots
Quantum computing
Autonomous vehicles
BLOCKCHAIN
Gartner, 2015. Hype Cycle for Emerging Technologies
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Blockchain is not going to emerge in industry as a single platform, as was once imagined, but as a series of different
blockchain platforms designed for different purposes.
https://goo.gl/5133lG Map of decentralized transaction ledgers
BTC/XBT ETH XRP Hyperledger
# of nodes 6,000 7,000 200 200
access Open Open Permissioned
Permissioned
blockTime 10m 14s 4s ~1ms
smartContracts Script Solidity Codius Go
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Marketpay auditLog
\ Given blockchain’s unique ability to audit transmissions and movements through log data, Marketpay reflects every transaction on the decentralized ledger, as a backup and anti-tampering measure.
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Marketpay auditLog
\ Blockchain will make all kinds of transactions transparent, more reliable, and easier to audit without centralized processing.
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LemonPay: escrows, while they can be conducted through a central agent, are increasingly being
conducted through a smart contract on the Ethereum blockchain controlled by several independent agents.
BuyerSeller
3rd party logistics
Smart Contract is just a phrase used
to describe computer code that
can facilitate the exchange of money, content, property, shares, or anything
of value.
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MarketPay tokens implement basic features in a standard way, so they are instantly compatible with the Ethereum
wallet and most of smart contracts.
Tokens in Blockchain can represent any fungible tradable
good: coins, loyalty points, gold
certificates, IOUs, in game items, etc.
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Blockchain pros
\ Internet of Value (IoV, Web 4.0), earlier adopterso Past: Web 1.0 (a one-way content distribution net) to Web 2.0 (an interactive social net)
and Web 3.0 (where smart applications monitor data and make decisions: Big Data, Data Science, NLProc and IoT).
o Future: Web 4.0, IoV:• Blockchain 1.0: a distributed ledger technology enabling the P2P exchange of digital
value.• Blockchain 2.0: smart contracts & DApps where the exchange of value of payment is
conditional upon a "cryptographic proof" based on the occurrence of an event.
\ Security: backup, immutability.
\ Cost-effective: payin, payout.
\ Openness/Transparency: auditLog & escrow Smart Contract.
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Blockchain cons
\ Why use a database that takes over 10 minutes to commit a transaction and can store only 80 bytes natively?
\ All market participants, regulators and other stakeholders must all be onboard and involved in order to ensure that the blockchain can make a smooth landing.
\ Blockchain's potential is endless, but the tech isn't mature. It comes with the territory when being earlier adopters:o Yet to come sharding features.o PoW is effective but absurd. => PoS, much better!o Cheap $1M/day on the electric bill to get a txRate of 0.5 tx/s => 25 US$/tx ?o Ethereum Smart Contract bugs > 100 per 1000 lines of code.
• industry average bugs is 15-50• Microsoft released code at 0.5 • 0 defects in 500,000 lines of code for NASA.
\ Cryptocurrency high volatility.
\ Income vs Expenses Analysis: https://goo.gl/rHo7fs
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Blockchain cons
\ Current Eth SC txFee: 0.0036216 Ether ($0.04) => 6 escrows, 1 US$.
\ Decentralization, no such a dream:o Hard forks imply Blockchain decentralization is not to take very seriously.o Just a bunch of developers are in control of Blockchain behaviour.o The bootstrap nodes are hard-coded.o Oracles in Ethereum are trusted parties embedding data into Blockchain.
\ Complex: development, deployment, and running. Example:o startEscrow(alice, bob, 100)o eth_call([{"from": "0xf28dafbfeb41bf32869c9d498da0d651d0206ed4", "to":
"0x27c042342c9ba937214117e11a4970a6145034cb", "value": "100000000000000000000", "gas": "22282", "gasPrice": "20000000000", "nonce": "0x100035", "data": " 0x3ccfe887000000000000000000000000a7e3c7c227c72a60e5a2f9912448fb1c21078769000000000000000000000000f28dafbfeb41bf32869c9d498da0d651d0206ed4 "}])
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Blockchain cons
\ Forks & upgrades => node outages for 24h or even 48h.
\ Internal SC transactions hard to track.
\ Security:o Private key lost or stolen, worst nightmare.o Cryptography resilience:
• Quantum pre-image attacks on SHA-3, https://arxiv.org/abs/1603.09383o The DAO attack: SC vulnerabilities.o DDOS attack => EIP150 Hardfork.
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Conclusions
\ So far marketpay.io has developed two Smart Contracts to serve marketplaces pulling our API. One writes the audit log for each wallet change, the other codes a real escrow transaction.
\ Nevertheless, both smart contracts are waiting for incumbent players to innovate: Banking partners to provide at least digital EUR and Service Providers (i.e. shipping) to sign directly as oracles.
\ Experts at a recent technology conference agreed that Blockchain has a bright future, but warned it may be a rocky ride until that future arrives.
\ It's far too early to proclaim any sort of winner in the development of a Blockchain stack. But Ethereum and Hyperledger are defining the right kinds of structure for the Blockchain industry to avoid the pitfalls that might limit its potential.
\ Startup lean projects allow the technology to be prototyped, piloted, and put into production without market-wide consensus as a prerequisite.
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Interesting use cases (multi-peer)
\ Academic Publishing without Journals: A distributed publication platform build on Ethereum and IPFS/Swarm could incentivize post-publication peer review.
\ Decentralized ISP: Every smartphone user has the possibility of creating a WiFi Hotspot with their phone. Data consumption in exchange of automatic payments.
\ Journalism trust system: a global decentralized unstoppable news source with reputation system for investigative journalist and payment directly to the reporter.
\ Provenance & supply chain: stakeholders query supply-chain records on the blockchain and trace them from raw materials through to finished product.
\ Crowdfunding: raising funds using sales of blockchain based digital assets, that are inherently smart contracts that have properties resembling stocks and bonds. Examples: Augur (5M US$), The DAO, Golem (rent your unused CPU/GPU).
\ Democracy: storing votes forever, creating records that can never be tampered with, elimination of multiple voting by individuals and personal convenience as intrinsic values that can be achieved by employing the Blockchain in voting.
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Less interesting, just one-peer
\ AuditLog: Use blockchain ledger as a backup or audit system.
\ Database/NoSQL: A cloud computer where programs have their own storage space that can't be modified by anything other than the program itself.
\ Outsourcing of business logic: Expressing business logic as smart contracts.
Why multi-peer?: Consider the process of buying a house, a complex transaction involving banks, attorneys, title companies, insurers, regulators, tax agencies and inspectors. They all maintain separate records, and it’s costly to verify and record each step. That’s why the average closing takes roughly 50 days. Blockchain offers a solution: a trusted, immutable digital ledger, visible to all participants, that shows every element of the transaction.
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Blockchain as a Service (BaaS) provides a rapid, low-cost, low-risk, and fast-deployment platform for organizations to catch the wave of next decade technology, Blockchain.
My marketplace to become decentralized
Blockchain
enabling the sharing economy
BaaS
Thanks!
Francisco Aréchaga
fran@marketpay.io+34 630 95 94 85
Juan Ignacio Pérez
juan@marketpay.io
+34 634 14 65 08
Ricardo Forn Palacin
ricard@marketpay.io+34 609 85 83 44
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