high level intro to blockchain

High Level intro to Blockchain

Konstantins Vasilenko

COO, Co-Founder @ Paybis.com

Board Member of Latvian Blockchain Association

k.vasilenko@paybis.com

What is Blockchain? What is Bitcoin?

A digital ledger used to record all

transactions made in bitcoin or another

cryptocurrency

Chronologically

Publicly

Permanently

Decentralized money (analogy)

Yap is a nation in the South Pacific,

living on a set of Islands

Rai stones – Used for exchange

circular stone disks that can be up to

3.5 m in diameter and weigh up to

4000 Kg!

Trading stones of this size is

difficult

Centralized Ledger

Write down every transaction in a book

called a ledger

Bookkeeper appointed

Alice pays Bob 10 lbs of Rai,

Alice goes to bookkeeper’s house and announces

the transaction.

Everything worked well for a while, but

gradually, problems appeared:

Fee’s, Availability of Bookkeeper,

Corruption

Centralization of Power

Decentralization and More Trust

“trustless”

Decided to find a new way

Every family would maintain its own ledger!

Alice pays Bob 10 lbs of Rai,

Alice announces the new transaction to all other

families.

Each family would then check their own ledger

No a single family had more power than any

other!

To Centralize or Decentralize?

What is Mining?

What is interesting in Blockchain?

The interesting things in Bitcoin Blockchain are:

It’s Open (Anyone can access it)

Immutable

No need to ask for any permission (Permissionless)

Borderless (like internet)

Neutral (race, religion, wealth agnostic)

Decentralized

Censorship resistant

Other Blockchains and Altcoins

1500+ and counting

Some are Currencies

Dash, Monero, Litecoins, Ripple, etc…

Some represent Company/Project Shares

Steem, Augur, Decent, Iconomi, etc…

Some are Platforms - Ethereum

Imagine Public Cloud for Programmers

Smart Contracts – legal contracts represented

by Code

Invest in Bitcoin? Altcoins? Blockchain?

Bitcoin! Maybe? 500’000$ by 2030? At your own Risk.

From 1500+, 90% are worthless or Scams (“Scamcoins”)

“Buy MEGA Coin, earn 100% daily, bla bla” - SCAM

Invest your time to understand it, get the skills,

understand industry, innovate, make a career or

startup, an opportunity for you as an individual

Types of Blockchains

Public blockchainAnyone can use it, send transactions, participate, explore the blockchain,

validate it.

Example: Bitcoin, Ethereum

Consortium blockchainControlled by a pre-selected set of nodes; for example consortium of 15

financial institutions, each operates a node. The right to read the blockchain

may be public, or restricted to the participants.

Example: R3

Private blockchainPermission management is kept centralized to one organization. Read

permissions may be public or restricted to an arbitrary extent.

Examples: Eris Industries, Multichain

Blockchain in Finance and Banking

The question remains, will Blockchain technology revolutionize

the finance and legal industries in the same way the Internet

changed the media industry, once and for all?

R3 (R3CEV.com) 80 of the world's leading financial institutions

and regulators joined

Use Cases:

Payments

KYC/AML & Records Management

Asset Management (“Bank coins”, e.g. Fedcoin, Cadcoin)

Smart Contracts (Automation of Legal Agreements, Automated Payments)

Lending, issuing letters of credit, factoring, export credit and insurance.

Blockchain in Public Sector

“The part of an economy that is controlled by the state.”

State Registers

Various Public Archives

Company registers

Various Government Datas

Distribution of grants

Land Registers

E-Residency

E-Health

Blockchain in Logistics & Supply Chain

The blockchain has the potential to transform the supply

chain and disrupt the way we produce, market, purchase

and consume our goods

Share your product’s journey and your business impact on

environment and society.

Follow the movement of pork in China with a blockchain.

Track mineral analysis done by outside vendors

identifying data on a million individual diamonds to a blockchain

to comply with regulations barring “blood diamond” products.

And many more areas

Crowdfunding (ICO’s, Decentralized Markets)

Governance (elections, polls)

File Storage

Prediction markets

Protection of intellectual property

Internet of Things (IoT)

Stock trading

Web 3.0?

Try out Blockchain

Hyperledger

open source cross-industry blockchain technologies hosted by The

Linux Foundation,

Open Chain, Multi Chain, Chain.com

Open source technologies for custom Public and Private Blockchains

Ethereum

Ethereum is a decentralized platform that runs smart contracts

Counterparty.io

open source, create own Crypto Currency, runs smart contracts

Blockcypher

Bitcoin Blockchain Web Services and API’s

Why Companies and Governments Invest

in Blockchain? Main Drivers:

Efficiency (e.g. Santader estimates $20Bn / year in savings)

New Businesses (e.g. digital trades between financial

institutions)

Ecosystem (e.g. removing redundant Ledgers between

banks, regulators, state orgs.)

Main Challenges:

Collaboration

Regulation

Integration

Hype?

Gartner:

blockchain will

come to be

"transformational"

across a variety of

industries, in 5-10

years away from

now

BLOCKCHAIN became an Industry by it self

Companies: We want Blockchain, red one please!

Consultants: Yes We Can! More $$$ please

Silicon Valley - goto random hotel, switch off lights, stand in front of mirror and say blockhain 3 times –

10 VC’s will jump out and throw millions of $$$ at you

Google Trends

We are Hiring!

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