Resource Slides for Q&A

Ethereum hard fork• Why will DAO attack cause hard fork for Ethereum?• the inherent vulnerabilities in The DAO’s smart contract leaves the door open

to future attacks. Each child DAO created is an effective copy of the original, bringing with it all of the flaws contained within. It’s because of this that some are pushing for a rule change in the ethereum network.

• Effect of hard fork? it would allow developers to freeze funds taken from The DAO, and thus

secure funds until they can be recovered. the move threatens the integrity of the ethereum blockchain and the project as a whole.

Ethereum hard fork• How can the change happen?• Release new version for numerous client(Go,C+

+,Rust,Python,Java,Ruby,Haskell,JS, enforce upgrade of client• Enforced by new rule: DAO challenge response after an eth handshake

• What exactly is the change?• 35 files changed, including modifications to the configuration/genesis, p2p

networking, and EVM protocol.• E.g. necessary consensus modifications to header validation rules

Public vs private blockchainPublic Private

Access Open read/write access to database Permissioned read and/or write access to database

Speed Slower FasterSecurity Based on consensus algorithm Pre-approved participantsIdentity Anonymous/pseudonymous Known identitiesAsset Native assets Any assetPrivacy Data publicly available to whoever

connect to the blockchainPrivacy policy for data same as in traditional database

Transaction fee

Transaction fee required Completely free/inexpensive transactions

Immutability Secured by hashing power Secured by distributed consensusExamples Bitcoin, Ethereum, Hyperledger Ripple, Blockstream, Multichain

Smart contractPre-written logic(computer code)

Stored and replicated on a distributed storage platform(blockchain)

Execute/run by a network of computers(e.g. blockchain miners)

Result in ledger updates(e.g. cryptocurrency payment)______________________________________________________________

= General purpose computation takes place on blockchain

If blockchains give us distributed trustworthy storage, then smart contracts give us distributed trustworthy calculations.

Smart contract examples• Decentralized Twitter

• a decentralised microblogging service • provides basic Twitter-like functionality to

tweet messages of up to 160 characters.

• Decentralized Virtual World & Crypto-Real Estate• Ξtheria is a virtual world• players can own tiles, farm them for blocks,

and build things.

• Managing identity• plans to bring "ease and simplicity" to the

process of identification for businesses wishing to onboard new customers

Smart contract examples• Slock.it: IoT + Blockchain

• blockchain smart contract to do access control(control physical lock)

• Enable Rent, sell or share anything - without middlemen

https://www.youtube.com/watch?v=-Ht23KXic1k

Smart contract Good vs Bad

What’s good?• Express business logic as

computer program• Represent logic triggering event

as a message to the program• Use digital signatures to prove

who send the messages• Everything is transparent to

everyone in the blockchain

What’s bad?• Execution of every program for

every message on every blockchain node (global execution)• Works poorly for high transaction

throughput• Transaction order is critical,

unconfirmed transaction has no predictable outcome

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Cryptocurrencies = Cryptographic based digital money• Definition

• Digital money• Using cryptography functions to secure transactions• No centralized trusted party to operate the currency

• Characteristic• With digital signature to indicate ownership• Digital transaction made with owner’s signature• Everybody can verify ownership of crytocurrency, everyone can see transaction record of crytocurrency

• Not possible to double spend

• Who owns it?• Anyone could own cryptocurrency, with a digital wallet

• Who runs it?• The blockchain miners (A group of computers)

• Examples:• Bitcoin, Ether, Ripple, Colored coins

How to get cryptocurrency?• Purchase over an exchange• For Investors• Purchase with real world currency

• Be a miner and do mining• People with internet and hardware• Steps:

• Choose a cryptocurrency to mine(bitcoin, Ether, other altcoin: Litecoin, Dogecoin etc)• Setup wallet to keep your wealth• Download and install corresponding mining software• Configuration – join some mining pool• Run mining program, get cryptocurrency from rewards

How to get cryptocurrency?• Transfer• Someone transfer you their crytocurrency• Steps:

• Download an wallet application• Create account with the cryptocurrency• Expose your wallet address to the sender• Sender transfer cryptocurrency and you receive it.

Number of guesses(hashes) before you get a Block hash value?

1. The number of guesses increasing in time.2. Current value:

1.6*1018 hash/s * 10 min/block = 1.6*1018 hash/s * 600 sec/block = 9.6 * 1020 hash/block

Why Blockchain is begin with fintech? Other than the payment what does it do in the finance?

• Part 1: Blockchain is created to solve The Byzantine General’s Problem. Blockchain didn’t decided to start with Fintech, instead, Blockchain is born because of Fintech(people extract Blockchain idea from bitcoin).• Part 2: The things blockchain can do in the finance area• Virtual wallet / payments / exchange offering (Bitreserve, BitPesa) • Process payments (BitPay, Coinbase) • Clearing and settlement solutions (Hyperledger, Serica) • Developing and offering cryptocurrency denominated products (SolidX,

Tinker)