Blockchain Technology.ppt
- 7. • Wikipedia – “A distributed database that is used to maintain a continuously growing list of records, called blocks. Each block contains a timestamp and a link to a previous block”
- 8. Double spend conundrum • Double-spending is the result of successfully spending digital money more than once • Blockchain for bitcoin made it the first digital currency to solve the double spending problem without requiring a trusted administrator • Protects against double spending by verifying each transaction added and ensuring that the inputs for the transaction had not previously already been spent • Uses a decentralized system, where a consensus among nodes following the same protocol is substituted for a central authority
- 9. Characteristics of blockchain • Information held on a blockchain exists as a shared — and continually reconciled — distributed database • The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable • No centralized version of this information exists for a hacker to corrupt • Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet
- 10. Characteristics of blockchain • Decentralized nature prevents control by a single entity • Transactions are immutable (unable to be changed) and exist forever • The blockchain network lives in a state of consensus, one that automatically checks in with itself every ten minutes (new block creation) • Eliminate third party intermediaries/overhead costs to reduce transaction fees, in addition to settling transactions 24/7
- 12. How is the network powered? (Nodes) • Node – A computer connected to the blockchain network using a client that performs the task of validating and relaying transactions) gets a copy of the blockchain, which gets downloaded automatically upon joining the blockchain network • Every node is an “administrator” of the blockchain, and joins the network voluntarily (in this sense, the network is decentralized)
- 13. Why host a node? • Incentive - the chance of winning cryptocurrency (proof of work) • Nodes are said to be “mining” by solving computational puzzles and adding transaction records to the blockchain (fees) • Smart way to issue the currency (decentralized) and creates an incentive for more people to mine • Nodes use the blockchain to distinguish legitimate transactions from attempts to re-spend coins that have already been spent elsewhere
- 15. Bitcoin has been useful as a digital currency, but merely stands as a one-trick pony. An idea was envisioned for the blockchain to provide functionality far beyond currency. Enter Ethereum and Smart Contracts
- 16. The future is being built as we speak And it is being built on Ethereum
- 17. Build unstoppable applications • Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. • These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. • This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many things that have not been invented yet, all without a middle man or counterparty risk.
- 19. What are smart contracts? • Computer protocols that facilitate, verify, or enforce the negotiation or performance of a contract, or that make a contractual clause unnecessary • Help you exchange money, property, shares, or anything of value in a transparent, conflict-free way, while avoiding the services of a middleman • Define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations (code is law)
- 21. The disconnected nature of un-trusted systems manifests itself in the time required to fully close out transactions 21
- 22. With blockchains, the future of finance is embedded in business process everywhere. 22 # # # # # # Shipping Trade Finance Insurance Customs Distributor Production Purchase orders proof of demand that unlocks trade finance. Payment for shipping and insurance is automated. Tariff, tax & duty calculations, documents & payments are built into purchase agreements. Payments are automated into the purchase contract and triggered upon delivery.
- 23. And in every smart thing and industrial asset. 23 Maintenance • Automatically detect and purchase repair services Financing • Access tied to identity and payments • Value of the verified income stream User Fees • Billing & payments for rides Fractional Ownership • Why own a whole car if you only use part of it?
- 24. Now you have a platform with applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference capable of executing smart contracts. What do we do next? Let’s check out some DAPPS.
- 27. Etheroll – Provably fair dice game (investors act as the house)
- 30. IoT Markets Machines can be customers in machine-to-machine markets. Utilities, data storage, data usage, XaaS services, and APIs are all services that usually offer rate limits or subscription models because charging on a per-use basis is infeasible.With µRaiden, per-use charging finally becomes possible. Pay-per-Use Micropayments are becoming an increasingly attractive alternative to intrusive advertisement and subscription walls. µRaiden gives users the option to decide on a pay-per-use basis whether they would rather endure ads or pay for a premium experience. Customers would not need to engage in the commitment of a monthly subscription model.
- 31. Singapore Central Bank Reveals 3 New Blockchain Payments Prototypes The White House and EquifaxAgree: Social Security Numbers Should Go Ethereum’s Founder Struck a Deal with a Russian Bank to Create ‘Ethereum Russia’ United Nations Sends Aid to 10,000 Syrian Refugees Using Ethereum Blockchain MicrosoftAdds JPMorgan’s 'Quorum' Blockchain to Azure Platform Ethereum Enterprise Alliance Adds 86 New Including DTCC, State Street And InfosysMembers
- 37. Use Cases
- 38. Why AEP? • Green energy credits • Electric charging stations • Smart contract solutions to guarantee uptime • Retail based solutions to reduce costs
- 39. AEP ECO-Advantage • As an environmentally-friendly alternative to traditional electricity plans, we offer ECO-Advantage℠, which matches 100% of your electricity usage with national Green-e® Energy certified, wind Renewable Energy Certificates (RECs) • Match 100% of your usage with national Green-e Energy certified wind RECs • Same electricity service, one monthly bill from your local utility, no interruption of service or installation of additional equipment
- 40. Green energy credits created Green energy credits deducted Green credits tokenized as cryptocurrency FERC
- 41. Germany’s Energy Giant Launches 100s of Ethereum Based Electric Cars Charging Stations “Tomorrow 100s of EV Charging Assets all over Germany Blockchainified. E2E Product using asset-backed Crypto-EURO for payments,” before adding “our EV Charging assets will be on public ethereum blockchain and further assets across EU connected soon.” “By using a computer chip in the charging station, a smartphone app to communicate with the interface, and a blockchain to manage and record all of the payment and charging data, a fully automated, worldwide authentication, charging and billing solution with no middleman is created.”
- 42. Register car Download Deposit fiat Costs transferred from Share&Charge to station owner
- 43. Smart contract based trading solutions • Turbine is powered off atAEP plant, causing an energy shortage • Traders determine pricing for power and shortage is covered • Instead, use smart contracts to define pricing before an outage event When the outage event occurs, the smart contract executes with the agreed upon terms
- 44. • In a deregulated market, electricity retailers buy electricity at wholesale price (in 1 MWh increments) and then package and sell that electricity directly to consumers • Retailers are not responsible for powering customers directly, but are responsible for metering and billing usage • In addition to paying for generation, transmission, and distribution, end users also pay fees to their retailer • These costs are largely comprised of marketing, administration, and managing risk/compliance for bad debts and customer funds • This can (and often does) add up to quite a large percentage, as shown by the average price of electricity in various states in the following graph:
- 46. • Grid+ is not interested in managing user funds or in settling bad debts • Users prepay each month in dollars, which is tokenized on Ethereum as a dollar-backed stable coin • As a retailer, they have access to customers’ usage data, which gets updated every 15 minutes • Every 15 minutes they query a customer’s agent (which can be any device capable of making ECDSA signatures) for payment • The agent signs a message sending a small amount of money over a state channel and Grid+ takes a small fee from that transaction as a form of revenue
- 47. gridSMART and AEP Energy Credits • Tokenize user funds as a dollar backed stable coin • Customers pre-pay or link bank account to convert USD to AEP energy credits • gridSMART reads customer data every 15 minutes, deducting energy credits from customer wallets • Users are able to monitor their energy usage in 15 minute increments, allowing greater visibility of energy usage • AEP is insulated from bad debts and high-risk users through pre-pay model • App teams are able to share data with ease using the distributed database model Credits
- 48. Blockchains aren’t for everyone and they aren’t for every solution. Here is a five point test.
- 49. Traditionally, IT has been regarded as a cost center Using blockchain, companies will be able to drive profits through technology
- 50. 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