blockchain & smart contracts under the hood...blockchain & smart contracts under the hood...

B lockcha in & Smar t Cont rac t s Under The Hood

KristofVerslypeSmalsResearch-smalsresearch.be

www.cryptov.net

Overheidscongres–15mei2018–Brussel

BlockchainisaboutTrust

2

BlockchainNetwork

RegistraEonoffacts EnforcementofrulesTransferofassets

Idea

3

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

Itransfer0,4BTCto

Ok!

Ok!

Ok!

0,4BTC→Bob

Alice

Charlie

Dave

0,4BTC→

0,4BTC→

0,4BTC→

Idea

4

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

Itransfer0,4BTCto

Ok!

Ok!

Ok!

0,4BTC→Bob

Alice

Charlie

Dave

0,4BTC→

0,4BTC→

0,4BTC→

Blockchain

AtomicEveryonewritestransacKoninhis/herappend-onlyspreadsheetornoone→Consensusmechanism

ValidOnlyvalidtransacKonsacceptedbythenetworkE.g.bobownsthemoney&didnotyetspentitpreviously

Secure&robustSystemsfuncKons,evenifpartofmembersofflineormalicious

RelaEvelyfast

Distributed

Blockchain

5

AtpredeterminedfrequencynewblockappendedwithmostrecenttransacKons

TransacKoninblockchaincannotberemoved

blockchaincontainsALLtransacKons

Blockchain=concatenaKonofblocks,whichcontaintransacKons

ManyenKKespossessthesamecopyoftheblockchain

Block51

Header

Block52

Header

Block53

Header Header

Block54

5,10BTC→

0,70BTC→

0,40BTC→

Idea

6

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

TransacEons

5,1BTC→

0,7BTC→

0,4BTC→Bob

Alice

Charlie

Dave

0,4BTC→

0,4BTC→

0,4BTC→

Pseudonyms&Keys

7

0,40BTC→ 0,40BTC→Not but

RequiredtodigitallysignatransacKoninthenameofthecorrespondingpseudonym

Network

8

BlockcreatorFullnodeLightnode

Blockchain

append-onlyBitcoinhistory

UTXO

RelevantinfoMostrecentstate

UTXO

UTXO

UTXO

UTXO

UTXOUTXO

UTXO

9

Permissionless Permissioned

Accessible&usablebywholeworld Extralayerforaccesscontrol

OLerveryinefficient Muchmoreefficient

Trustdistributed Trustdecentralized

Cryptocurrencyrequired Nocryptocurrencyrequired

Publ i c / open Enterpr i se / ConsorEum

Slower Faster(moretx/s,moreblocks/s)

BlockchainisaboutTrust

10

BlockchainNetwork

RegistraEonoffacts EnforcementofrulesTransferofassets

11

RegistraKonofFacts

VaccinaEon

IdenEtyDiplomaMarriage

Medicalrecords

TaxesSupplychainTracking

Drivinglicense

PoliEcalmandates

(Official)documents

History/Overview

Will

5f3bfa419c63be2a3a09adbd0630c51f645eb03abafcd5f2ad39637a306b4177

Will

12

RegistraKonofFacts

Will

Block51

Header

Block52

Header

Block53

Header Header

Block54

13

TransferofAssets

Tickets.bitDomainnames

Copyright

Bitcoin Monero Ethereum

Cryptocurrencies(Virtueleassets)

Untangibleassets

DiamondsCarsLandregistry

Tangibleassets

Electricity

EnforcementsofAgreements

14

ProcessingmedicalprescripEons

ElecEons

BlockingrentguaranteeCrowdfundingApplicaEon&Payment

ofsubsidies/benefits

SmartlocksTransportcondiEons

AgreementsbetweenparKesthatdonottrust eachother, withouttrusted intermediary

FlightDelayInsurance

PermissionsaccessPIIAucEon

SmartContracts

15

ContractAucKon{funcKonbid()funcKongetMoney()

HighestBid:ΞHighestBidder:Beneficiary:Charlie} bid(),20Ξ

getMoney()

bid(),10Ξ

20Ξ

02010

Bob

Alice

Charlie

Alice10Ξ

Bob

Canreceive,blockandspentvalue

NosingleenKtycaninfluencecorrectfuncKoning Deafandblind

ReacKve

Ether(Ξ)isthecryptocurrencyonEthereum

SmartContractBlockchain

16

contractc

Header

Block51

c.bid(),10Ξ

Header

Block52

Header

Block53

c.bid(),20Ξ

Header

c.getMoney()

Block54

ContractdeploytransacKon FuncKoninvoke

transacKon

Network

17

BlockcreatorValidaKng(full)nodeLightnode

Blockchain

Append-onlyHistoryofsmartcontracts

Smartcontract

ChangeablebyfuncKoncallsActualstateofsmartcontract

SmartContracts-Summarized

18

AutomaEngrules&enforcementofagreements

BetweenparEesthatdonotneedtotrusteachother100%

Withoutdependencyonasingle,intermediateparty

Privacy&ConfidenKality

19

Permissionless Permissioned

ParEcipantsonlyknownunderpseudonymOneparKcipantcanhavemulKplepseudonyms

Publ ic / open Enterpr i se / ConsorEum

OnlyparEcipantshaveaccesstoblockchain

EncrypEoncanhidedataintransacEons&smartcontractsforpartofthenetwork

Tradepla`ormswillbeobligedbyEuropetostronglylinkpseudonymstoidenEtyof

theircustomers.Youneedcryptocurrenciestopublishasmartcontractortointeractwithit

Everyonecaninspecttheblockchain

AccesscontrollayercanidenEfypseudonyms

DataintransacEons&smartcontractsforeveryonereadable

Notalldatanecessarilystoredontheblockchainitself

Remark:TheparKcipantsthatcollecKvelysecureasmartcontract,needaccesstothissmartcontractstate&codeandtotherelevanttransacKons

20hjps://www.theguardian.com/technology/2017/nov/08/cryptocurrency-300m-dollars-stolen-bug-ether

21

Permissionless PermissionedPubl ic / open Enterpr i se / ConsorEum

Howtoreducerisk?-  Developersneedproperbackground

Smartcontractcodelooksfamiliar,butbehavessomewhatdifferently.-  Minimizesmartcontractcode-  TesEngencodeverificaEon

FutureformalverificaKon

BugsinSmartContracts

SmartcontractmoreeasilyupdatableHard/impossibletoupdatesmartcontract

AbackercanbeeasilyidenEfiedHardertoidenEfyabacker

FutureFuncKonality

22hjp://www.the-blockchain.com/docs/Hyperledger%20Whitepaper.pdf

BlockchaininteracEon“HyperledgersKllrequiresanaddressingsystemthatallowstransacKonsononeledger to discover and uKlize appropriate transacKons and smart contracts(chaincode)onotherledgers.” FABRIC

BlockchaintruncaEonAper a voKng round, theoldest part of theblockchain that hasbecomedeadweight, can be collecKvely forgojen. This feature will help to keep theblockchainmanageable.

Twoexamplesofusefulfeaturesthatdonotyetexistincurrentblockchainpla`orms.However,theblockchaincommunityisworkingonit.

24

Dr.KristofVerslype

Researcher, advisor&speakerincrypto, privacy&blockchaintech

Qu e s E o n s & C o n t a c t

©BenjaminReay

@KristofVerslype

kristof.verslype@smals.be

be.linkedin.com/in/verslype

www.cryptov.net

www.smalsresearch.be

@SmalsResearch

www.smals.be

@Smals_ICT

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