bitsofproof tamas blummer
TRANSCRIPT
Enterprise Block Chain Software and Hardware Stack
Current uses and future development
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Vienna 3rd March 2015
Introduction
Founder: Tamas Blummer
Engineer, Financial Risk Manager
Quant Software Developer, Market Risk Consultant,
Vice President at Deutsche Bank 1996-2009at MSCI 2009-2012
Executive Director at Morgan Stanley 2012-2013
Company: bits of proof zrt.
Registered in 2013 in Budapest
Proven Developer of Bitcoin and
Block Chain Technology.
… see next slides.
Satoshi’s genius proof of concept
• P2P Network
• Block Chain
• Consensus
• Miner
• Wallet
• User Interface
• RPC Server
Enterprise Bitcoin Server
• Use Satoshi’s code as border router, ignoring all but its consensus building.
• Connect to border router via P2P (SPV) protocol.
• Build indexed and pruned block chain.
• Offer an API to client applications within the enterprise.
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A real-time audit able multi signature exchange
• Application server connects to Bitcoin network using the BOP API
• Custom Wallet stores segregated customer holding on multi signature (P2SH) addresses.
• Administrator and Manager work at distinct physical locations accessing the application server.
• Web tier connects to application server with a REST API.
A hardware protected Web-Wallet
• Application server connects to Bitcoin network using the BOP API
• Special purpose hardware holds private key
• Web tier connects to application server with a REST API.
The Bitcoin mine
• Geographically distributed Satoshi border router.
• Autonomous Data Center local control server assembling and distributing work.
• Local Time Series database of hardware measurements for diagnosis and predictive maintenance.
• Global aggregation of key measures to a dashboard.
• P&L history and explanation.
The Block Chain as Technology
Central Ledger
• bottleneck • expensive failover or single point of failure
Local Ledger
• fast but potentially out of sync
• expensive reconciliations
A new paradigm enabled by Proof of Work
• Fast local transaction processing
• Complete or pruned history
• Applicable to any transactional system
• Automated convergence
• Resistance against inside jobs
From Alt-Coin to a Block Chain Technology
• Work through the hard fork wish list
• Relax transaction level compatibility with other coins
• Keep block header compatibility to enable mining equipment reuse
• Make no compromise on
• support for a specific, well defined use case
• decentralization
• audit ability
• Coin value is the consequence of above properties.
Our next Project
prüf technologies TM ‹#›
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Business Plan / Feb 2015
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= “Chain of Custody” = New Billion Dollar Market.
Digital identity: - we give products a digital identity which two billion smartphone users and PC users can use to check their chain of custody for the goods they purchase.
Blockchain: - we secure chain of custody information in our SaaS-based system using blockchain and public key cryptology technology = the world’s first secure and irreversible audit trail for chain of custody available globally.
Promise: - brands are at their core = a promise to deliver. Chain of custody allows buyers to track goods from their vendors ensuring that brands deliver on their promise. Customers can police and help eliminate counterfeiting + grey marketing.
All markets: - our chain of custody technology can used for both regulated ( i.e., drugs ) and unregulated ( i.e., luxury goods ) markets.
Co-exist: - no major changes are needed in existing enterprise systems to empower our chain of custody. The smarter the barcodes a vendor uses the better the chain of custody information we can provide their customers.
Low cost: - we believe our SaaS-based chain of custody ledger accessible by any iOS or Android smartphone is the lowest cost chain of custody available globally.
Revenues: - we help generate multiple new revenue streams using chain of custody data.
prüf technologies inc. - take-aways
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Counterfeiting
Trust: • since 1990, world’s economy has gone global and increasingly on-line. • supply chains have not kept pace, i.e., counterfeiting products has exploded:
Global Counterfeiting of Products 2
$ Billion $ Billion 1. Prescription Drugs 200.0 7. Pesticides 5.8 2. Electronics 169.0 8. Cosmetics 3.0 3. Food 49.0 9. Aircraft Parts 2.0 4. Auto Parts 45.0 10. Weapons 1.8 5. Toys, Sporting Goods 40.5 11. Watches 1.0
6. Shoes, Clothing, Purses 24.1 Total 541.2
• major challenges exist for even highly regulated pharmaceutical products:
-34k illegal pharmacies operate online. 3 -40M US prescriptions are filled with counterfeit drugs. 4 -700k people killed annually by substandard TB + malaria treatments. 5 -2M counterfeit prostate cancer drugs dispensed to 25,000 UK patients. 6
Sources: See slide at end of presentation
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Current supply chain data flow is
one-way = no feedback.
With global supply chain + online sales growing
rapidly, counterfeiting and
grey market activities are increasing worldwide.
Today’s one-way supply chain data flow
Customers RetailersAftermarket Distributors Resellers
VendorsGlobal
counterfeiting + grey market activities
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Customers RetailersAftermarket
Global counterfeiting +
grey market activities
Distributors
Vendors
prüf two-way data flow = supply chain logical firewall
prüf enables two-way
conversations between vendors
and their distributors and customers by
logically protecting data in
the blockchain ledger using public key cryptology.
prüf chain of custody blockchain ledger
Resellers
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prüf chain of custody blockchain ( ledger ):
prüf: in-store use
public key
private key
product description
product fingerprint
NFC chip – or –
QR code **
prüfprüf uses public key cryptology: capture + retain relevant product
+ vendor data
prüf ledger accessible by two billion smart
phones.
digital signature
… …
** Lower data capacity bar codes can also be used with more limited functionality.
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Auto Parts
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Independent aftermarket channelsUS parts manufacturers
Unauthorized manufacturers
How $45B counterfeit products can enter a market
Will-Fit suppliers Parts jobbers / retail chains
Internet sites & mail order
Original vehicle manufacturers
Original equipment dealers
Unauthorized suppliers
International suppliers
Domestic suppliers
Domestic manufacturers
Distribution centers
Warehouse distributors Repair facilities Vehicle owners
Original equipment channels
Raw material or component suppliers
Master distributors / importers of record
Brokers
The US auto parts supply chain 7
Illegitimate supply chainLegitimate supply chain
Sources: see slide at end of presentation
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Go-to-market strategy: luxury goods
FY 2012 revenue in US $ billions
LVMH / France
Richmont / Suisse
Estée Lauder / USA
Luxottica / Italy
L’Oréal / France
Ralph Lauren / USA
Shiseido / Japan
Rolex / Suisse
Swatch Gr. / Suisse
$21.1
$12.4
$10.2
$9.1
$8.0
$7.2
$7.0
$5.5
$5.1
$8.3
0 5 10 15 20 25
World’s largest luxury goods vendors 10
Hermès / France
PVH / USA
Prada / Italy
Tiffany / USA
Coach / USA
$4.5
$4.4
$4.3
$3.8
$5.1
Kering / France
2015 2019 200
Luxury goods 11 / 12
Worldwide sales
In US$ billions
233
266
300
333
366
400
433
US$282B
Sources: see slide at end of presentation
US$405B
Growth rate = 2.5x inflation
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Conclusion: ! Both Europe and USA will be tracking pharmaceuticals at the item level within eight years. This is a huge undertaking and Europe will likely delay as the final rules are not published as of yet and the US decided to give the industry more time.
! Prüf ledger could be positioned as an integral part of any proposed solutions.
Laws Requiring Pharmaceutical Tracking
Europe: ESM / 2011: ! European Stakeholder Model: As per European Directive 2011/62/EU, a Pan-European pharmacy
system is being developed for deployment in 2018 to be operated on a non-profit basis: - Manufacturers will use tamper-proof packages and will apply serialized 2D bar codes including
the product code ( and possibly a national healthcare reimbursement number ), the batch/lot number, the expiry date and a randomized serial number for the bulk product.
- Distributors’ re-packaging requires process to be repeated with original information preserved. - Pharmacists be able to see whether the drugs had been dispensed before and could therefore
be a counterfeit product; they can check expiration date and whether there is a recall or other notice against the batch of drugs being dispensed.
! SecurPharm is German national system pilot starting Jan/13 - increased to +10M item-level serialized packs to +400 pharmacies, on voluntary basis to date.
! Implementation of the 2011 directive has been slow because final details are scheduled for 2015. when these final details are published then the three-year clock starts for implementation except for Italy, Belgium and Greece which will have nine years to implement changes. The most difficult process in this implementation is the serialization of product as it comes out of production.
! Overseen by the European Medicines Verification Organization ( EMVO ), a non-profit organization.
USA: DQSA/ 2013: ! Drug Quality & Security Act - Drugs will be labeled and tracked at the lot level ( not the unit, or
individual package, level ) beginning in January 2015, with staged increases in traceability capability throughout the supply chain until 2023 when unit level tracing will be mandatory. In Europe ( see below ) this is expected to be rolled out in 2018.
