blockchain 101 orange county ethereum meetupfiles.meetup.com/18540801/ethereum meetup nov 14...

PROPRIETARY & CONFIDENTIAL © Hudson Morgan Investments, LLC. (HMI): This document is the property of HMI and may

be neither used, copied, reproduced, or communicated outside of HMI, except with the written permission of HMI

management. This document is uncontrolled when printed. Refer to electronic archive for current controlled revision.

BlockChain 101

By C. Rees Morgan II

Hudson Morgan BlockChain

Orange County EthereumMeetup




Presenter

2

C. Rees Morgan II Founder of Hudson Morgan Investments, LLC.

[email protected]

https://www.linkedin.com/in/creesmorganii

Hudson Morgan Development, LLC

Managing Member

Hudson Morgan Real Estate, LLC.

Managing Member

Hudson Morgan Land Holdings, LLC.

Managing Member

SelfTrainer3D, Inc. (3D Position Training Mobile

Application)

Chief Innovation Officer

www.SelfTrainer3D.com

Riding Hood Motorsports, LLC. (Home of “Little Red”)

Owner\Driver\Instructor

www.RidingHoodMotorSports.com

MembersAir (Jet Ownership)

Board and Advisory Positions:

www.MembersAir.com

SunTrust Bank

Region Board Member

Central Florida YMCA

Numerous Board Positions

MC2IT (Mission Valley Collage Innovation Center)

Founding Board Member

Altamaxx (Silicon Valley High Level Recruitment)

Board of Advisors

Daneco Group (SoCal High Level Recruitment)

Board Member




Hudson Morgan Blockchain - Co Founder

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Mr. Kang Hsu leads HMBlock Healthcare vertical. He has a PHD from Harvard with a

Master of Arts (MA), Cell/Cellular and Molecular Biology, Graduated Magna Cum Laude

with Highest Honors and earned a Bachelor of Arts (A.B.) degree in the Department of

Cellular and Developmental Biology (CDB), with a Specialization in Neuroscience.

Conducted research at Massachusetts Mental Hospital affiliated with Harvard Medical

School and at Enders Pediatric Research Laboratory at Boston Children's Hospital. He

was a Temporary Consultant to the Department of Aeronautics & Astronautics at the

Massachusetts Institute of Technology (MIT). A University of California Regent Scholar.

He currently is working on a secure virial sequencing matching application for doctors and

research scientist that will be the basis of HMBlock Healthcare Blockchain platform.




What you should learn from this presentation.

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Blockchain is not BitCoin

5




Blockchain ≠ BitCoin but BitCoin uses a Blockchain called BitCoin Blockchain

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Digital Currency

Not a coin at all

Digits\Data in a

software program

Digital Wallet Blockchain

Saying you don’t like Blockchain because you don’t like BitCoin

is like saying

I don’t like any applications that use a database.




Why there is skepticism around Bitcoin

7




Satoshi Nakamoto

8

Craig Wright




Why are people interested?

9

Disruptive – Revolutionary – Uber Affect – Game Changer




Venture Capital firms & strategic investors have invested approximately $1 billion to

Blockchain startups

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JP Morgan




Definition of a Blockchain

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A Blockchain is

So we are going to define it by what can

be done with it that was either hard or

could not be done prior to Blockchains.

Bla.. Bla.. Bla.




9 Factors of a Blockchain

12

Permanent

Immutable

Ledger

Distributed Ledger

Decentralized

Consensus

Consensus Algorithm

Smart Contract

Trust Shifting

Ownership

Proof of Origin

Providence

Uniqueness

No Double Spend




A Look at Blockchain

13




Ledger – Transaction – Data - Entry

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Ledger

• Line by line entry of a “Transaction”




Distributed

16




Who are you competitors?

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Distributed

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Every Node has a complete

full copy with every

transaction since the

beginning. Genesis coin.

South America could fall off the planet and the Blockchain remains up.

Africa falls

off the planet




Distributed

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Every Node has a complete

full copy with every

transaction since the start.

South America could fall off the planet and the blockchain remains up.

Africa falls

off the planet




Immutable

You can never write over

an existing entry. You

can only create a new

entry that corrects a

previous one.

CD-R =Write Once Read Many




Permanent record…

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It will be there until the last Node is turned off.




Data inside a company vs forever out in the world

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CEOIncrease Inventory

in Poland by

10,000 units or I

will fire you.

COO

Inside a company. Blockchain out in the world.

1,000 Units

10,000 Units

History of Record forever!

An audit would easily uncover fraud

Public

Yes Boss

right away




Cryptographic one way hash

23

C. Rees Morgan II

Private Key

C. Rees Morgan II

Public Key

Digest

0x98d2a323418

Encryption vs Hash?

You can De-Encrypt (go Back) but you cannot NOT De-Hash.

SHA-265 - The Secure Hash Algorithm is a family of cryptographic hash functions published by the National Institute

of Standards and Technology (NIST) as a U.S. Federal Information Processing Standard (FIPS),

https://en.wikipedia.org/wiki/Cryptographic_hash_function

https://en.wikipedia.org/wiki/National_Institute_of_Standards_and_Technology

https://en.wikipedia.org/wiki/United_States_of_America

https://en.wikipedia.org/wiki/Federal_Information_Processing_Standard




Cryptographic one-way hash (Math Public service announcement)

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Hash (a very simple example)

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Encrypt

Number

Divide # by 2

Add 5

Transverse #

Take the number 24

/2

24/2=12

+5

12+5=17

Transverse

71

24 encrypts to 71

Decrypt

Number

Divide # by 2

Add 5

Transverse #

Take the number 71

Transverse

17

-5

12

*2

24

71 Decrypts to 24

Take the number 24

/2

24/2=12

+5

12+5=17

Transverse

71

71+06:01:00=78

Hash

Number

Divide # by 2

Add 5

Transverse #

+(the current time)

Take the number 78

Subtract current time

78-?

De-Hash?

Number

Divide # by 2

Add 5

Transverse #

+(the current time)

24 Hash to 78 You Can’t DeHash!

Random

You don’t know

when it was

Hashed.




Provenance – Proof or Origin - Counterfeit

26




Tracking & Counterfeit

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Part SN

4393250001…

Digest

0x23e423s3234

0x4e231323134

+

Part SN

4393250002…

+

Digest

0x23e423s3234

0x4e231323134

+ Digest

0x98d2a323418

Hudson Morgan

Manufacturing

HMM

Public Key

HMM

Public Key




How Parts come together is a Blockchain.

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Part SN

4393250001…

Digest

0x23e423s3234

0x4e231323134

+

Part SN

4393250002…

+

Digest

0x23e423s3234

0x4e231323134+ Digest

0x98d2a323418

Hudson Morgan

Manufacturing

HMM

Public Key

HMM

Public Key




RFID or NFC

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RFID or NFC

30




Provenance

31




Who owns it?

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Consensus

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Incentive to a hack?

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In a Proof of Work Blockchain

If I own >51% of the value of a Blockchain needed to hack it

and I use it to hack the Blockchain then

the minute I hack the Blockchain the value is lost.




Parts of a Blockchain

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Wallet to Blockchain• Once the Block timer goes off ~<10 min (for the

BitCoing Blockchain). All collected ledger entries get

passed to the Blockchain




Consensus (Audience Participation)

36

Let’s build a Blockchain

1. Which Blockchain? Determines Consensus Algorithm used along with # of Nodes

2. Cryptographic Hashing used? (Lets use the one described earlier.)

Number

Divide # by 2

Add 5

Transverse #

3. What “Protocol” will we use.

4. Install “Our” Node

5. Bring on more Nodes (Don’t get a Hacker)

6. Collect data to load into the Blockchain

Heart Rate

7. Load “Our Node”

8. Node Consensus

9. HACKER

substitutes invalid data

10. CONCENSUS Happens

11. Consensus is agreed upon

12. Data is hashed

13. Data is loaded Permanently into the Blockchain

Dr. Phil




Double Spend

37

Suppose two transactions spend the same input to the same block.

Bitcoin automatically rejects both transactions to prevent one Bitcoin

from going toward two separate ends. A similar rejection occurs if two

separate blocks receive inputs from the same Bitcoin source. Bitcoin

treats such circumstances as incidents of accounting fraud.

http://www.investopedia.com/ask/answers/032715/what-accounting-fraud.asp




9 Factors of a Blockchain

38

Permanent

Immutable

Ledger

Distributed Ledger

Decentralized

Consensus

Consensus Algorithm

Smart Contract

Trust Shifting

Ownership

Proof of Origin

Providence

Uniqueness

No Double Spend




Trust?

39

If I can agree that

once data is written into the Blockchain it is permanent and

that the Blockchain will have at least 1 copy still out there and

that you will only know it is me if I give you my key and

that no one owns it and

Understand that it would take more computing power and

precise timing than any one entity could ever own including the

largest data centers working together, a quantum computer, or

any government has; thus no bad actor could successfully hack

and change the data

THEN CAN I TRUST IT?




Thank you. Good night!

40




Smart Contracts

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Smart Contracts

42

Yes

No Yes

Send $5 from Account to Account.

Did collar progress thru route?

During allotted hours?

END




Smart Contracts

43

Oracle

Cryptlett




Cryplets

44

Cryptlets are off-chain code modules that are written in any language that can

execute within a secure, isolated, trusted container and is communicated with over

secure channels. Cryptlets can be used in SmartContracts and UTXO systems

when additional functionality or information is needed, upgrading the blockchain

“oracle” approach with a Cryptlet and CryptoDelegate or adaptor.




Lets go look at the top non-bitcoin Blockchain applications out today.

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Slock.it

46

https://youtu.be/GuF9aidFtKg




Storj.io

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https://storj.io/




Ascribe

48




Blockchain Notary

49




github

50




Dapps.ethercast.com

51




The Mega-Master Blockchain List

• I. Financial Instruments, Records and Models

• Currency

• Private equities

• Public equities

• Bonds

• Derivatives (futures, forwards, swaps, options and

more complex variations)

• Voting rights associated with any of the above

• Commodities

• Spending records

• Trading records

• Mortgage / loan records

• Servicing records

• Crowd-funding

• Micro-finance

• Micro-charity

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• II. Public Records

• Land titles

• Vehicle registries

• Business license

• Business incorporation / dissolution records

• Business ownership records

• Regulatory records

• Criminal records

• Passports

• Birth certificates

• Death certificates

• Voter IDs

• Voting

• Health / Safety Inspections

• Building permits

• Gun permits

• Forensic evidence

• Court records

• Voting records

• Non-profit records

• Government/non-profit accounting/transparency





• III. Private Records

• Contracts

• Signatures

• Wills

• Trusts

• Escrows

• GPS trails (personal)

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• IV. Other Semi-Public Records

• Degree

• Certifications

• Learning Outcomes

• Grades

• HR records (salary, performance reviews,

accomplishment)

• Medical records

• Accounting records

• Business transaction records

• Genome data

• GPS trails (institutional)

• Delivery records

• Arbitration

• V. Physical Asset Keys

• Home / apartment keys

• Vacation home / timeshare keys

• Hotel room keys

• Car keys

• Rental car keys

• Leased cars keys

• Locker keys

• Safety deposit box keys

• Package delivery (split key between delivery firm

and receiver)

• Betting records

• Fantasy sports records (!)





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• VI. Intangibles (?)

• Coupons

• Vouchers

• Reservations (restaurants, hotels, queues, etc)

• Movie tickets

• Patents

• Copyrights

• Trademarks

• Software licenses

• Videogame licenses

• Music/movie/book licenses (DRM)

• Domain names

• Online identities

• Proof of authorship / Proof of prior art

• VI. Other

• Documentary records (photos, audio, video)

• Data records (sports scores, temperature, etc)

• Sim Cards

• GPS network identity

• Gun unlock codes

• Weapons unlock codes

• Nuclear launch codes (!)

• Spam control (micro-payments for posting)




Blockchain developer

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Product Engineer

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Product Engineer

Product engineers at Hudson Morgan Blockchain are responsible for crafting a first-class developer experience for our platform. Their goal is to convey a complex system built on cryptography and distributed databases in a way that feels intuitive and inspires creativity. This means diving into frontend and backend code to build dashboards and other developer tools, as well as maintaining well-groomed APIs and documentation. It also includes creating prototypes that demonstrate how blockchain technology can enable a fundamentally new class of financial applications.

Candidates Need to have:Strong generalist programming ability. You learn quickly and strive for simplicity.A solid understanding of web application fundamentals. You can speak confidently about databases, application servers, browsers, and web security.Excellent communication skills. You speak and write with clarity, and have a high degree of empathy.Product instincts. You are eager to work alongside designers and PMs to produce the best user experience.Demonstrated ability to take ownership. You finish what you start and keep a high standard of quality.

It is nice, but not a requirement, to be familiar with:Ruby (and Rails)Frontend frameworks such as ReactUI/UX design toolsGoPostgres

We offer:Opportunity to work with smart teammates on ambitious technology that has concrete, real-world applicationsGenerous salary, equity, and benefitsA team culture that prioritizes inclusiveness and empathyExcellent work-life balance, including a flexible vacation policyA beautiful, tree-house style office in Hayes ValleyTeam lunch every dayGym/fitness reimbursements




Product Designers

57

Product Designers

Product designers are responsible for creating beautiful, usable, elegant interfaces for all the products surrounding our Platform. We believe that developers should love the tools they use, and we infuse that thinking into everything we create.

As a Product Designer you’ll write front-end code and collaborate closely with engineers across all of our customer-facing products.

You will:Take designs from napkin sketches to fully functional front-end interfacesDesign and prototype in both Sketch and codeCollaborate with Product Engineers to integrate with back-end codeLead and manage a variety of productsBe intimately concerned with the delicate balance between functionality, usability, and aestheticsCreate products and experiences that ours customers loveWrite code that your teammates love to work with

You have:Strong knowledge and experience with HTML, CSS/SASS, and JavaScriptExperience with large-scale, widely-used productsA fundamental understanding of how to make complex information easily understandable

You get excited by:Rapidly prototyping, iterating, and shippingInterfaces that wow without being over-designedSubtle details that take products from good to greatPassionate teammates who inspire you to do your best work

The technologies we use:Sketch, IllustratorHTML, CSS/SASS, JavaScriptResponsive web developmentjQuery and other web frameworks

Benefits:Work in a treehouse in Hayes Valley, San FranciscoFree lunch and boatloads of snacks and drinksCreate your ideal workstationCompetitive salary and equity packagesHealth, dental, and vision benefitsOpen vacation policy - we don't track daysRe-location supportPaid maternity and paternity leave401(k) plan




Ethereum BaaS - AZURE

58



management. This document is uncontrolled when printed. Refer to electronic archive for current controlled revision.59



management. This document is uncontrolled when printed. Refer to electronic archive for current controlled revision.60




Ethereum consortium network architecture on Azure

61




Building a Blockchain is really complicated? Not!

62




Ethereum consortium network architecture on Azure

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Self-Sovereign identity

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there’s a paradigm shift going on here, “going from the Facebooks

of the world, which make lots of money on our identity, to what

should be instead a world where we each have a self-sovereign

identity. We own a canonical persona with attributes and

attestations. When you sign into Facebook today, the company

owns your identity. But instead, if we own our own identity we could

get paid if we choose to look at an ad, for example. This is the

critical next point on the evolution of the Internet.”

You

Andrew KeysConsensus Head of Global Business Development




Expert Panel

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