blockchain demystification
TRANSCRIPT
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BLOCKCHAINDEMYSTIFICATIONMr. BELLAJ BADR
THE DISRUPTIVE TECHNOLOGY
MCHAIN CTO
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By 2027, 10% of global GDP is likely to be stored on blockchain platforms.
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Blockchain technologies could reduce banks' infrastructural costs by $15-20bn a year by 2022. Santander
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Gartner’s Top 10 Strategic Technology Trends for 2017
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By 2025 : Tax collected for the first time by a government via a blockchainWEF
Blockchain has potential to save global financial industry up to $110bn, McKinsey ”
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WHY THE BLOCKCHAIN?
Understanding the problem is 1/2 of the solution
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WHY THE BLOCKCHAIN?
CHINA 800 AD 700 BC Ancient Lidya Turkey
October 1994, Stanford Federal Credit Union: Internet banking
CONTINUING THE INTERNET REVOLUTION
DIGITAL ERA DIGITALCURRENCY
Rai, or stone money
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Failure
Ecash‘1983-1998’
Failure
E-gold‘1996- 2007’
Failure
Liberty Reserve‘2006-2013’
WHY THE BLOCKCHAIN?
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WHY THEY FAILED
• CENTRAL AUTHORITY (SPOF)
• FRAUDS
• DOUBLE SPENDING PROBLEM?
WHY THE BLOCKCHAIN?
Currency issuance, transaction storage, fight frauds.
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CENTRAL
AUTHORITY
FRAUD
SPOF
VIRTUAL
CURRENCY
WHY THE BLOCKCHAIN?
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RESHAPE THE PROBLEM : VIRTUAL CURRENCY
UNSTOPPABLE• How to create an unstoppable cash system
without any Central authority?
TRUSTFULL• How to establish the trust in such system
if there is no authority behind?
UNFORGEABLE• How to avoid the double spending
problem?
SOLUTION 2008 BLOCKCHAIN
WHY THE BLOCKCHAIN?
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Failure
Ecash‘1983-1998’
Failure
E-gold‘1996- 2007’
Failure
Liberty Reserve‘2006-2013’
Success
Bit Gold
Success
Bitcoin‘Since 2008’
Designed in 98
WHY THE BLOCKCHAIN?
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WHAT IS THE BLOCKCHAIN?
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A SINGLE SOURCE OF TRUTH
WHAT IS THE BLOCKCHAIN?
Definition N1
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THE TRUST MACHINE
WHAT IS THE BLOCKCHAIN?
Definition N2
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Ledgers, the foundation of accounting, are as ancient as writing and money.
A DISTRIBUTED LEDGERWHAT IS THE BLOCKCHAIN?
Definition N3
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WHAT IS THE BLOCKCHAIN?
• A blockchain is a tamper-proof, shared digital ledger that records transactions(history) that take place between the peers in a peer-to-peer network.
• All the confirmed and validated transaction blocks are linked and chained from the beginning of the chain to the most current block, hence the name blockchain.
BLOCK CHAINDefinition N4
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In the Context of protocol stack, cryptocurrency is a blockchain service
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THE DIGITAL CURRENCY
CONSENSUS PROTOCOL
TRANSACTION PROTOCOL
THE LEDGER : SHARED DATA LAYER
GMAIL
SMTP – SIMPLE MAIL TRANSFER PROTOCOL
TCP/IP – TRANSMISSION CONTROL
PROTOCOL/INTERNET PROTOCOL
Application Layer
Application Protocol Layer
General Protocol Layer
HOW IT WORKS?
STACK VUE (Blockchain System):Definition N5
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FEATURES
DECENTRALIZED CONSENSUS
Ensure Consensus within a decentralized Network.
TRANSPARENCE & ANONYMITY
DATA is available to the participants.Users are anonymous
IMMUTABILITY
Data is stored for ever in the blockchain and can’t be altered
*The genesis blockchain
WHAT IS THE BLOCKCHAIN?
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HOW BLOCKCHAIN SYSTEMWORKS?
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INTERBANKSETTLEMENT
DEBIT CREDIT
Balance 100$
Transfer 100$
DEBIT CREDIT
Balance 200$
Balance 100$Transfer 100$
DEBIT BANK A’s ACCOUNT 100$
CREDIT BANK B’s ACCOUNT 100$
TRANSACTIONBA
HOW IT WORKS?
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N5545 N5546
Block validated by the network and added into the blockchain (updated)
TX+Signature
Transaction cryptographically signed and sent to the network Nodes
ADDRESS:
1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2
ANNONYME
Transaction is complete
N5547
Block processed(Mining Process)Verified and included in a block (timewindow)
TXj+Signature
TXi+Signature
N5547
HOW IT WORKS?
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HOW IT WORKS?
BLOCKCHAIN
SINGLE BLOCK
SINGLE TRANSACTION
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HOW IT WORKS?
LET’S DIVE DEEP
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MORE DETAILS
• 1 Vote = 1 CPU (Proof-of-work), Byzantine general problem.
• Only miners add Blocks (Data) to the blockchain.
• Everybody could become a miner.
• One miner is rewarded at time and its block is added to the blockchain.
HOW IT WORKS?
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The computing power of the Bitcoin network is 7468 times higher than the one of the cumulative 500 world supercomputers.
X7500
THE POWER OF DECENTRALISATIONHOW IT WORKS?
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THE POWER OF DECENTRALISATION
BTC HASH RATE : 3,576,533,297 GH/S
194 MH/S
HOW IT WORKS?
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A SINGLE SOURCE OF TRUTH
WHAT IS THE BLOCKCHAIN?
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$27,703,262,823Total Market Cap
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THE POWER OF DECENTRALISATION
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THE POWER OF DECENTRALISATION
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THE POWER OF DECENTRALISATION
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BENEFITS OF THE BLOCKCHAIN
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. EMPOWERED USERS
PROCESSINTEGRITY
DISINTERMEDIATION & TRUSTLESS
EXCHANGE
DURABILITY, RELIABILITY, &
LONGEVITY
HIGH DATA QUALITY
TRANSPARENCY & IMMUTABILITY
BLOCKCHAIN BENEFITS?
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ECOSYSTEM SIMPLIFICATION
COSTS REDUCTION
TIME REDUCTION
SMART CONTRACTS
BLOCKCHAIN BENEFITS?
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SMARTCONTRACT
“A smart contract is a program that runs on the blockchain
and has its correct execution enforced by the consensus protocol”
They enable trustless financial services like loans, micropayments, and more.
Get rid of intermediaries and third parties
BLOCKCHAIN BENEFITS?
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BLOCKCHAIN BENEFITS?
SMARTCONTRACT
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USE CASE :LETTER OF CREDITTRADE FINANCE
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CREDIT PERIOD OF 30 DAYS, 60 DAYS, 90 DAYS, 120 DAYS
USE CASE : LETTER OF CREDIT
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LETTER OF CREDIT AS SMART CONTRACT :• Accelerating payment and simplifying the creation
and delivery of trade payment documentation.
USE CASE : LETTER OF CREDIT
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Months to hours
No more Papers
USE CASE : LETTER OF CREDIT
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BLOCKCHAIN
ACCESS
CONTROL
AUTONOMOUS
PAYMENT
REAL ESTATE
INTELECTUEL
PROPRETY
TITLE RECORD
LENDING(p2p)PAYMENTS
TRADE
AGREEMENTS
ASSET EXCHANGE
DOCUMENT EXCHANGE
VOTING
DOCUMEREGIST
RATIONNTS
PERMITS
TELE-ATTORNEY
SERVICES
USE CASES : BLOCKCHAIN APPLICATIONS
SECURITIES REGISTRATION
EQUITY DERIVATIVES
MICRO FINANCE
SMART CITY
Know Your Customer
Anti Money Laundering
Management
REMITTANCE STOCK
EXCHANGE
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BLOCKCHAIN
STATE
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2016-2017
2018-2019 2020
EARLY ADOPTION
GROWTH MATURITY
BLOCKCHAIN STATE
EXPLORATION2013-2015
GLOBAL
BLOCKCHAINS
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TUNISIA2015, Tunisian poste adopted an internal blockchain system with cryptocurrency (E-dinar)
SENEGAL Introduce a Blockchain-Based National Digital Currency eCFA. Announced in 2016, the digital currency will be legal tender just as the current currency, CFA Franc. It will be introduced in all West Africa.
SOUTH AFRICA :Barclays Africa and its UK parent company Barclays plc completed the world’s first trade finance transaction using blockchain technology.South African Reserve Bank (SARB) plans to launch a blockchain-based digital version of the South African Rand
KENYA :Kenyan Government is implementing Blockchain-based education management system that would make it hard to forge academic certificate
NIGERIA :Nigerian government offers support to blockchain development group
BLOCKCHAIN STATE (AFRICA)
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PRIVATE
BLOCKCHAIN
PUBLIC
BLOCKCHAIN
PERMISSIONED
BLOCKCHAIN
PERMISSIONLESS
BLOCKCHAIN
BLOCKCHAIN STATE
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Nascent technology
Resolving challenges such as lack of standards transaction speed, the verification process, and data limits will be crucial in making blockchain widely applicable.
Uncertain regulatory status
Because modern currencies have always been created and regulated by national governments, blockchain and Bitcoin face a hurdle in widespread adoption by pre-existing financial institutions if its government regulation status remains unsettled.
Cost & volatility
Blockchain offers tremendous savings in transaction costs and time but the high initial capital costs could be a deterrent.
Control, security, and privacy
While solutions exist, including private or permissioned blockchains and strong encryption, there are still cyber security concerns that need to be addressed before the general public will entrust their personal data to a blockchain solution.
Integration concerns
Blockchain applications offer solutions that require significant changes to, or complete replacement of, existing systems. In order to make the switch, companies must strategize the transition.
Cultural adoption
Blockchain represents a complete shift to a decentralized network which requires the buy-in of its users and operators.
Scalability
Data inside a blockchain cannot be deleted.
CHALLENGES
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BLOCKCHAIN IS THE NEW DISRUPTOR
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DISRUPTION IS THE NEW BM
NEW TAXI NEW CINEMA NEW COMMUNICATION PROVIDER
NEW HOTEL NEW RETAILER
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NEXT IS ..
FINANCE
BANKS
INSURER(NBFI)
PSD2 – Disrupting Payments in Europe
INSURTECH
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TAKEAWAYS
BLOCKCHAIN IS AN ONGOING REVOLUTION
BLOCKCHAIN ESTABLISHES THE TRUST
BLOCKCHAIN IS NOT YET MATURE, BUT IN FAST DEVELOPEMENT.
BLOCKCHAIN IS FOR ANY DOMAIN
BLOCKCHAIN IS THREATENING ANY MIDDLEMAN ACTOR.
BLOCKCHAIN WILL BOOST ECONOMIC GROWTH AND PROSPERITY
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LET’SMAKE MOROCCO A HOTSPOT FOR BLOCKCHAIN INNOVATION