what’s next after icos? blockchain and smart contracts · 2018. 6. 30. · bitcoin was started in...
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ICA JapanJune 26, 2018
Blockchain and Smart ContractsWhat’s next after ICOs?
Jeff Wentworth, [email protected]
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Curvegrid
Building a blockchain application server Established May 2017 in Tokyo, Japan
Jeff Wentworth, Co-founderPreviously Vice President in Storage Engineering at Goldman Sachs, built a data migration system that moved more than 2 petabytes of data.
William Metcalfe, Co-founderFormer CTO at Gilt Japan and early employee in NYC, built systems to support a user base that grew from zero to 9 million.
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AgendaIntroduction to blockchain
Why is blockchain important?
Current adoption and sentiment
What’s next: capital raising, securities settlement and clearing, trade finance, insurance, banking the unbanked, identity, document attestation, ...
Blockchain and AI
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Two page overview of blockchainA blockchain is a database that’s distributed amongst thousands of participants.Participants can transact securely over the Internet without trusting one another.Bitcoin was started in 2009 and $3 trillion Bitcoin is now traded every year.
Alice
Bob1 Bitcoin
Verify
Alice and Bob don’t have to trust each other because they trust the Bitcoin blockchain.
BVerify
Verify
Verify
Alice sends Bob 1 Bitcoin over the Internet while all the other participants verify the transaction.
5Pay Bob 1 Ether every monthfor 12 months
These complex transactions are actually apps or “smart contracts” that run on the blockchain. A “token” is a type of smart contract.
Two page overview of blockchain (Cont.)Blockchain works because of math and cryptography, so a blockchain’s currency is called a cryptocurrency.Ethereum is a newer blockchain. Started in 2015, $850 billion worth of its cryptocurrency, Ether, is traded every year.Ethereum added the ability to perform complex transactions.
Alice Bob
Hold payment unless Bob provides a signed invoice by the 12th of the monthsmart contract
or token
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Two Significant Blockchains: Bitcoin and Ethereum
Bitcoin Ethereum
Introduced 2009 2015
Exchanging Money ✓ ✓
Abstract Computing ✓
Smart Contracts ✓
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Transactions are grouped together into blocks. Blocks are appended to the ledger.
Introduction to the Ethereum blockchain
Block Transaction Account Debit Credit
12938 1 Alice 2,000 Ξ
Bob 2,000 Ξ
2 Carl 1,500 Ξ
Diana 1,500 Ξ
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Introduction to the Ethereum blockchain
Block Transaction Account Debit Credit
6054 1 contract Wallet { ...
function remit(address _recipient, bytes32 _pwHash, uint _timeout) public payable returns (bool success) {
trackedBalance = msg.value;remitter = msg.sender;recipient = _recipient;pwHash = _pwHash;deadline = now + _timeout;
return true;}
...}
Wallet is a computer program that was uploaded to, and runs on, the Ethereum blockchain.
remit() is one of the functions that Wallet can
perform.
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One Application of Blockchain: Crypto TokensPrivate currency with rules
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Think of coins as a platform’s core currency
Coins (Platforms) Tokens
OmiseGo
Tether
EOS
Ardor
TenX
Bitcoin
Ethereum
Ripple
Bitcoin Cash
Litecoin
Source: CoinMarketCap, https://coinmarketcap.com/tokens/, Oct 2017
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Tokens are built on top of a platform
Coins (Platforms) Tokens
OmiseGo
Tether
EOS
Ardor
TenX
Bitcoin
Ethereum
Ripple
Bitcoin Cash
Litecoin
Source: CoinMarketCap, https://coinmarketcap.com/tokens/, Oct 2017
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Remember Smart Contracts?
Block Transaction Account Debit Credit
6054 1 contract UsefulToken { ...
function balanceOf (address _owner) returns (uint balance) {return balances[_owner];
}
function transfer (address _to, uint _value) {balances[msg.sender] = balances[msg.sender].sub(_value);balances[_to] = balances[_to].add(_value);
} ...}
The computer code within UsefulToken governs the creation, destruction, and transfer rules of the token.
Subtract from “my” balance on the subledger of UsefulToken balances, and add to someone else’s.
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Token subledger within larger Ethereum ledger
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Token subledger within larger Ethereum ledger
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Why is blockchain important?Compare with the fees and
overhead of... Fast transactions, low fees : Flat fee of $0.10 to send any amount of money globally in seconds.
Complex transactions :Stocks, bonds, futures, real estate contracts, insurance, etc. No middle man. Low fees. Fast confirmation and clearing.
The blockchain acts as a financial escrow service ;Transactions between people who don’t have to trust each other.
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Market Opportunities
Fast transactions, low fees : Flat fee of $0.10 to send any amount of money globally in seconds.
Complex transactions :Stocks, bonds, futures, real estate contracts, insurance, etc. No middle man. Low fees. Fast confirmation and clearing.
The blockchain acts as a financial escrow service ;Transactions between people who don’t have to trust each other.
Businesses will start to take advantage of the blockchain in the areas of finance, remittance, trade finance, contracts, asset tracking, logistics and more.
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Initial Coin Offerings (ICOs)
Source: https://www.cbinsights.com/research/blockchain-vc-ico-funding/
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Source: https://www.gartner.com/newsroom/id/3873790, May 2018
Current Adoption and Sentiment
Only 1 percent of CIOs indicated any kind of blockchain adoption within their organizations, and only 8 percent of CIOs were in short-term planning or active experimentation with blockchain, according to Gartner's 2018 CIO Survey. Furthermore, 77 percent of CIOs surveyed said their organization has no interest in the technology and/or no action planned to investigate or develop it.
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AgendaIntroduction to blockchain
Why is blockchain important?
Current adoption and sentiment
What’s next: capital raising, securities settlement and clearing, trade finance, insurance, banking the unbanked, identity, document attestation, ...
Blockchain and AI
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What’s Next: ICOs ⇒ Raising Capital
Source: https://www.pwc.ch/ico, 2018-06-26
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What’s Next: Banking
Source: https://www.cbinsights.com/research/blockchain-disrupting-banking/?utm_source=CB+Insights+Newsletter&utm_campaign=aa617392f7-Top_Research_Briefs_02_10_2018&utm_medium=email&utm_term=0_9dc0513989-aa617392f7-89367521
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What’s Next: Securities Settlement and Clearing
Source: Exchange data, Curvegrid
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What’s Next: Securities Settlement and Clearing
Source: Exchange data, Curvegrid
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What’s Next: Securities Settlement and Clearing
Source: Exchange data, Curvegrid
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What’s Next: Securities Settlement and Clearing
Source: forkdelta.github.io
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What’s Next: Securities Settlement and Clearing
Source: etherscan.io
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What’s Next: Trade Finance
Source: https://www.cnbc.com/2018/05/14/hsbc-makes-worlds-first-trade-finance-transaction-using-blockchain.html; http://www.cib.db.com/insights-and-initiatives/flow/trade_finance_and_the_blockchain_three_essential_case_studies.htm
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What’s Next: Insurance
Source: https://www.cbinsights.com/research/blockchain-insurance-disruption/
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What’s Next: Banking the Unbanked, Self-Sovereign Identity
Source: https://insight.wfp.org/what-is-blockchain-and-how-is-it-connected-to-fighting-hunger-7f1b42da9fe
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What’s Next: Document Attestation
Source: https://www.docusign.com/products/blockchain
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Blockchain and Artificial Intelligence (AI)
Source: https://medium.com/@Francesco_AI/the-convergence-of-ai-and-blockchain-whats-the-deal-60c618e3acccImage Credit: Phonlamai Photo/Shutterstock, https://www.shutterstock.com/g/PhonlamaiPhoto