Post on 21-Apr-2017
transcript
Bitcoin, Blockchain, Smart Contracts & Decentralized Autonomous Organizations:
The Future.
Sebastian Zontek
Deep.BI – real-time data streams analytics
Want to get free Whooper? ImageCredits:MSNBC
How to get free Whooper? Go to Arnhem, Netherlands
and pay with bitcoin! ImageCredits:BurgerKing
Other cryptocurrencies: • Namecoin • I/O Coin • NuBits
Bitcoin: cryptocurrency based on blockchain invented in 2008
ImageCredits:flickr.com/photos/aukirk/
I want this Whooper! How do I pay with bitcoin?
Example bitcoin wallet app
More than 100,000 merchants now accept bitcoin
Imagecredits:coinmap.org
Satoshi Nakamoto, bitcoin creator, still remains anonymous
Bitcoin does not have a central bank
Bitcoin is run by peer-to-peer network of nodes. It’s a kind of Decentralized Autonomous Organization (DAO).
ImageSource:bootstrapgo.prusac.com
Who maintains transaction history?
ImageCredits:ilovegraffiA.deMiners
How the miners are paid?
Every ~10 minutes a lucky one gets
~10,000 USD (25 bitcoins)
Imagecredits:JanSochor
What miners really do?
Once every ~10 min. miners collect a few hundred transactions and combine them in a "block". In order to mine a block and validate the transaction, miners compete to solve a difficult mathematical equation (a "hash function"). The miner that solves the equation first further processes the block and broadcasts this "proof-of-work" to the bitcoin network. The other miners check the proof-of-work and the validity of the transactions. If they approve, the winning miner gets a reward of 25 newly minted bitcoin, which is the incentive for miners to provide computing power. Adjusting the difficulty of the puzzle ensures that the supply of new bitcoins remains steady.
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ImageCredits:theanglergame.com
Other cryptocurrencies: • Namecoin • I/O Coin • NuBits
Bitcoin price and market
Market Cap: 15M BTC 6,5B USD
On avg. 120k transactions per day (~$75M exchanged)
Blockchain = distributed ledger
Immutable; an “append-only” database hardened against tampering and revision, even by its operators.
Blockchain = chain of blocks Block = set of transactions
transactions
Blocks created by Miners
How blockchain is constructed
Is blockchain technology useful in other than the bitcoin application?
Badly kept standard ledgers make troubles
Eviction of Mariana Izaguirre’s family due to disorder in the Property Institute in Honduras.
After many of such incidents PI have asked Factom, an American startup, to provide a prototype of a blockchain-based land registry.
ImageSource:RevistazoHonduras
Blockchain replaces trusted third party
Blockchain offers a way for people who do not know or trust each other to create a record of who owns what
that will compel the assent of everyone concerned. ImageCredits:AgnosAcPreachersKid
Blockchain is chain of being sure about things. It can thus be a registry
of anything worth tracking closely.
Smart Contract: any contract which is capable of executing or enforcing itself
The main purpose of designing smart contracts is to enable people to trade and do business with strangers, usually over the internet, without the need for a large
centralized authority site to act as a middleman. ImageSource:independent.co.uk
Land Luxury goods Digital rights
Cars Bonds People Loans Bets
…
Blockchain / smart contracts
applications
How the miners are paid?
Every ~10 minutes a lucky one gets
~10,000 USD (25 bitcoins)
More blockchain use cases
Source:letstalkpayments.com
Libertarians dream
A world, where more and more state regulations are replaced with private contracts between individuals—contracts which blockchain
based programming would make self-enforcing.
Problems & Risks
51% attack
Concentration of miner pools within single organizations (currently most come from China).
Controlling a majority of network hash rate gives a power to revise transaction history and prevent new
transactions from confirming.
Impact on environment through pointless computing
Miners solve 450 thousand trillion solutions per second, and this needs c.a. 40 terawatt-hours of energy,
almost two-thirds of what the 10m people in Los Angeles County get through.
Limited scalability through 1MB block size (~1400 transactions in one block)
Current blockchain can process max. 7 bitcoin transactions per second
compared to 1,736 Visa handles in America. Blocks could be made bigger; but bigger blocks would
take longer to propagate through the network, worsening the risks of blockchain forking.
And getting community-wide consensus how to solve these problems is hard…
Drop us an email to learn more about deep, real-time blockchain analysis:
blockchain@deep.bi
Follow us Twitter: @_DeepBI, @SebastianZontek
www.deep.bi