Blockchain Claire Vishik (Mic Bowman) General perceptions - - PowerPoint PPT Presentation

Industry Views on Blockchain

Claire Vishik (Mic Bowman)

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General perceptions

“Blockchain is the most disruptive invention since

the Internet itself” (Digital Doughnut)

• Internet was a major disruption, but finance was behind

– In the US, by 1999, only 20% of the banks were offering online banking

• Even now, post-trade reconciliation and settlement takes 3-30

days

– And still involves exchanging spreadsheets sometimes

• Finance didn’t anticipate blockchain

– In 2014, issues such as mobile check capture and branch

• ptimization were recognized as key priorities in finance surveys

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Modern finance, archaic technology

• Both threat and opportunity for finance
• Applications available in

– E-Government – Real Estate – Enterprise – IoT – Storage – Identity – Many more

• Startup space is very active

– E.g., Nexus labs have a database of 300 early stage startups in Europe

• The number of events is growing

– Several in The Hague area only in the course of the next two weeks

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Blockchain expansion

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DLT Today Is Still Being Worked Out:

• There are too many unanswered questions about

validation mechanisms, scalability of transactions, complexity of transactions, number of participants, viability of privacy, and more. DLT Today Is Immature for Enterprise:

• No service level agreements, transaction rates are too

slow, anonymity is uncontrolled, endpoints are insecure, validation is (computationally or network-load)

• inefficient. And useful applications are still emerging.

The Upside Potential Is Substantial, But Untested

• In financial services alone, cost reduction for pre- and

post-trade settlement; syndicate lending could be very

• substantial. Instant auditability could improve many
• processes. In e-government, the same practices could

be broadly applied. Industry is looking at a wide range of applications Considering security, privacy, scalability, and standards, but the work is in its early stages..

Distributed Ledger Technology In One Slide

Summary

Distributed Ledger Technology, or DLT, is a set of communication protocols that enable administratively decentralized, replicated databases. It is currently being used as the basis for crypto-currencies. Initial alternative usages are being explored in financial services, around clearing and settlement. DLT is useful today, but potentially, DLT as a common protocol COULD have widely transformational impact. It would enable any trusted, decentralized transactions and transform all online transactions, although significant barriers to these usages remain.

• A disruptive technology & model
• Potentially broadly applicable (e.g., database replication)
• Potentially enabling new services and use cases
• Potentially a foundational technology
• Many similar reasons

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So, why is industry ICT industry interested in blockchain?

• Cryptocurrency exchanges

– E.g., Polonex, Coinbase, Coinsetter

• Brokerage services

– E.g, Volobit, Unocoin, Coinjar

• Software wallets

– E.g, Xapo, Coinkite, Coinprism

• Hardware wallets

– E.g., CASE, Keep Key

• Microtransactions solutions

– E.g., ProTip, ChangeTip

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So, what is out there?

• Investments, loans

– E.g., BitBond, Loanbase, Magnr

• Money (remittances) ervices

– E.g, CoinX, ABRA, CryptoPay

• Capital markets

– E.g, Chain, Clearmatics

• Trading platforms

– E.g., orderBook, Mirror

• Merchant Services

– E.g., CoinSimple, Pagos

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So, what is out there II?

• Compliance tools
• ATM
• Financial Data
• Payroll & insurance
• And a lot of work outside of the financial sector…

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So, what is out there III?

MODULAR DEVELOPMENT & TESTING: SAWTOOTH LAKE

• Sawtooth Lake is a research project…

– Rapid prototyping of new concepts (consensus, transactions, etc) – Measure “big O” performance of large deployments – Experiment with architectures and layering – Extensible, plug-and-play, …

• It is not…

– Production quality… though we are in the process of hardening it – Optimized for validator performance

• And… we have found it useful for building interesting applications

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Disclaimer

• The code is open sourced in NTG … code available here:
• https://github.com/intelledger
• Docs here:
• http://intelledger.github.io/
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Code

Sawtooth Lake Architecture

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Communication Journal Ledger

Facilitate communication between nodes Drive global consensus on an ordering of transaction ids Define and enforce semantics for transaction families

Sawtooth Lake Validator

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Communication

HTTP Endpoint Gossip Endpoint

Journal

Consensus Protocol

Ledger

Endpoint Registry Distributed Marketplace

Observer Transactor

HTTP interface for light clients Gossip protocols for inter-validator communication

More On The Journal

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Construct Block Validation Up-Call Incentive Up-Call Commit Block Handle Disputes Claim Block

Journal

Consensus Protocol

The consensus abstraction allows plug and play of both lottery and voting consensus protocols

More On The Ledger

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Distributed Marketplace Cached State Txn Validation Incentives

Ledger

Endpoint Registry Distributed Marketplace

Transaction families capture the semantics of a transaction and enforce compliance with the semantics

Distributed Marketplace Transaction Family

• Basic objects

– Participant (the “who”) – Assets (the “what”) – Holdings (“who” owns “what”)

• And one more…

– Offers to exchange

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• Transactions

– Register each kind of object – Exchange ownership of

• bjects

A Concrete Application for Testing Hypotheses About Application Viability and Value

Example: Football Exchange

A Marketplace Game Based on Trading Shares of Football Teams

• The league creates within the

Marketplace:

– assets for shares of each team and the game currency “mikels” – buyback offers for team shares equivalent to the points the team scores in games it wins

• The league gives new contestants

an initial set of team shares and some currency

• Contestants may sell or trade shares

with the league or with other players

• Contestant with the most currency at

the end wins

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The Marketplace Is General Enough To Exchange Arbitrary Value

Status

• Implemented in Python

– Crypto acceleration in C/C++ – JSON/CBOR message encoding – Emulated SGX support

– NOTE: “Real” SGX enclaves distributed separately

• Scale Tests

– Mean commit time/rate – Transaction rates – Number of validators – Network drop rates/latency

• Network Topologies

– Random Walk – Barablisi-Albert (scale-free)

• Consensus Protocols

– Proof of Processor (SGX) – Federated, Quorum-Voting

• Transaction Families

– Endpoint Registry (configuration) – IntegerKey (scale tests) – Digital Marketplace

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