Blockchain and AI creates a perfect storm for Distributed Intelligence.

1. 2
General Propose Chain
General Propose Chain
Blockchain and AI | Distributed Intelligence
Perfect Storm
Alternative Possibilities
• AI and encryption work very well together
• Blockchain can help us track, understand and explain decisions made by AI
• AI can manage blockchains more efficiently than humans
• Having a clear audit trail for AI: improve the trustworthiness of the data as well as of the models
• Increase AI effectiveness: Secure data sharing means more training data), and then better models
• Increase artificial trust: Bots to trust each other and increase machine-to-machine interaction
• Scalability: AI can introduce new decentralized learning systems such as federated learning
• Security: AI can bring security to blockchain via incredible progress made by machine learning
• Reduce Network Latency: Better efficiency and a lower energy consumption

2. Blockchain Introduction

3. What is Blockchain?
Blockchain is a secure, shared, distributed ledger
Secure
Shared
Distributed
Ledger

4. General Propose Chain
General Propose Chain
Blockchain | Multiple Chain Types
Blockchains
Alternative
blockchains (altchains)
(Decentralized
Transport)
(cryptocurrency) (cross-industry collaborative)
(cross-industry collaborative)
(FSI consortium)
open platform for
developers and devops
to build blockchain apps
(banking industry collaborative)
(Social News
Blockchain DB)
(IBM Open Blockchain )

5. Consortium
Woodgrove
Financial
Contoso
Bank
Northwind
Traders
Bank b
Insurance c
Investment
consortium c
Bank A
Blockchain
Location 1
Location 2
Location 3
Location 4
Department
A
Department
B
Public ConsortiumPrivate
• Many, unknown participants
• Writes by all participants
• Reads by all participants
• Consensus by Proof of Work
• Known participants from one organization
• Write permissions centralized
• Reads may be public or restricted
• Multiple algorithms for consensus
• Known participants from multiple
organizations
• Writes require consensus of several
participants
• Reads may be public or restricted
• Multiple algorithms for consensus
Public
blockchain
Persona
Woodgrove
Financial
Person B
Northwind
Traders
Bank 6
Bank 1
Consortium
6
Source: Ethereum blog by Vitalik Buterin https://blog.ethereum.org/author/vitalik-buterin/
Blockchain | Network Types

6. Artificial Intelligence Infuse

10. Azure + AI

14. Flexibility
Productivity

18. Rapid time to market with a
Productive AI Platform
Gain transformative insights with
Comprehensive Data
Innovate with confidence with
Enterprise-Proven Solutions

19. Intelligent Apps
Leverage AI to create the future
of business applications
Conversational Agents
Transform your engagements with
customers and employees
Business Processes
Transform critical business
processes with AI
95%
Of customer interactions
powered by AI bots by 2025
75%
Applications to include
AI by the end of this year
85%
Of enterprises using
AI by 2020
Enterprise scenarios for AI

20. General Propose Chain
General Propose Chain
Blockchain and AI | Distributed Intelligence
Perfect Storm
Alternative Possibilities
• AI and encryption work very well together
• Blockchain can help us track, understand and explain decisions made by AI
• AI can manage blockchains more efficiently than humans
• Having a clear audit trail for AI: improve the trustworthiness of the data as well as of the models
• Increase AI effectiveness: Secure data sharing means more training data), and then better models
• Increase artificial trust: Bots to trust each other and increase machine-to-machine interaction
• Scalability: AI can introduce new decentralized learning systems such as federated learning
• Security: AI can bring security to blockchain via incredible progress made by machine learning
• Reduce Network Latency: Better efficiency and a lower energy consumption

21. How does Blockchain work?

22. 1 Company A wants to transfer a value to Company B (i.e. digital
currently, a digital asset, a certificate, etc.).
3 Company A transaction is stored in the ledger as a block with other
transaction. The block has an unique ID, the transition time and the ID
of the previous block in the chain.
2 Company A uses a digital app to transfer the value to Company B. The
app stamps the transaction with Company A digital signature, and now
needs to be verified by blockchain.
4 The block containing Company A transaction is then broadcast to the
entire network to be verified in each node.
5 After the verification process, Company B receives the value, and all
the transaction history remains permanent and transparent available
for all the blockchain participants.

23. Evolution of Blockchain
Blockchain 1.0 – A simple ledger

24. That decentralizes data in a trustless environment
Traditional System
Centralized system
with stored ledger
Blockchain System
Distributed system
with distributed ledger
 Traditional ledgers are centralized and use third parties and middlemen to approve and record transactions
 Blockchain safely distributes ledgers across the entire network and does not require any middleman
 The technology maintains multiple replicas like P2P torrent file sharing

25. Basic blockchain to track financial transactions
In this example, Alex wants to send Katie $500 via a financial transaction blockchain system
Alex Katie Payment $500
Transaction (Tx)
From: Alex (0xf5e…)
To: Katie (0x992…)
Amount: 500
Digital signature
0x23e423s3234…
2. Transaction is confirmed
though mining.
Tx
Signature
Tx
Signature
Tx
Signature
Tx
SignatureTx
Signature
Tx
Signature
Tx
Signature
3. Confirmed transaction
gets pushed to network1. Transaction information goes
through hash functions (to secure
it as well as create a time stamp)

26. Evolution of Blockchain
Smart Contracts are unable to access external data or events based on time or market conditions. Calling code or
data outside of a Smart Contract or blockchain breaks the general trust barrier and authenticity of transactions.
Cryptlets will allow the blockchain to access external data securely, while maintaining the integrity of the blockchain.
Blockchain 2.0 – Introducing Smart Contracts

27. Traditional Contract Deployed to Nodes
Blockchain 2.0 | Smart Contracts

28. PRODUCER
Food Processor
Milk producer supplies Milk to
Food Processing Company
SMART CONTRACT
IoT Enabled
The package has to be
maintained at :
Temperature < 10º C
Humidity < 65%
The terms of shipping are
registered using a smart
contract on the Blockchain
Origin
8ºC
60% Warehouse Carrier 2 Store
CARRIER 1
Warehouse
CARRIER 2
Retail Store
9ºC
64%
9ºC
64%
11ºC
66%
At various points in the journey, the IoT device from the package sends the Temperature & Humidity data which are recorded on the blockchain
SMART CONTRACT
UPDATED
11ºC
66%
The conditions of the contract
have been violated.
Carrier 3 is liable for penalty as
the temperature of the package
when it reached the retail store
was above the prescribed limit
Detailed Use case - Supply Chain with IoT and blockchain
The Food product is sealed in an
IoT enabled package for shipping
SHARED LEDGER
Blockchain IoT

29. Evolution of Blockchain
Smart Contracts are unable to access external data or events based on time or market conditions. Calling code or
data outside of a Smart Contract or blockchain breaks the general trust barrier and authenticity of transactions.
Cryptlets will allow the blockchain to access external data securely, while maintaining the integrity of the blockchain.
Blockchain 3.0 – Microsoft evolving the ledger to address the big problem

30. Blockchain 3.0 | State-of-the-art cryptlets innovation
 Blockchain 2.0 introduced the power of Smart Contracts…
 …but Smart Contracts are unable to access external data or events based on time or market conditions
₋ Calling code or data outside of a Smart Contract or blockchain breaks the general trust barrier and authenticity of
transactions
 Cryptlets will allow the blockchain to access external data securely, while maintaining the integrity of the blockchain
 Cryptlets are a Microsoft innovation and solve a significant hurdle to enterprise blockchain adoption
Property
0x117292138928
edc23dc21323c
Value
0x893423022ef8s92d1
223412dds321ac
Property
0x117292138928
edc23dc21323c
Value
0x893423022ef8s92d1
223412dds321ac
Code
Contract accountRegistry(mapping
(string=> address) accountMap;
function accountRegistry()(…
Property
0x117292138928
edc23dc21323c
Value
0x893423022ef8s92d1
223412dds321ac
Code
Contract accountRegistry(mapping
(string=> address) accountMap;
function accountRegistry()(…
Interest Rate
0x132945934528
asf0439dsa3x

31. 10%-30% of drugs sold in developing countries are
counterfeits.
80% of the counterfeit drugs consumed in the US come from
overseas.
Prescription drugs market is estimated at $900 billion
worldwide.
The global market for counterfeit drugs is $200 billion dollars.
The global market for counterfeit products is $460 billion
dollars.
More than 30% of counterfeit drugs do not contain any active
ingredients.
Real World Problem:
Counterfeit Pharmaceuticals

32. Solution: Two-Layer QR Code Label …
Before After
Top (red)
layer Bottom (yellow)
layer
Side View Top View Side View

33. Distributed Intelligence
Use Case Scenarios

36. Blockchain and AI For Social Good
The United Nations World Food
Programme (WFP) is deploying cutting-
edge blockchain technology to make cash-
based transfers faster, cheaper and more
secure.

37. www.azure.com
38

38. Azure Marketplace for Blockchain
39

39. Blockchain as a Service (BaaS)
40

40. Tenets
of our
BaaS
Strategy
FAIL FAST & CHEAP
MIX & MATCH
CREATE & INNOVATE
SHARE SOLUTIONS
PROVISION

41. TrustedProductive IntelligentHybrid
Azure. Cloud for all.

42. 50Azure
regions
Learn more:
Microsoft.com/datacenter

43. 44
SETUP BLOCKCHAIN NETWORK FOR PILOT OR TEST SCENARIO
How do you
get started?
START BUILDING OUT SCENARIOS AND APPS
LEARN FROM PILOT and DEVELOPMENT FOR BLOCKCHAIN
BLOCKCHAIN BUSINESS IDEATION WORKSHOP

44. You can download the presentation from LinkedIn
Nuri Cankaya
Microsoft