What is blockchain? How does it work? What are smart contracts? What is its impact on the Notary?

1. BLOCKNOTARY
PATRICE KERREMANS & DANILA SMOLKO

2. INTRO
THE TEAM
Danila Smolko Patrice Kerremans
Geert Vermeiren Pat(rick) Boens

3. TEXT
▸ Bitcoin & Blockchain (including Payment Demo)
▸ Ethereum
▸ Hyperledger
▸ Smart Contracts (including cases)
▸ Notary impacts (including cases)

4. SHORT INTRODUCTION
https://www.youtube.com/watch?v=YIVAluSL9SU

5. Bitcoin is the tip of the Ice berg
The blockchain can be used for any property transaction
The Blockchain is the single source of truth
It is distributed and doesn’t require middlemen
It is virtually unhackable due to this distributed nature
SUMMARIZED

6. INTERNET
MOBILE
CLOUD
BLOCKCHAIN

7. BITCOIN &
BLOCKCHAIN

8. A PURELY PEER-TO-PEER VERSION OF
ELECTRONIC CASH [WHICH] WOULD ALLOW
ONLINE PAYMENTS TO BE SENT DIRECTLY
FROM ONE PARTY TO ANOTHER WITHOUT
GOING THROUGH A FINANCIAL INSTITUTION.
2008 - Satoshi Nakamoto - whitepaper
INTRODUCTION OF THE BITCOIN CONCEPT

10. THE BLOCK CHAIN IS …
A chain of blocks (duh!)
Blocks containing transactions and referencing previous blocks…
Genesis Block

11. THE TIMES 03/JAN/2009
CHANCELLOR ON BRINK
OF SECOND BAILOUT FOR
BANKS
BitCoin Genesis Block’s Coinbase Parameter
THE FAMOUS BITCOIN GENESIS BLOCK

12. SOLVING A VERY DIFFICULT PUZZLE
PROOF OF WORK
Find a hash that starts with a number of leading zeros
The acting of searching for this nonce is called mining
The first miner to find this nonce is rewarded new
bitcoins that are created by
adding a Coinable Transaction to the block.
Coinbase Transaction = reward
Regular Transactions

13. MINER
MINER
PARTY
PARTY
PARTY
PARTY
A
C
0000000000e304476c788cd474fb579a

14. TEXT
FINDING THIS APPROPRIATE HASH = MINING Find the hash with enough zeroes = mining

15. MINING BITCOINS
THE ALGORITHM ADAPTS TO MAKE MINING ONE BLOCK TO TAKE APPROXIMATELY
10
MIN

16. WHAT IS BLOCKCHAIN
NOT CENTRALIZED, NOT DECENTRALIZED, DISTRIBUTED
Every node in the network has a full copy of the entire blockchain

17. TEXT
THE BLOCKCHAIN
Distributed
No central, nor decentralized power(s) has control over the
system
Immutable
means that something is unchanging over time or unable to
be changed
Traceable
Since all transactions are timestamped and linked to
previous transactions they can be traced & audited
public / pseudo anonymous
Anyone can join the blockchain and use it to submit
transactions. No KYC -yet- so some privacy
Crypto-key based extremely secure
Smart Contracts promising technology

18. WALLET
THE PLAYERS
U
BLOCK
CHAIN
WALLET
PROVIDER
WALLET
PROVIDER
WALLET
PROVIDER
COIN
EXCHANGE
COIN
EXCHANGE
U
U
WALLET
Users can have their
wallet managed at a
wallet provider and then
buy and sell Coins via a
Coin exchange (typically
for a fee)
Some exchanges all
serve as wallet providers
User can exchange
Coins in their managed
wallet with other users
User can also manage their
own wallets in their own
devices (but then the user
needs to manage their private
keys as well)
MINER
MINER
MINER
MINER

19. TEXT

20. PAYMENT
DEMO

21. II € €

23. THE BYZANTINE GENERALS PROBLEM

24. THE PROBLEM EXPLAINED
A1 and A2 have not yet agreed on a attack time
A2 only attacks if A1 attacks and vice-versa
A1 nor A2will perish if they attack B alone
A1 and A2 can only send messages with messengers that have to go
through the valley
RULES
Of the Fight

25. GENERAL
IMPOSSIBILITY: IN
GENERAL, NO
SOLUTIONS WITH
FEWER THAN 3M+1
GENERALS CAN COPE
WITH M TRAITORS

26. SOLUTION
NAKAMOTO ALGORITHM
by having a large enough amount of generals (miners)
fight (mine) a heavy terrain (puzzle) should begged
enough a deterrent for traitors (hackers)

27. OTHER
BLOCKCHAINS

28. ETHEREUM

29. ETHEREUM
BETTER THAN BITCOIN (?)
▸ In Ethereum the block time is set to twelve seconds compared to Bitcoins 10 minutes. This allows for faster transaction times. Ethereum does this by
using the Ghost protocol.
▸ Ethereum has a slightly different economic model than Bitcoin – Bitcoin block rewards halve every 4 years whilst Ethereum releases the same amount
of Ether each year ad infinitum.
▸ Ethereum has a different method for costing transactions depending on their computational complexity, bandwidth use and storage needs. Bitcoin
transactions compete equally with each other. This is called Gas in Ethereum and is limited per block whilst in Bitcoin it is limited by the block size.
▸ Ethereum has its own Turing complete internal code... a Turing complete code means that given enough computing power and enough time...
anything can be calculated. With Bitcoin there is not this form of flexibility.
▸ Ethereum was crowd funded whilst Bitcoin was released and early miners own most of the coins that will ever be mined. With Ethereum 50% of the
coins will be owned by miners in year five.
▸ Ethereum discourages centralized pool mining through its Ghost protocol rewarding stale blocks. There is no advantage to being in a pool in terms
of block propagation.
▸ Ethereum uses a memory hard hashing algorithm called Ethash that mitigates against the use of ASICS, and encourages decentralised mining by
individuals using their GPU’s.
https://www.cryptocompare.com/coins/guides/why-is-ethereum-different-to-bitcoin/

30. CRYPTOCURRENCY
ETHEREUM’S CURRENCY IS CALLED
ETHER

31. HYPERLEDGER

32. HYPERLEDGER (OR THE HYPERLEDGER PROJECT) IS A CROSS-INDUSTRY
COLLABORATIVE EFFORT, STARTED IN DECEMBER 2015 BY THE LINUX
FOUNDATION, TO SUPPORT BLOCKCHAIN-BASED DISTRIBUTED LEDGERS.
IT IS FOCUSED ON LEDGERS DESIGNED TO SUPPORT GLOBAL BUSINESS
TRANSACTIONS, INCLUDING MAJOR TECHNOLOGICAL, FINANCIAL, AND
SUPPLY CHAIN COMPANIES, WITH THE GOAL OF IMPROVING MANY
ASPECTS OF PERFORMANCE AND RELIABILITY.
wikipedia
HYPERLEDGER

33. R3

34. R3 (R3CEV LLC) IS A BLOCKCHAIN TECHNOLOGY
COMPANY. IT LEADS A CONSORTIUM OF 45
FINANCIAL COMPANIES IN RESEARCH AND
DEVELOPMENT OF BLOCKCHAIN USAGE IN THE
FINANCIAL SYSTEM.
wikipedia
R3

35. COMPARISON

36. COMPARISON
HyperLedger Ethereum Bitcoin
Description
General Purpose
Blockchain
General Purpose
Blockchain
Transactions
Blockchain
Governance Linux Foundation Ethereum Developers Bitcoin Developers
Currency none Ether Bitcoin
Mining Reward none Ether Bitcoin
Consensus Network Pluggable Mining Mining
Network Private or Public Public or Private Public
Privacy Open to Private Open Open
Smart Contracts
Multiple
Programming languages
Solidity
Programming Language
Not baked in

37. SMART
CONTRACTS

38. Firm A Firm B

39. SMART CONTRACT
IF (CONDITIONS ARE MET) THEN
EXECUTE THESE TERMS
The use of code and a blockchain to execute logic if certain conditions are met.
Execution is not “forgotten”, it is automatic.
No discussion about the conditions or terms,
since code is unambiguous.
You still need lawyers to make sure the rules
are properly defined.
Faster and cheaper.

40. THE PHRASE "SMART CONTRACTS" WAS
COINED BY LEGAL THEORIST COMPUTER
SCIENTIST NICK SZABO IN 1994*
wikipedia
SMART CONTRACTS
* the idea was around since the 70s, though

42. SMART CONTRACT TEMPLATES

45. A DECENTRALIZED AUTONOMOUS ORGANIZATION
THAT IS RUN THROUGH RULES ENCODED AS
COMPUTER PROGRAMS CALLED SMART CONTRACTS.
A DAO'S FINANCIAL TRANSACTION RECORD AND
PROGRAM RULES ARE MAINTAINED ON A BLOCKCHAIN
wikipedia
DAO - DECENTRALIZED AUTONOMOUS ORGANIZATION

46. COULD THE BITCOIN
NETWORK BE USED AS AN
ULTRA-SECURE NOTARY
SERVICE?

47. YES!
*
* but mainly for proof of existence, not for all notary services…

48. ADDING A COMMENT TO THE BLOCKCHAIN
OP_RETURN
80 CHARACTERS

49. ADDING A “DOCUMENT” TO THE BLOCKCHAIN
C35AD8A76CF51E00E
6E3DADAE01712C7DD
CFF83CA7125D1D3BB
2A8D7A57B10CD
21/09/2016

50. TEXT
GHANA - BITLAND
Ghana Blockchain Cadastral Land
Registration Registry Technology 2016
by NGO Bitland:
‣ Investigate the issued land title (land commission of Ghana)
‣ Survey the land (real estate)
‣ Confirm the land-title validity (talk to nearby neighbours).
‣ Record the property GPS coordinates with a GPS device
‣ Submit the collected data and information into the Blockchain
ledger
‣ Issue a paper certificate to the rightful property owner

51. TEXT
BLOCK NOTARY AN TIERON
▸ Sending a picture to the blockchain and
receiving a receipt for it.

52. TEXT

53. BLOCK NOTARY

54. UPROOV.COM

55. LOVE AND MARRIAGE…

56. ATM

58. TEXT
WHAT DOES LEARN US?

59. TEXT

60. STARTUPS
START-UPS

61. TEXT
MORE STARTUPS,
DIFFERENT VIEW

62. BANKS & FINANCIAL SERVICES PLAYERS
BANKS