Blockchain
- 1. Blockchain and Future Aspects Vivek Upadhyay
- 2. Agenda • Abstract • What is Blockchain • Hashing • Elements of Blockchain • Blockchain benefits • Future Aspects • Oracle Blockchain solution
- 3. Abstract Remember the movement around 'digital transformation' that started a while ago and redefined several paradigms? It changed the way we shopped, traveled, transacted, communicated, and ran our daily functions backed by innovative technologies like IoT, AI, Augmented reality, Gamification, Beacon, blockchain etc. There's a lot of buzz around Blockchain, Is Blockchain the next "Big Thing" in the IT industry? It certainly looks to have a huge impact in finance, but it could also have far reaching effect in many other industries as well. Hence it is imperative of Business to understand key drivers and enablers to embark on paradigm shift with blockchain technology.
- 4. Blockchain A Network of so-called computing nodes make up blockchain A blockchain is fundamentally a distributed ledger that allows multiple authorized parties to make changes in an agreed upon manner. Since it relies on both cryptography and private/public encryption to validate transactions, Blockchain is generally regarded as being highly secure. "Public-key encryption provides record-level security of data and there is no single point of failure as the network is resilient against attacks on individual nodes”.
- 5. Hashing • To achieve temper-evidence in the ledger, blockchain exploits cryptographic hash functions. • In simple terms, hashing means taking an input string of any length and giving out an output of a fixed length. • Blockchain use SHA-256 hashing algorithm, no matter how big or small your input is, the output will always have a fixed 256-bits length
- 6. What makes it Unique • Small change in input will make change in output hash, this is a critical function because this property of hashing leads to one of the greatest qualities of the blockchain, its immutability. • Each transaction or contract between two (or more) members in the network requires verification or validation by the network itself, without going through an independent arbitrator. This is achieved by incorporating a verification scheme in the protocol. • The blockchain technology is flexible enough to accommodate a suitable form of decentralized appending process, known as mining in general. Note that the mining and consensus schemes constitute the backbone for any blockchain protocol, and hence should be chosen carefully.
- 7. Elements to the Blockchain technology There are four essential elements to the Blockchain technology. • The Distributed Ledger Technology – this is a database that is consensually shared, replicated, and synchronized across a network that is spread across multiple sites, institutions, and geographies. • The Smart Contracts – it is code that is capable of facilitating, executing, and enforcing the negotiation or performance of agreement (i.e., contract) using the Blockchain technology. It runs on the nodes and invokes a request to the Consensus. • The Consensus Protocols – the Blockchain is updated via a Consensus protocol. It ensures an unambiguous ordering and validation of transactions and guarantees the integrity and consistency of the Blockchain across geographically distributed nodes. Some Consensus protocols are decentralized/permission less, and some are permissioned (think Byzantine). Other Consensus protocols are Raft, Paros, Sieve, etc. • The Messaging Service – this enables inter-node communication among blockchain peers.
- 8. Blockchain Example – Bitcoin technology Let us illustrate the generic structure of a permission less blockchain architecture by taking the pioneering blockchain application–Bitcoin–as an example. • Block: A Bitcoin block contains the hash of itself, the hash of the previous block, the Merkle root of the transactions that are included in the block, a nonce that is used by a miner to solve the Bitcoin computational hash-puzzle, and the time at which the block was created • Verification: Verification of Bitcoin transactions is performed through scripts, implemented in a Turing incomplete stack based scripting language • Mining: Bitcoin follows a competitive mining scheme, based on a hash-puzzle. The miners have to compete with one another, using the computing resources at their disposal, to append a new block to the blockchain ledger • Consensus: Bitcoin follows a standard majority consensus, where each miner may choose which block in the chain to append to, and eventually the longest chain sustains.
- 10. Blockchain Technology Benefits Because decentralized applications run on the blockchain, they benefit from all of its properties. • Immutability – A third party cannot make any changes to data. • Corruption & tamper proof – Apps are based on a network formed around the principle of consensus, making censorship impossible. • Secure – With no central point of failure and secured using cryptography, applications are well protected against hacking attacks and fraudulent activities. • Zero downtime – Apps never go down and can never be switched off. • Transparency – Data is embedded within network as a whole, it can be public or specific to a permissioned network.
- 11. • Supply chain Management Blockchain can be used to monitor costs, labor, and even waste and emissions at every point of the supply chain. This has serious implications for understanding and controlling the real environmental impact of products. The distributed ledger can also be used to verify the authenticity or fair trade status of products by tracking them from their origin. • Banking and Payment It can be used to give access to financial services to billions of people around the world, including those in third world countries who don’t have access to traditional banking. Bitcoin allows anyone to send money across borders almost instantly and with relatively low fees. Digital currency like Bitcoin has already taken world by storm though not accepted in India for now.
- 12. • Insurance The global insurance market is based on trust management. The blockchain is a new way of managing trust and can be used to verify many types of data in insurance contracts, such as the insured person’s identity. blockchain smart contracts are useful for any type of insurance that relies on real-world data, for example crop insurance • Networking and the Internet of Things Samsung and IBM are using blockchain technology for a new concept called ADEPT, which will create a decentralized network of IoT devices, Smart contracts make the automation of remote systems management possible. A combination of software, sensors, and the network facilitates an exchange of data between objects and mechanisms. The result increases system efficiency and improves cost monitoring. Devices would be able to communicate to each other directly to update software, manage bugs, and monitor energy usage etc.
- 13. • Cloud Storage Data on a centralized server is inherently vulnerable to hacking, data loss, or human error. Using blockchain technology allows cloud storage to be more secure and robust against attack. Oracle has announced own Oracle Blockchain Cloud Service(BCS) at Oracle OpenWorld 2017 • Private Transport and Ride Sharing The blockchain can be used to create decentralized versions of peer-to- peer ridesharing apps, allowing both car owners and users to arrange terms and conditions in a secure way without third party providers. The use of built-in e-wallets can allow car owners to automatically pay for parking, highway tolls, and electricity top-ups for their vehicle. UBS, ZF and Innogy are some of the companies developing blockchain based e-wallets.
- 14. • Voting During recent Indian and US election certain parties were accused of rigging election results. Blockchain technology can be used for voter registration and identity verification, and electronic vote counting to ensure that only legitimate votes are counted, and no votes are changed or removed. Creating an immutable, publicly-viewable ledger of recorded votes would be a massive step toward making elections more fair and democratic. • Charity Common complaints in the charity space include inefficiency and corruption, which prevent money from reaching those that are meant to have it. Using blockchain technology to track donations can let you be sure your money is going to end up in the right hands
- 15. • Public Benefits The public benefits system is another sector that suffers from slowness and bureaucracy. Blockchain technology can help assess, verify, and distribute welfare or unemployment benefits in a much more streamlined and secure way. The blockchain is also a good contender for implementing a basic income. • Government Government systems are often slow, opaque, and prone to corruption. Implementing blockchain-based systems can significantly reduce bureaucracy and increase security, efficiency, and transparency of government operations. Dubai, for example, is aiming to put all its government documents on the blockchain by 2020.
- 16. • Retail When you shop, your trust of the retail system is tied to the trust of the store or marketplace. Decentralized blockchain-based retail utilities work differently: they connect buyers and sellers without a middleman and associated fees. In these cases, trust comes from smart contract systems, the security of exchanges, and built-in reputation management systems. • Healthcare One of the challenges hospitals face is the lack of a secure platform to store and share data, and they are often victims of hacking because of outdated infrastructure. Blockchain technology can allow hospitals to safely store data like medical records and share it with authorized professionals or patients. This can improve data security and can even help with accuracy and speed of diagnosis.
- 17. • Crowdfunding Crowdfunding has become a popular method of fundraising for new startups and projects in recent years. Crowdfunding platforms exist to create trust between project creators and supporters, but they also charge high fees. In blockchain-based crowdfunding, trust is instead created through smart contracts and online reputation systems, which removes the need for a middle-man. New projects can raise funds by releasing their own tokens that represent value and can later be exchanged for products, services, or cash. • Real Estate Some of the issues in buying and selling real estate are bureaucracy, lack of transparency, fraud, and mistakes in public records. Using blockchain technology can speed up transactions by reducing the need for paper- based record keeping. It can also help with tracking, verifying ownership, ensuring accuracy of documents, and transferring property deeds
- 18. Oracle Blockchain Solution Oracle just announced its own Oracle Blockchain Cloud Service(BCS) at Oracle Open World 2017. Oracle’s Blockchain Cloud Service(BCS) is an enterprise-grade distributed ledger based platform designed to extend and scale ERP, SCM and SaaS and on-premise applications. It is designed to perform secure and scalable peer-to-peer transactions across a trusted network with tamperproof data. Oracle has partnered with the Hyperledger Project (www.hyperledger.org), a consortium focused on private (or permissioned) Blockchain-based distributed ledgers and solutions across a variety of use cases and industries. The Hyperledger Fabric is an open source code base, managed as a project of the Linux Foundation. The Hyperledger supported solutions are also designed to run smart contracts through a combination of a modular architecture and consensus protocols. Oracle has also partnered with leading systems integrators and partners to deliver complete Blockchain solutions. For more information on the benefits of Oracle’s Blockchain services, please visit: https://www.oracle.com/blockchain
- 19. Oracle Blockchain Cloud Service • Oracle Blockchain Cloud Service is a network consisting of validating nodes (peers) that update the ledger and respond to queries by executing smart contract code—the business logic that runs on the blockchain. • External applications invoke transactions or run queries through client SDKs or REST API calls, which prompts selected peers to run the smart contracts. • Multiple peers endorse (digitally sign) the results, which are then verified and sent to the ordering service. After consensus is reached on the transaction order, transaction results are grouped into cryptographically secured, tamper-proof data blocks and sent to peer nodes to be validated and appended to the ledger. • Service administrators can use the Oracle Blockchain Cloud Service web console to configure the blockchain and monitor its operation.
- 20. Oracle Blockchain Solution SWOT Analysis