block chain as a platform february 2015 - lerner consulting

Privileged and Confidential Information Twitter: @Revinnovator

Stop Worrying About Privacy; Start Caring About Identity

Creating Platforms from Block Chains

February 2015


What are Cryptocurrencies?

1

•  Cryptocurrencies are a digital financial instrument, the most well known is Bitcoin.

•  Bitcoins can be traded like currency for the payment of public and private debts

•  Transactions are performed without the need for tradition credit card or Central (government backed) Bank

•  It's designed to enable users to send money over the Internet in a user friendly and simple manner


Three Things to Remember 1.  The value of a bitcoin is

volatile -  Like stocks

2.  Bitcoin transactions are not reversible -  Like cash

2

3.  There are no bitcoins –  There are only bitcoin transactions


Lifecycle of Bitcoin Transactions

3

Transactions are visible and recorded for everyone to

see and examine


Steps in a Transaction •  Only transactions may be traded •  Wallets create the transaction details •  Networks in bitcoin transactions create

transparent ledgers •  Identity is ensured by a “key” system •  Proof not trust is what the system relies

upon – Proof establishes identity (of the transaction) – Proof of work established in a hash

4


Non-Repudiation

5

In cryptography, it means preventing an individual or entity from denying that a particular action occurred

related to data


What is the Block Chain Ledger?

6

Linear and sequential list of [bitcoin] transactions. Validation of entries in the ledger

are derived from previous ones


How does the Block Chain get updated?

7

•  Transactions or “messages” are part of the encryption input

•  Approximately six times per hour transactions are committed to the ledger

•  Cryptographic standard SHA-256 –  Produces a digest or a hash of fixed

length – 256 bits –  Mathematically “hides” the incoming

message –  One way encryption

•  Nonce (Number used once) •  Proof-of-Work

–  Paying for accounting


Digest Results from SHA-256

8

fox =

776cb326ab0cd5f0a974c1b9606044d8485201f2db19cf8e3749bdee5f36e200

fxo =

fbf7443c4238ad48b4d28226ff7dcca5e5ab467b2c37b960ebc860703d925f52

The quick brown fox jumped over the lazy dog =

7d38b5cd25a2baf85ad3bb5b9311383e671a8a142eb302b324d4a5fba8748c69


What problem(s) can we solve for our customers?

1.  Always have proof of a transaction 2.  Global and transparent ledger system 3.  Secured ledger 4.  Portable and lightweight

9

Identity can be guaranteed

Distributed Database


Building an Identity 1.  Define it and keep it authentic 2.  Practice network listening 3.  Identify your network 4.  Manage it. Don’t try to control it 5.  Curate your data privacy -  Selective vs. restrictive

10


Block Chain as a Platform

11

•  Opportunity to roll build and private networks

•  Create customized/specialized front end services

•  Smaller chain can run on commodity hardware

•  Multiple models for profitability

•  Create multi-party agreements easily


Healthcare & Beyond Value Date Entered

Name 01-Jan-2014

Date of Birth 01-Jan-2014

Sex 01-Jan-2014

Blood Type 01-Jan-2014

Pre-existing Condition 01-Jan-2014

Treatment 1 10-Jan-2014

Treatment 2 10-Feb-2014

Treatment 3 13-Mar-2014

Treatment … 10-Apr-2014

Medication 1 11-Feb-2014

Medication 2 11-Mar-2014

12

•  Available and authenticated •  Distributed and not dependent

on a single network •  Event driven

–  IoT ready •  Secure Health Care

Management •  Patient Centric-Model

–  Dependent on everyone’s participation

•  Extend to other forms of conventional identity –  Driver’s License –  Voter registration


Business Networks •  Personal trust relayed into

computer proof •  Business networks such as

LinkedIn –  Multiple parties “vote” on

attributes –  Global database of skills –  Verify employment/contract

status

•  Smart Contracts –  Validated and self-executing

agreements between programs

13


Barriers to Change •  People don’t like Change – Cost of refactoring “legacy” (eco) systems – Behavioral/cultural changes – The New Normal takes a while

•  People say “No” to complicated things •  Price volatility makes people wary

14

Inspection creates Opportunity


Additional Use Cases •  IBM ADEPT - Autonomous Decentralized Peer-to-

Peer Telemetry –  http://www.coindesk.com/ibm-reveals-proof-concept-

Block Chain-powered-internet-things/

•  Births/Ancestry •  Domain Name System – NameCoin •  Bitcoin Series 24: The Mega-Master Blockchain List –  http://ledracapital.com/blog/2014/3/11/bitcoin-series-24-

the-mega-master-blockchain-list

•  Any centralized registry

15


Wrap Up •  Opportunity comes from inspection •  Identity is as important as security •  Validated identities reduces risk in an

ecosystem •  Proof-of-Work is key and requires –  Incentives (e.g., “mining”) – Distributed and cost effective compute power

•  SETI/BOINC software

16


Bio – Lawrence I Lerner

17

Lawrence is a corporate entrepreneur with a keen eye for “market relevance” who envisions and builds digital products and services across the globe. An early interest in taking apart complex problems honed his multi-disciplined solution approach. He’s launched more than a dozen $10MM+ corporate products across industries (Retail, High-tech, Media and Entertainment) and IT services. With a passion for growth and transformation his expertise is in Process Engineering, Strategy, Enterprise Architecture, Big Data, Mobile/Social Media, IT Security and Product Marketing.

While successfully creating businesses on three continents, Lawrence served as an executive at PricewaterhouseCoopers, Cognizant and other companies. Over the years his teams have received industry recognition seven times for excellence. He has created business lines ($100MM+) and launched new product/services for some of the worlds’ top brands (Motorola, Catalina Marketing, Macrovision, DHL, Debenhams). While at PwC he managed a $60MM venture fund for early stage technology companies. Over the past 20 years, he’s helped launch eight early stage companies.

In 2005 his work was recognized in Dun & Bradstreet’s Annual Report for transforming their core business platform DnBi, resulting in 35% growth. In 2009 the industry analyst Gartner recognized his solution for Business Process Management as “best in class.” As a Board Member for PNI Digital Media (now Staples), the premier online digital solutions provider for Retailers, he directed new business initiatives. He chaired the company’s Governance committee.

Examples of everyday digital products he’s defined, designed and delivered: •  Loyalty programs for Discover Card, The New York Times and Safeway from the ground up. This resulted in seven digit revenue

streams •  Point-of-Sale Credit and Debit cards platforms for Follett (installed across a base of 1,800 college campuses) •  Wireless ecommerce strategy for Motorola •  Social media platforms for social listening and storytelling Lawrence is a thought leader in Change Management, Payments, Social Media/Mobility, and Retail. He is a contributing writer for Wired, The Christian Science Monitor and PSFK. In 2012 his book ‘Facebook for Your Business’ was published. He is a frequent speaker, contributing writer and media guest on the New Normal of business and IT.

excel lence.perspect ive. innovat ion.

Thank You!

block chain as a platform february 2015 - lerner consulting

Technology

revinnovator steps

hour transactions

revinnovator digest

revinnovator nonrepudiation

private debts transactions

transaction proof of

transparent ledger system

block chain ledger