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Key concepts of blockchain
November 2017
Advisory
PwCNovember 2017
A brief history of blockchains
2Key concepts of blockchain
BTC reach $415 in March according toCoinDesk
DAO forked ETH
The first Bitcoin was minted
The mysterious Satoshi Nakamotopublishes his Bitcoin white paper
2008
20162009
Ethereum crowd saleNumber of crypto
tokens: 1.172
BTC $8.216
240 PwC staffworking onblockchain
2014 2017 Nov. 23rd
PwCNovember 2017
The Blockchain Revolution!?
3Key concepts of blockchain
Coins
• Cryptocurrencies
• Payment services
• Trading of resourcesbeyond payments
Tokens
• Smart Property
• ICOs
• Smart Contracts
DApps & DAOs
• Autonomous decentralizedapplications
• Decentralized autonomousorganizations
• ….?
Po
ten
tia
la
cti
vit
ies
Time for Business cases
1.0
2.0
3.0
PwCNovember 2017
Key concepts of blockchain
4Key concepts of blockchain
(Distributed)ledgerEvery participant in thenetwork has simultaneousaccess to a view of theinformation
CryptographyIntegrity and security of theinformation on theblockchain are ensured withcryptographic functions
ConsensusVerification is achieved byparticipants confirmingchanges with one another,replacing the need for a thirdparty to authorisetransactions
Smart contractsAdditional business logic canbe embedded in theblockchain
PwCNovember 2017
5Key concepts of blockchain
centralized
Node
disributed ledger
blocks
All transactions are distributed in blocks and all nodeshold all transactions.
shared ledger
• Chain of transactions without blocks
• Centralized golden copy of data
PwCNovember 2017
Data has to be “signed” and to be “hashed” to the ledgerby the proper party.
6Key concepts of blockchain
Digital Signature Process
Algorithm
Hashed Data
User’s Private Key
SignedMessage
Raw Data
HashingFunction
“Sample sentence” “Sample sentence. “
d5cc9ef92c611395e8ca2e6b4796facd
85e748010af1b44d3a12bacddf135d50
transforms data of any size to a new fixed size
Hashing Function
Transforming Data Identification
Verification
PwCNovember 2017
Block 23
Block Hash:58ex2uda21….
Previous Block Hash:48cd3adb18….
Time Stamp
Transaction
Other
Block 20
Block Hash:57ec2fdb62….
Previous Block Hash:57ec2fdb54….
Time Stamp
Transaction
Other
Block 21
Block Hash:57ec2fda71….
Previous Block Hash:57ec2fdb62….
Time Stamp
Transaction
Other
Block 22
Block Hash:48cd3adb18….
Previous Block Hash:57ec2fda71….
Time Stamp
Transaction
Other
time
7Key concepts of blockchain
Each block contains a validated pointer to the previousblock. This ‘chains’ each block to the previous one.
PwCNovember 2017
Nodes have to agree on a single source of history.
8Key concepts of blockchain
Proof of StakeProof of Work
?
proposes appends
votes
Trade-off decisions:
Energy Consumption Network Resilience Timing
PwCNovember 2017
A Smart contract is a business logic that can be assignedto transactions.
10Key concepts of blockchain
A contract betweenparties is written as
code in the blockchain.Individuals are anonymous butcontract is in the public ledger.
A triggering event (e.g.expiration date) is hit.
Contract executes itselfaccording to coded terms.
PwCNovember 2017
Is blockchain technology right for you?
High performance,Millisecond
transactions?
Are you managing acontractual
relationship?Does identity matter?
Does this requiretrust/a Market
Approach?
Yes Yes YesNo
10Key concepts of blockchain
PwCNovember 2017
Key factors for the future of blockchain
9Key concepts of blockchain
Inter-operability• Standardisation
• Messages
• Consensus
• API’s
Scalability• Volumes
• Response times
Vulnerability• Attacks
• Confidentiality
Regulatory• Issuance of assets
• Compliance rules
• Oversight
PwC blockchain propositions
Business Modelling
Prototyping
Consortium buildoutMag. Thomas Hillebrand, MBASenior Manager
Erdbergstraße 2001030 Wien
Telefon: +43 1 501 88 2938Mobil: +43 676 833 77 2938E-Mail: [email protected]
Architecture
Proof of ConceptCode Review