the future of fintech and blockchain
TRANSCRIPT
The Future of Fintech and Blockchain
Speaker: Prof David Lee Kuo Chuen
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
“Stone Age”
In 1946, the birth of ENIAC ( the 1st generation computer)
“Agriculture Age ”
In 1991, the birth of the first web site (Internet).
“Industrial Age”
Cloud computing framework taking over of the client/server framework.
“Bronze/Iron Age”
In 1977, the birth of AppleII, and in 1981 the birth ofIBM (Intel 8088 )- PC
source:http://www.wtoutiao.com/p/156D8bB.html “云计算”已成「老炮儿」,将被“区块链”所革命!
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
• Industrialisation – Manual labour replace by Machine production• The development of the modern computers and internet is a proven fact.
• Centralization of authority – Key characteristic of feudalism • The essence of cloud computing is to provide a single platform to consolidate the hardware,
and software resources administered by different groups in different regions.
Why cloud computing belongs to the Feudal Industrial Age
Although,cloud computing has brought down the
cost of operation efficiently。
but,“Centralisation "has its shortcomings too,
• Data security.
• Disconnection between cloud computing
and terminal server”.
• Challenges to data accountability & trust
mechanism.
source:http://www.wtoutiao.com/p/156D8bB.html “云计算”已成「老炮儿」,将被“区块链”所革命!
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Is there a technology to overcome these shortcomings ?
One of the answers is Blockchain
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
In October 2015, the 1st Global Blockchain Summit
was held in Shanghai. Geeks, entrepreneurs, academic
experts, investors, corporate executives, and regulatory
policy makers gathered and discussed the business
applications and opportunities of blockchain
technology in industry, such as Payment, Internet of
Things, securities trading, digital assets management.
Over 200 guests from the financial industry, including
banking, payments, securities and commodities
attended the summit.
source:http://www.8btc.com/wanxiang-blockchain-labs-20151015© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
In a 20th January release, The People’s
Bank of China (PBoC) said that it is
moving toward the launch of its own
cryptocurrency. The bank wants to use
its control over the currency to reduce
money laundering, tax evasion and other
criminal acts. Blockchain will form the
backbone of its cryptocurrency.
source:http://www.wtoutiao.com/p/156D8bB.html “云计算”已成「老炮儿」,将被“区块链”所革命!
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
A n I n t r o t oB l o c k c h a i n
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Blockchain:Decentralised Database- First used in Bitcoin。
Encrypted transaction
Step 1
Block
Every online transaction is represented in a block
Step 2
Each block record, is distributed to all the participants
Step 3
Participants validate the block - transaction record
Step 4
Step 5
The block is added to the block chain- the transaction is recorded Step 6
Transaction completed
Encrypted transaction
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Blockchain
Public chains Private chains
Consortium Chains
Fully Private Chains
E.g.:R3 CEV
E.g.:Bitcoin
Types of Blockchain Features of Blockchain• Decentralised
• Data is replicated on all the nodes in a P2P network, and each node’s copy of the data is identical to every other node’s copy
• Consensus mechanism
• All users in the network can come to collectively agree on the validity of the data recorded
• Irreversibility and crypto security
• One would need to command at least 51% of the computing power of all mining nodes to take control of the block chain -to overturn the consensus blockchain.
• Openness
• Data is open to all on the P2P network
• Anonymity
• Individual parties are never identified. Instead, security keys (public and private key pairs) are required to gain access to transaction output.
• Multiplatform
• Every blockchain node has the same calculation and data structure. Any platform will be able to compute the node.
source:http://www.8btc.com/what-is-blockchain; http:// community.qingcloud.com; https://blog.ethereum.org
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Telecommunications Voting Healthcare Nortarizastion Banking
Equity brokerage &Exchanges
Insurance Web DomainInternet of
Things
……
Moreare
coming
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Stock/Securities Exchange
1 Bitshares system 2 Blockchain Equity Exchange System.
• Real-time exchange; total transparency• All corporates can self issue their securities.• Open source system,enable tens of thousand of
transactions per second.
• Use mainly for the transactions of Privatecompanies shares.
• Overstock and project Link by NASDAQ are developing this system.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
B a n k i n g
• E.g. Cash transfer• Present:You=>bank=>friend• Future:You=>friend
• BIS research report:The development of block chain technology will change how central banks operate.
Benefits of block chain that banks can leverage on
• Security: irreversible, immutable, traceable
• Ease of governance : Utilises name base block chain, every node will be identified, e.g. alliances, issuers, general users
• Low operating cost : Reduce the cost of transactions
• Shortened the settlement time of financial transactions: UBS white paper: business process time can be reduced to 15 seconds.
• Santander bank: using blockchain technology will help the banking sector to reduce expenses by 20 million USD.
• Lower counter party riskssource:http://www.businessinsider.sg/11-banks-in-r3-consortium-use-blockchain-technology-to-trade-2016-1/?r=UK&IR=T
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Banking R3
Blockchain applications for banking:From vision to realisation
•R3 (R3CEV LLC) leads a consortium of 42 financial companies in research and development of blockchain usage in the financial system.
•11 banks conducted trials on transactions through distributed ledger using Ethereum and Microsoft Azure.© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
I n s u r a n c e
Traditional coverage system
Decentralised coverage system
• All data is recorded into the
blockchain.
• Any user can start and end their
insurance coverage at anytime.
• No need for insurance funding pool.
Mode of insurance coverage
• Irreversible, immutable and
impartial, ensure self authenticationand fairness.
• The decentralised system removethe need for middleman, which
ensure high utilization of the fund.
Advantages
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
P2P lending
MoneyCircles is a mobile-decentralised P2P Savings & Loans marketplace built on private blockchain technology.
Through smart contract, MoneyCircles let people with a common bond, save & borrow from each other -a kind of credit union in the cloud, but without the usual costs and restrictions. 。
• Core Advantage:*No black box mechanism or money pool issues.*Transaction flows are open and transparent. *All users can monitor where the funds are transferred to and how the fund will be used.
• Millions of savers have money trapped in low interest savings accounts with institutions who want to lend, but may not be profitable for these institutions. Savers desire better rates and want their money put to better use. MoneyCircles.com aims to reconcile these two parts of the market, by making saving and lending more socially based, to better deploy deposits which will help significant parts of the society.
source:http://moneycircles.com/
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Communication
Design flow of traditional communication devices:All nodes will connect through the shortest or the most efficient route.
Bitmessage as a central link for message delivery :• Message is sent to users of the network,
and users can only access using theirprivate key.
• Avoid being track• Ensure data security and data transfer
security
GetGems a decentralised hub:• communication function is
similar to that of Bitmessage• Equip with Bitwallet• Transact and earn
cryptocurrency“gems”.• Users can click on
advertisements for monetary rewards.
Bitmessage
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
V o t i n g
Old, requires high maintenance , inefficient, and not fraud proof。
What does the blockchain means for voting?:• Verifiable source code for voting machines• Prevent voter fraud by eliminating the
possibility of more votes than registered voters.
• Instant, transparent and incorruptible voting data.
• Very low cost, easy to implement
Voting system that utilised block chain:• Complete voting
system• Secure• Innovative
Blockchain Apparatus Voting System:• Complete voting system• Focused on security: multiple audit trails,
including paper and the blockchain.• Uses innovative techniques that are not
present in any other voting system• Customizable ballots provide a familiar
interface for voters.• Friendly admin interface.
source:http://blockchaintechcorp.com/blockchain-apparatus/blockchain-voting-machine/
USA Current Voting system
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
V o t i n g
source: https://followmyvote.com/
Open source
ConvenientLow cost
Secure
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Internet of Things (IoT)
Today supply chain: buyers, sellers andtheir banks are link with one another
Tomorrow’s supply chain: maintains thesame direct connections, plus completetrustable visibility into the flow of goods andthe flow of transactions.
• IBM and Samsung Electronics jointly developed the Autonomous Decentralized Peer-to-Peer Telemetry (ADEPT)
• ADEPT has several capabilities that are fundamental to building a decentralized (Internet of Things) IoT
• ADEPT operates on three open source protocols: Telehash for messaging, BitTorrentfor file sharing and Ethereum, a blockchain protocol for autonomous device coordination functions.
• Once a product is assembled, the manufacturer will register the product into the production system blockchain. When a consumer purchases the product, he or she can register the product into the manufacturer regional blockchain for authentication purpose.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Notarization
Blockai aims to develop
a new tool that enable
artist to prove and state
their copyright to their
artworks.
Uproov will explore
utilisting the blockchain
potential optimization of
time stamp ability.
Stampery wish to use
blockchain to replace
notarizers, and provide
authentication for
legality of sensitive
information.
Chronicled utilized
blockchain technology
to authenticate
collectibles sports shoes.
Irreversibility and incorruptibility allow Blockchain to be widely utilised for notarization purposes
source:http://www.8btc.com/blockchain-item?tagname=%E5%85%AC%E8%AF%81%E9%98%B2%E4%BC%AA© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
Bitproof innovated a
blockchain solution to setup
a one stop service to notarise
Education certificates.
BitSE develop Vechain the
first blockchain-based anti-
counterfeiting technology.
Factom utilize blockchain to help
businesses and government to
simplify records management,
record business processes, and
address security and compliance
issues.
source:http://www.8btc.com/blockchain-item?tagname=%E5%85%AC%E8%AF%81%E9%98%B2%E4%BC%AA
Notarization
Irreversibility and incorruptibility allow Blockchain to be widely utilised for notarization purposes
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
M e d i c a l H e a l t h c a re
A collaboration between Estonia government and guardtime
Healthbank:utilised blockchaintechnology that enable patients to management and share personal medical data with clinicians and researchers.
Applications:Population Health, medical records, patient data
Strengths:• Increase the transparency of healthcare services• Protect patient privacy (Insurance , credit providers, and patients can utilised
the blockchain solutions to manage claims and payments.)• Major data leak e.g. Anthem – 80 million patients and employees records ;
UCLA Health 4.5million patient records.• Increase the efficiency of bills payments process.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
( V i s a / D o c u S i g n )
The project is in the proof-of-concept stage. It brings DocuSign’s Digital Transaction Management (DTM) platform and eSignature solution together with Visa’s secure payment technology (via Bitcoin blockchain).
Users, through their Cars, will be able to pay for toll fees, buy pizza ,or subscribe for satellite broadcast programs.
Consumers can hop into a car in a showroom, configure the lease, insurance and other expenses such as parking and tolls, DocuSign it, pay via Visa, and drive off.。
source:https://www.docusign.com/blog/the-future-of-car-leasing-is-as-easy-as-click-sign-drive/
Contract:Utilise Docusign to verify lease and insurance.
Report:Check driving records
In car payment:Use Visa card
Service:Connections through Apps.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
source:http://www.wanbizu.com/fazhan/201512015809.html;http://www.wanbizu.com/news/201602186602.html;http://www.wanbizu.com/news/201602186602.html
Government Administration
Ukraine will be the first to employ blockchain technology in its government administration system..
Bitnation is collaboratingwith Estonia to utiliseblockchain to administergovernmentaffairs…………
A new political party in Australia is advocating for the use blockchain as the mechanism for voting.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
小蚁AntShares 布比区块链
Many more projects are in the pipeline© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
WanXiang Blockchain Labs is a frontier research lab focusing on blockchaintechnology. The lab will gather experts in this field to work on technologicaldevelopment, business applications, industrial strategy and other aspects.The lab will also guide entrepreneurs, and provide reference for the developmentof the industry and policy making.Its overall aim is to benefit the society and economy with blockchain technology.
Products
WanXiang Blockchain Labs
source:http://www.blockchainlabs.org/
Bitcoin blockchainbased development
platform
Ethereum blockchainbased development
platform
Bitshares blockchainbased development
platform
factom blockchainbased development
platform
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
AntShares utilised blockchain technology to digitise physical real world assets and ownership rights. Through the node to node connection in the network, Antshares decentralised financial service processes, such as registrations, security issuances, assets transfers, and settlements administrations.
Areas for applications
Equity Crowdfunding
P2P Online lending
Employee Shares Issuance
Authorisation of e-contract
A n t S h a r e s
source:https://www.antshares.com© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
Jingtum BeiJing and HNA collaborate through blockchain
1 Corporate Wallet
Procurement detailscash
transfersettlement
• Utilise blockchain todevelop a low costsettlement system.
• Increase efficiency ofinformationdissemination
2 Supply chain financing
• HNA award employees with productdiscounts, rewards, and bonusesthrough the blockchain applicationdeveloped by Jingtum.
• Ensures confidential information ofemployees are secured, and allowsemployee to enjoy more discountsrewards.
3 Awarding of Welfare bonuses
• Utilise the encryptiontechnology that is based onJingtum block chain.
• Aims to solve thedifficulties in cashflow andfinancing ,and in high loaninterest faced by suppliers.
source:http://www.8btc.com/jingtong-hna
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
BuBi Blockchain
Applications
EquitySecured Private equity transactions。
Reward pointsManagement of customer rewards points。
Supply chainimmutable data management ,Supply chain management。
Value Propositions
source:http://www.bubi.cn/#page4
Efficient verifications of
transactions
Multiple signatories
authorisation
Efficient access to accounts ledger
Multiple assetsIssuance
Smart contractBlockchainExchanges
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
V i e w F i n
• Customised Blockchain solutions
• Accreditation of digital assets, Risks management,
Products Snapshots
Project Prometheus - Equity ManagementSolutions: Private or Permissioned Blockchainfor Equity Management• Uses:Equity registration, transfer, or OTC
trades.• Clients: Crowd-funding, Equity Exchanges ,
P2P Leading, Private Equities ,and clients requiring OTC trades.
Project Gaea - Land RegistrationSolutions:Private or Permissioned BlockChain for Land Registration• Uses:Provide trustless proofs for cross-regional
land rights-transfer , real time information validation, decentralised immutable data storage、and instant settlement for digital transactions.
Project Hermes – Royalty/reward Points management.Solutions:Manage customers reward points through Permissioned Blockchain.• Uses:Manage multiple reward points
programs .• Clients:All B2C businesses and services.
Project Themis - RegTech ChainSolutions:Private Chain Solution for Governments /NGOs to implement effective regulatory governance.• Uses:Immutable and time stamped record
management. Improve integrity of information and increase transparency.
• Clients:Governments, NGOs, Regulatory Bodies
source: http://viewfin.com/
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
数贝荷包Digital Wallet
Developed by Yi Cheng Interactive Technologies ,and Sunshine Insurance Group is the first corporate user of the digital wallet。Allow Sunshine insurance client to manage, transfer and transact customer reward points.
Product features and benefits
• Decentralised reward pointssystem。
• Users can self negotiate,transfer and transact rewardpoints. Increase the liquidityof reward points.
• Increases B2C and C2Cinteractions.
source:http://m.caijing.com.cn/api/show?contentid=4090411
Traditional centralised model Decentralised model© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Yangtze Delta Region Institute of Tsinghua University
together with Canaan, Hash, and BST established the China’s
blockchain applications research centre, which aims to develop
the use of blockchain technology.
Yangtze Delta Region Institute of Tsinghua University
Companies Introduction
• Founded in 2012, CanaanCreative is the worldwideleader in producing Blockchainservers and solutions forrepetition ASIC. Our productsare sold to over 150 countriesworldwide.
• 1Hash provides aprofessional and reliableservice platform for efficientbitcoin management ,anddevelopment platform forblockchain research.
• BST provides cloud computing(PaaS) service and softwaremanagement service (Saas) forBeijing government to manageinformation resource.
• Main product/service : DigitalDXS-Cloud (Paas) ,and iTaxonomy
source:www.btc798.com/article-8759-1.html; http://canaan.io/zh/%E7%BD%91%E7%AB%99%E9%A6%96%E9%A1%B5/ ;http://www.synball.com/synball/home/;http://www.1hash.com/index.html
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
“One Belt, One Road”Blockchain applications
As the countries along the One belt ,One Road project transact using USD, the China government wishes to utilise blockchain technology to develop a cryptocurrency system which these countries can transact on. Through the Asia Financial Cooperation association ( to be established), countries members can work and decide on the rules, and protocols to ensure the security and the legality of the cryptocurrency system.
Improve financial cooperation, and communication
Help China corporatesto internationalise
Aid China corporates to minimise foreign investment pitfalls Digitise investment/trade information of the investments in countries along the “One Belt,One Road” project. Blockchain-• will ensure data security ,
transparency, and allow co-verification, and authorisation of information。
• Protect intellectual property rights。
Through the digitisation of production capacity ,and blockchainnetwork, China corporates can• Attract investors in countries along
the “One Belt,One Road” project• Carry out crowd funding in these
countries or internationally.• Or even conduct IPO on the
blockchain network.
Solve China’s problemof production over capacity
source:http://www.ftchinese.com/story/001065381?full=y© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Blockchain 2.0:Ethereum
Ethereum is a decentralized platform that runs smart contracts:
applications that run exactly as programmed without any possibility of
downtime, censorship, fraud or third party interference.。
• Objective:Develop apps which run on a custom built blockchain that
enable shared global infrastructure and that represent the ownership of
property。
• Value proposition:enables developers to create markets, store
registries of debts or promises, move funds in accordance with
instructions or a futures contract, and many other potential
developments, all without a middle man or counterparty risk。© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
Microsoft, R3, Samsung ,Deloitte、RWE ,and IBM.
What problem does Ethereum wish to solve ?
Utilise smart contract to mitigate counter party risk
and issues
Blockchain 2.0 Core
- Smart contract, Smart Asset
- Rootstock a smart-contract peer-to-peer platform,
is rising fast to challenge Ethereum in Smart asset
developments.
Ethereum supporter?
Blockchain 2.0:Ethereum
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Ethereum: decentralised smart application
source: https://slock.it/ethereum_computer.html
Rent, sell or share anything - without
middlemen Slock.it:
Utilise The Ethereum Computer to:
- Turn Personal Assets into Income : securely rent
access to any space or compatible smart object,
without intermediaries. Underused assets such as
temporarily vacant apartment is an opportunity to
make a profit.
- Develop applications for smart contract, and
smart asset to find, locate, rent and control any
object managed by an Ethereum Computer.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Making the world’ssystems honest
“Honesty is subversive” - Paul Snow
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
• In today’s global economy trust is in rare
supply。This lack of trust requires the devotion
of a tremendous amount of resources to audit
and verify records. Thus reducing global
efficiency, return on investment, and prosperity.。
• Incidents such as the 2010 United States
foreclosure crisis demonstrate that, the current
processes are terribly inaccurate, efficient and
prone to failure.。
• Factom removes the need for blind trust by providing
precise, verifiable, and immutable audit trail.
“Honesty is subversive” - Paul Snow
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Factom’s blockchain technology can be
adapted to almost any organization.
• Businesses and governments can use
Factom to simplify records management,
record business processes, and address
security and compliance issues。
• power a remarkable range of applications,
e.g. audit systems, medical records,
supply chain management, voting
systems, property titles, legal applications,
and financial systems.。
Factom maintains a permanent, time-stamped record of
your data in the blockchain. Reduce the cost and
complexity of conducting audits, managing records, and
complying with government regulations
Application Usages Factom Proof- Network value
source:http://factom.org/
Proof of Existence :Document existed in this form at a
certain time
Proof of Process:Document is linked to this new updated
document
Proof of Audit:Verifying the
changes in the updated document© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
Factom Use Case 1 – Saving BoA $17 Billion
Factom could utilize the bitcoin blockchain to keep Bank of America’s records permanently engrained in the distributed public ledger. The entries are then “filed” into directory blocks and secured to the bitcoin blockchain every ten minutes. They can then be audited in real time and verified instantly, allowing everyone to double check the work completed and catch mistakes if they arise before they become a problem.
Background
Multiple mortgage companies, were fined billions of dollars due to a mishandling of mortage records. One of these companies was Bank of America who fell victim to a $17 billion fine, also known as the largest fine in history.。
Solution
source:http://factom.org/
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Factom stores data for its clients using
encryptions that are called hashes in blockchain
in a decentralised system. Because the data is
encoded, no one except the user who created the
encryption can decipher it.
Blockchain technologies could prevent the
disastrous Sony hack ,and shift big companies
away from central databases.
Factom Use Case 2 - Protecting Sony Pictures with BlockchainTechnology
Background
Solution
On November 24, 2014, a hacker group which leaked out
confidential data from the film studio Sony Pictures
Entertainment. The data included personal information
about employees and their families, e-mails, salaries,
copies of then-unreleased Sony films….
source:http://factom.org/
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Factom can digitized landownership documents
and store them in a decentralized blockchain.
Any land transactions and transfers can be
track . Furthermore unauthorized or illegal
changes can be detected and corrected.
Factom Use Case 3: Unlocking $9 Trillion in Land Value
Background
Solution
In many developing countries, land owners do not have
proof of rights to landownership 。Hernando De
Soto :”main problem of development is not that the
poor in the third world lack capital, but that many lack the
legal title to assets they already hold. Giving them legal title
will unleash this “dead capital” so that it can be used
as collateral for loans to fund businesses or expand
homes.。
source:http://factom.org/
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Global PerspectivesThe potential of decentralised ledgers and block chains
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Recent Developments – Collaboration Of Governments With Industry To Explore Strategic Potential Of Block Chains
Implementation of block chains is driven by:
1. The ability of block chain to provide a basis for cryptographic trust in a similar way to PKI• Block chains could leverage PKI’s deployed scale and governance
• PKIs could leverage block chain’s payment and ledger functions
2. Permissioned ledgers contain a data field of unlimited size• Information about a transaction, including the contract, licence or copyright,
could be included, providing a strong additional factor for trust.
• Enables ‘smart contracts’, offering efficiency and non-repudiation.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
3. Smartphones are becoming the de facto trusted user device
The latest smart phones include new security features such as:
• Trusted Platform Module – secures digital certificates and cryptographic keys for authentication, encryption and signing
• Consumers can sign transactions (eg using a block chain) and payments (egusing a ‘trusted Bitcoin’) using smartphones.
Recent developments – Collaboration of Governments with Industry to Explore Strategic Potential of Block Chains
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
“Airbnb Co-founder Eyes Blockchain Tech For User Reputation And Trust”
13 Mar 2016
• Blecharczyk, Airbnb’s CTO said that Airbnb would be looking into Blockchain integration this year, or a similar distributed ledger system, to authenticate a user’s reputation and establish trust on the platform.
Source: http://www.theblockchain.com/2016/03/13/airbnbcofoundereyesblock chaintechforuserreputationandtrust/© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
“Microsoft & IBM Declare Blockchain Open For Business”
17 Feb 2016
• IBM has announced the official launch of its digital ledger deliverance
• Brings blockchain services to a cloud-based system
• Platform allows users to create, deploy and run blockchain-based applications.
• The London Stock Exchange Group is engaged in the development of open blockchain technologies with IBM• create solutions that will help manage risk and bring additional transparency to
global financial markets
Source: https://news.bitcoin.com/microsoftibmdeclareblockchainopenbusiness/© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
Formed 9 Feb 2016© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Although,
At present Blockchain still have
shortcomings.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
• Is blockchain really superior to current solutions?What are the benchmarks?
* Can blockchain really reduce resources cost , improve service quality or
enhance users experience?
• Immutable public ledger, standardised contracts, accounting, and transactions
may seems too idealistic .
* Different nature of businesses ,and changing organisation needs will impede
the establishment of a single standard.
• To succeed, blockchain applications need to create true value to the users.
• Issues on the consolidation and allocation of resources:
*How should research resources be allocated ?Can related or similar resources
be consolidated to create synergies?
• What solutions ,and which industry domains should receive the most resource
funding?
source:“区块链落地还有多远”《财新周刊》 2016年第7期 出版日期 2016年02月22日
Application suitability
Consolidation and allocation Of research resources.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
• Ensuring security and immutability of data may drive up cost.
*To ensure the immutability of data(One needs enough computing power to
control more than 51% of the data copies to gain control of the
blockchain) ,implies incurring huge storage and resource power cost.
*Low storage efficiency:1.Huge amount of copies. 2.Blockchain size cannot be
reduced(expired and useless data will also be stored.).
• Rebooting of data is time consuming:New content X number of copies,and
coupled with distance and bandwidth, will be time consuming。
Affect user experience, e.g. high volume trading , processing huge data base.
• Illegal activities e.g. money laundering, financing terrorism, fraud, and
impersonation.
* A decentralised framework may not meet regulatory requirements.
* Early intervention and overregulation by regulators, may impede blockchain
developments, and the potential benefits of blockchain may not realised.
source:“区块链落地还有多远”《财新周刊》 2016年第7期 出版日期 2016年02月22日
The likelihoodof reducing costs?
Regulatory requirementsConcerns ?
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
But Don’t Get Left Behind!
Noah'sArk
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
What is happening and what will happen?
• Unbundling and decentralisation of financial services
• Same data, same page, less errors
• Real time settlement without need for financial intermediaries
• Shaving off duplicative and redundant services
• Security boost
FINTECH
Banks Are Only The Beginning…
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Capital Markets
• Smart Contract post trade settlement
• Automated
• Efficient
• No need for trusted third parties
Personal Insurance + Digital Identities
• Distributed ledgers with hospitals
• Seamless processing
• KSI authentication
• Boost claims efficiency
As Wide As Your Imagination Can Take You!
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Real-time Accounting
• Immediate data flow
• Programmable accounting entries
• One master prime ledger to serve management, bank lending, regulatory purposes
• Less errors, free of manipulation
Company A
IRAS
B.O.D Suppliers
SH
Permissioned Public Ledger
Trade Flows
Real-time GDP Reporting
As Wide As Your Imagination Can Take You!Government Budgets
• Programmable smart contracts for budget allocation
• Real-time GDP and key data reporting
• Verifiable and trusted
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Don’t rise with internet , but trip by blockchain。。。
Some internet companies may not pay much attention to ,or even disregard blockchain. If they miss this chance to utilise the blockchain development, the raise of blockchain may disrupt their technology roadmap.
-Yao Yu Dong(Director of China Central Bank- Institute of Finance)
千万别生于互联网死于区块链。。。
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Regulators should keep up with financial innovations
MAS Ravi Menon: “If you start regulating every
one of those, you stifle a lot of innovation, and they
don’t get a chance to grow,” MAS will regulate
fintech firms only when they pose risks.
Support for FinTech:
• Promote Greater inter-operability across data systems is a key priority. E.g. an “all-in-one” addressing system, that will
enable e-payments using the payee’s mobile number, email address, social network account, or other proxies. Without
the need to know the payee’s bank account number.
• MAS will therefore introduce a “regulatory sandbox” approach that aims to give FIs more confidence to experiment and
launch their innovative products or services within controlled boundaries.。© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen
Don’t Get Left Behind!
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
颠覆2.0
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
THE ECONOMICS OF FINANCIAL INCLUSION
• The problem of financial exclusion does not just exist in undeveloped
countries
• 7.7% of US households are unbanked and 20% are underbanked
• The underserved in the world turn to non-traditional forms of
alternative financial services such as those provided by cheque cashers,
loan sharks and pawnbrokers.
• For example, illegal workers in the US who cash cheques via agents such
as cheque cashing depots or convenience stores.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
• The global picture of the unbanked and underbanked is even more skewed.
• Only 50% of adults in the world have an individual or joint account at a formal
financial institution (Demirguc-Kunt and Klapper , 2012)
• There are 2.5 billion adults in the world with no formal bank accounts, most of them
are in developing economies.
Source: newsroom.mastercard.com
THE ECONOMICS OF FINANCIAL INCLUSION
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Mobile (Internet) Banking Penetration 2015.06
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
The Chinese Article advocate Singapore to use “Blockchain Technology” to expand its business network into ASEAN ( 10 countries, 600m people) ,and to adapt the Financial Inclusion model of China and Kenya to help Singapore’s neighbours.
-David Lee and Yan Li 15th May 2015, Lian Zaobao
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Alibaba & Ali Pay
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Financial Inclusion+ Sharing economy+ Blockchain = 颠覆 (Dian Fu)
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
http://www.smu.edu.sg/podcast/cryptocurrency-revolution-and-its-impact
BLOCKCHAIN THE DISRUPTOR
Oct 2014Podcast :
Decentralised
Bockchain
Reeduces
Business Cost
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Bitcoin
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Cryptocurrency
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Financial Services and Blockchain
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
A software platform for fastBlockchain ,and SmartContract prototyping ,andapplication development.Blockchain As A Service
Drove effort to create a new architecture at IBM for connecting devices in Internet of Things (IoT)
Focused on wearable technologies • Apple Watch• Connected medical devices• Application of sensors and
connectivity to industry
Recruited Paul BrodyDeveloped RUBIX
Support from Big 4
Hiring people with expertise in Ripple, Hyperledger and Chain.
Aim to be neutral advisor for clients in implementation, rather than technical specialist
Blockchain Advisory
Commercial Sidechain“Liquid” to facilitate fastand secure transfersbetween exchange orbrokerage accounts
• Integrate multiple blockchains
• Distributed file storage permission
• smart contract capable blockchains
Strategic Partnerships
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
IBM Watson
• IBM is part of the Linux-based Hyperledger project.
• Offer ‘blockchain as a service’ for developers to use
within the IBM Cloud via a service called Bluemix. Its API
infrastructure allows external data to be plug into the
WATSON.
• Via the Watson platform, IoT information can be enter
into its blockchain suite. Such information can be
transfer from RFID chips, barcode scans or mobile
devices.
source:http://thenextweb.com/apps/2016/02/16/ibm-has-just-open-sourced-44000-lines-of-blockchain-code-on-github/
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
From Dark Net to Saviour?
• Is Blockchain a collaboration enabler?• A basis upon which people/entities can easily collaborate with distant
strangers/entities
• Is Blockchain an asset sharing enabler?
• Will Blockchain lead to a self governing IoT society based on voluntary institutions via voting?
• Will Blockchain lead to a large scale de-centralized collaboration?
• Will Blockchain be able to run a mutual insurance pool?
• Will Blockchain be able to establish a mutual credit system?
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Blockchain Research Group
W u Yu T i n g Z a n g M e n g Yu Sun Ming
Chen WanFeng Huang YiYa Lee YinHao
[email protected] [email protected]
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Join our Blockchain, be A new node
!
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen
Acknowledgements
•8btc forum•Mentioned companies
•Authors of cited websites
For sharing knowledge and information of Blockchain!
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen