Blockchain & Smart Contracts Introduction. Dr. Sebastian Bürgel

Transcription

1 Blockchain & Smart Contracts Introduction Dr. Sebastian Bürgel

2 Does the following make sense?

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4 State-of-the-Art Trade Finance (2017)

5 a letter of credit can weigh 500 grams and comprise 36 documents Beat Bannwart, UBS UBS Project «Batavia», SIBOS 2016, Geneva

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7 1000 USD / Bitcoin

8 The blockchain will be to banking, law and accountancy as the internet was to media, commerce and advertising. Joichi Ito, Director MIT Media Lab

9 ENABLING DISRUPTION IN: Banking Legal services Organization management Internet of Things Supply chain management any marketplace

10 THIS REQUIRES KNOWLEDGE IN: Applied computer science Cryptography Current financial systems Current legal systems Game theory

11 GEDANKENEXPERIMENT Aim: Log financial transactions

12 PROBLEM: MUTABILITY No inherent security against: Hacked database Rogue admin

13 P2P NETWORK How does Alice know, which data to trust?

14 BATCH PROCESSING

15 BATCH PROCESSING

16 CHAIN THE BLOCKS Block number Digital root of block: = = 3

17 CHAIN THE BLOCKS Block number Digital root of block: = = 5 Block number 2 / Digital root of previous block

18 CHAIN THE BLOCKS Block number Block number 2 / Digital root of previous block Block number 3 / Digital root of previous block

19 LET S CHEAT AGAIN! Block number Block number 2 / Digital root of previous block 3 (actually 7! ) Block number 3 / Digital root of previous block 5 (actually 9! )

20 LET S CHEAT PROPERLY! Block number Block number 2 / Digital root of previous block 3 (unchanged! ) Block number 3 / Digital root of previous block 5 (unchanged! )

21 HASHES Data of arbitrary length A message of arbitrary content that could be really, really long! Hash function Hash of constant length (Digest) 0xe883aa0b24c09f

22 AN ANALOGY Human Finger print Data Input! 7c9041be1bfa798 2c1bf2fc41be686 10e80af231c5c8b eb6cf9d6a23f01e cdf1 Hash

23 COLLISION RESISTANCE Finger print

24 COLLISION RESISTANCE 7c9041be1bfa798 2c1bf2fc41be686 10e80af231c5c8b eb6cf9d6a23f01e cdf1 Hash Data Input! Input two!

25 HASH FUNCTIONS IN A BLOCKCHAIN Block number Block number 2 / previous block hash - 3eb571a Block number 3 / previous block hash - a97b

26 HASH FUNCTIONS IN A BLOCKCHAIN Block number Block number 2 / previous block hash - 3eb571a (actually 8a428c ) Block number 3 / previous block hash - a97b130 (actually fb196d )

27 INHERENT VALIDITY: Changes in one block invalidate all following blocks

28 BLOCKCHAIN + P2P NETWORK Ledger Jon Alice Bill Jon Alice Bernhard Ledger Jon Alice Bill Jon Alice Bernhard How does Bernhard (and all other network participants) know that a transaction originates from Alice? 10 ETH to Bernhard Alice Ledger Ledger Bernhard Jon Alice 20 Jon Alice 20 Bill Jon 30 Ledger Ledger Bill Jon 30 Alice Bernhard 10 Jon Alice 20 Jon Alice 20 Alice Bernhard 10 Bill Jon 30 Bill Jon 30 Alice Bernhard 10 Alice Bernhard 10

29 DIGITAL SIGNATURES 10 ETH to Bernhard Message & 10 ETH to Bernhard Message digital signature Message Alice Sender of message Bernhard Recipient of message Alice s private key Alice s public key

30 SIGNATURES IN A BLOCKCHAIN Block number 2 / previous block hash - 3eb571a Signature x810a12b x3c9012c But: Where is the public key with which we can validate a signature? Public key = address And: Where does the public key come from?

31 SIGNATURES IN A BLOCKCHAIN Block number 2 / previous block hash - 3eb571a Signature 0x1d0954 0x x810a12b 0x xf91a x3c9012c EC( GEHEIM ) EC( Passwort123! ) EC( S3B4$T14N ) EC = Elliptic curve, a complex one-way function

32 CONSENSUS What do we include in a block? Who declares a new block? the first one to solve a computational challenge: Find a hash of block content that matches some property

33 CONSENSUS Find a hash that starts with N zeros Block content Nonce Hash xad816e x9a6f x48d816e x0002ba2 Mining: Expensive to calculate, easy to verify

34 BLOCKCHAIN PLUS SMART CONTRACTS Bitcoin-style blockchain Ethereum-style blockchain with smart contracts

35 SMART CONTRACT = Program on a blockchain that can control financial assets.

36 Let s add a contract to our blockchain Block number 1 0xf91a47 0x x1d0954 0xf91a x1d Block number 2 / previous block hash - 3eb571a 0x1d0954 0x x xf91a47 10 Block number 3 / previous block hash - a97b130 0xf91a47 0x1d x xf91a47 20

37 Let s add a contract to our blockchain Block number 1 Payload xb1a12b Address 2 is a contract 1 10 Contract deployment Block number 2 / previous block hash - 3eb571a Contract receives Payload data Hello World! 2 Contract sends money 1 to its creator! 10 Block number 3 / previous block hash - a97b130 Contract Payload creates another contract! x054e120380

38 A new dimension for payments Since ~ years Transaction of financial assets from and to: - People - Organizations

39 A new dimension for payments Since 07/30/2015 3:26 UTC (Ethereum genesis block) Transaction of financial assets from and to: - People - Organizations - Programs

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41 Timelock Smart Contract [github.com/scbuergel/timelock-smartcontract]

42 But this was just for fun Right?!

43 Flight Delay Dapp

44 ARCHITECTURE Flight Delays Suck! You'll love to be late! Get your instant payout in case your flight is late. Data Source (Oracle) Smart Contract deployment Developer Smart Contract Insurance taker Investor

45 Modum.io creates sensor devices leveraging blockchain technology to assert data immutability and public accessibility while saving costs in the pharma supply chain.

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47 THANK YOU!