20170620 MEETUP intro to blockchain and smart contracts (2)

Koen V. presented the practical approach in the context of a financial institution. He touches upon:
How do you explain complex (technical) concepts like blockchain and smart contracts to the business? (through a 6 branch model)
How do you prioritise potential experiments and investments? (through a 6 branch model)
When don't you use blockchain or smart contracts?
What are actual experiments and projects in the blockchain / smart contract pipeline?


Original publication: https://www.slideshare.net/koenvingerhoets/blockchain-smart-contracts-and-use-cases-for-the-legal-hackers

Link to the meetup follow-up page: https://www.meetup.com/Brussels-Legal-Hackers/messages/boards/thread/50920056

Legal hackers: https://www.meetup.com/Brussels-Legal-Hackers

1. Koen Vingerhoets

2. Agenda
Keybenefits of DLT
Blockchain usecases
Conclusion

3. Understanding distributedledgers
\\Nomen estomen : blockchain
A transaction is
-Declarationof anincident
-Pictures of the accident
-Signedcontract
-A proofof payment
-An offer fromcarrepair
-Steps in the RDR wizard
-…

4. Understanding distributedledgers
\\Encryptionvshashing
vs
1.Everyhashis unique
2.Infinitlyreproducable
3.Oneway traffic
A hashis NOTunique

6. Blockchain : a business definition
The blockchain is, froma businesspoint of view,
A sharedplatform
On whichpartieswhodon’tknowor trusteachother
Are abletocollaboratewithrespect forprivacy
Without relyingon a possiblycorrupt administrator.

7. Blockchain : a database withbenefits

8. Transparency
Blockchain : a database withbenefits

9. Transparency\\Permissionedvspermissionless
vs

10. Ownership
Transparency
Blockchain : a database withbenefits

11. Ownership\\How valueis stored
Nicki -> Koen
IN 0,8 BTC
Wim -> Koen
IN 0,6 BTC
Koen -> Thomas
OUT 1 BTC
Wim -> Koen
REST 0,4 BTC
Koen receivestwopayments
-0,8 BTC fromNicki
-0,6 BTC fromWim
Koen transfers 1 BTC toThomas
-0,8 BTC + 0,2 BTC
-0,4 BTC is unspenttransaction
•(A defined number of) assets are
stored on the blockchain
•Each asset is identified
•Assets are divided
•Assets are transferred (not copied)
=> Clear view on who owns what when.

12. Ownership
Transparency
Traceability
Blockchain : a database withbenefits

13. Traceability\\Defenseof the sequence

14. Ownership
Transparency
Traceability
Distributed
Blockchain : a database withbenefits

15. Distributed \\Centralizedvsdistributed
Trustedparty &
Single point of failure

16. TrustOwnership
Transparency
Traceability
Distributed
Blockchain : a database withbenefits

17. Trust \\Consensus as a service

18. TrustOwnership
Transparency
Traceability
Distributed
Smart contracts
Blockchain : a database withbenefits

19. The problemwithsmart contracts

20. Smart contracts: a definition
A smart contract is anagreementwhoseexecutionis bothautomatedandenforceable.
•The actual“transaction” amongpartiesis expressedthroughandindependently
executedbycomputer code, no party canblock itor otherwisetamperwith.
•It constituteslegallybinding rightsandobligationsof the involvedparties.
Advantages:
•Partiesare in consensusat alltimesas tothe existence, natureandevolutionof
the factsshared amongthem, whichare governedbythe program.
•Usedtosatisfy
•common contractualconditions,
•lowertransaction costsandrisk, and
•eliminatethe needfortrustedintermediaries.

21. Smart contracts: a bunchof code

22. Smart contracts: a workflow

23. Smart contracts: a RicardianContract

24. TrustOwnership
Transparency
Traceability
Distributed
Smart contracts
Blockchain : a database withbenefits…
… toshare withourfriends...

25. Blockchain : a database withbenefits…
… toshare withourfriends...
… tohave a single shared source of truth.
Blockchain:

26. Agenda
Keybenefits of DLT
Blockchain usecases
Conclusion

27. Blockchain : a new paradigm

28. Company 28
KBC Decisionmodel (© David Birch)

29. Company 29
•Dependingon the usecase, a specificDLT benefit mightbethatimportant
in order tochooseforDLT.
•It is notthateverythinghas toscore 4 or 5
Trust
Ownership
Traceability
Transparency
Distributed
Smart contracts
Keyelementsare scoredin a spiderdiagram

30. Maatschappij 30
Blockchain willnotsolve:
•Organisationalproblems
•Slow processes
•Data Qualityissues
•Legal recourse
•Fraudulentpurposes
•…
Blockchain has a numberof technicalchallengestosolvewrt:
•Scalability
•#Transactions per unit of time
•Network size
•Latency(Time untiltransaction confirmed)
•…
Whennottousea DLT

31. Ourexperiments/ projects
Trade Finance
Payments
KBC Securities
KBC Insurance
Digital Identity (KYC)
Banking Products
R3 CEV
B-Hive
…

32. KBC Insurance | Document Authentication

33. Trust Chain -yourdigital documentson theblockchain
Why?
How do we, as insurer,
secure trustof our customers
in our digital documents,
now and in the future?

34. Trust Chain -yourdigital documentson theblockchain
What
Authentic
Valid
2-sided

35. Trust Chain -yourdigital documentson theblockchain
VALID FROM
26 April 2017
VALID
FROM
VALID
FROM
VALID
FROM
VALID
FROM
VALID
FROM
Proofof Authenticity
Proofof Existence
Proofof Validity

36. B-Hive| Life Insurance

38. KBC Bank –credits| Carloans

39. As Is: Check investment evidence–traditional process
customer
branch
HQ
invoice
Check
invoice
Registers
invoice
Scans invoice
Credit =
approved
Paycredit
garage
invoice
Payforcar
Receives
payment
Extra check invoice(natural
person ifamount> 10 K)

40. ToBe: Check investment evidence–blockchain
customer
branch
Credit =
approved
garage Receivesamount
Blockchain
approved
credit?
HQ
Confirmsinvoice,
delivery and
choosesPayment
Confirms
order & data
Uploads
order and
addsref,
Amount
VINnbr
Initiates
Pickup car&
uploadsfinal
invoice
Check invoice-> scoring
garages

44. Identity on ledger

45. Groundrulesonline identity
-Youadministrateyourownidentity
-Youshare partsof youridentity
-Youdecidewhattoshare
-Youridentityfollowsyourlife
-Transparencyis key
-Portable andusableidentity
-The lessershared, the better
-Protectthe user
Naar https://github.com/ChristopherA/self-sovereign-identity/blob/master/self-sovereign-identity-principles.md

46. Identity Reputation
Access
Feedback
KYC service
Uberservice
Customer loyaltycard

48. Agenda
Keybenefits of DLT
Blockchain usecases
Conclusion

49. Blockchain & financial institutions: the forgottenwords
LIABILITY GOVERNANCE REGULATIONS

50. 1.Blockchain strategyis aboutcollaboration.
2.NotjustIT, alsobusinessis involved(risk appetite).
3.Unpredictablereactionsof regulator &Government.
4.Financial signals(ROI) are problematic.
5.Radicaluncertaintyis the norm.

51. We
The financial system relieson trust & data.
Blockchain istrust & data.

52. Hi!
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More info, questionsor remarks?
[email protected]
Twitter : @IthronKoen