Blockchain-Technology_-A-New-Approach-to-Provenance.pptx

Blockchain-Technology_-A-New-Approach-to-Provenance.pptx

1. Blockchain Technology: A New Approach to Provenance Presenter: Nelson M. Rosario Principal at Smolinski Rosario Law Adjunct Professor, Illinois Tech Chicago-Kent College of Law Visiting Professor, IE Law School Date: March 12, 2019

2. What is new here? 2

3. What is Blockchain? 3

4. The future ? 4

5. The future? A scam ? 5

6. The future? A scam? Magic Internet Money? 6

7. Blockchain technology is mainly about one key principle …. 7

8. Blockchain technology is mainly about one key principle…. trust 8

9. Blockchain technology allows for a new way to manage trusted relationships without using a central counterparty 9

10. Now we can trust that information transacted on a network we do not trust has not been tampered with 10

11. IT ALL BEGINS WITH BITCOIN... 11

12. THE DOUBLE SPEND PROBLEM 12 HOW CAN YOU BE SURE THAT THE DIGITAL MONEY YOU RECEIVED HASN’T ALREADY BEEN SPENT? TRADITIONALLY BANKS PROVIDED THE SOLUTION BITCOIN OFFERED A DECENTRALIZED SOLUTION

13. TRANSACTIONS ON THE BITCOIN NETWORK ARE PUBLIC TO EVERYONE IN THE NETWORK 13

14. ANYONE CAN VERIFY THAT FUNDS ON THE BITCOIN NETWORK HAVEN’T BEEN SPENT YET 14

15. BITCOIN RESULTS IN THE FIRST UNIQUE VERIFIABLE DIGITAL PROPERTY 15

16. 16 PUT ANOTHER WAY NOW WE HAVE TRUE DIGITAL SCARCITY

17. THE BUILDING BLOCKS OF BLOCKCHAIN TECHNOLOGY NETWORKS+ LEDGERS + CRYPTOGRAPHY = BLOCKCHAIN APPLICATIONS 17

18. THE BUILDING BLOCKS OF BLOCKCHAIN TECHNOLOGY 18 BY COMBINING THESE THREE TECHNOLOGIES AND ADDING SOME ECONOMIC INCENTIVES = BLOCKCHAIN APPLICATIONS

19. Networks : Centralized, peer-to-peer 19

20. A GROUP OF PEOPLE THAT SHARE INFORMATION AND RESOURCES 20

21. MUCH OF HUMAN HISTORY CONCERNS SCALING TRUST AND GROWING NETWORKS 21

22. THE WAY TRUST HAS BEEN SCALED HAS BEEN THROUGH THE USE OF COORDINATION TECHNOLOGY 22

23. COORDINATION TECHNOLOGIES 23 WRITING TELEGRAPH TELEPHONE THE INTERNET BLOCKCHAIN APPLICATIONS?

24. NETWORKS - TYPES 24

25. MOST BLOCKCHAIN NETWORKS ARE ORGANIZED AS DECENTRALIZED NETWORKS 25

26. MOST CRYPTOCURRENCY BLOCKCHAINS ARE PEER TO PEER NETWORKS 26

27. PEER-TO-PEER NETWORK 27

28. HOW SHOULD WE ORGANIZE INFORMATION ON THESE NETWORKS? 28

29. ONE WAY IS TO USE A LEDGER 29

30. Ledgers : centralized, distributed 30

31. LEDGERS ARE OLD AND STILL IN USE 31

32. LEDGERS - ISSUES LEDGERS CAN BE MAINTAINED BY A CENTRAL PARTY LEDGERS CAN BE MAINTAINED BY MULTIPLE PARTIES THAT THEN NEED TO RECONCILE THEIR LEDGERS 32

33. LEDGERS ALLOW PARTIES TO COME TO A CONSENSUS ON WHO OWNS WHAT 33

34. NOT ALL LEDGERS NEED BE CENTRALIZED OR RECONCILED 34

35. DISTRIBUTED LEDGERS ARE SHARED/REPLICATED LEDGERS 35

36. DISTRIBUTED LEDGERS TYPICALLY LEVERAGE PEER-TO-PEER NETWORKS 36

37. THE DIFFICULTY WITH DISTRIBUTED LEDGERS IS HOW DOES INFORMATION GET ORDERED CORRECTLY? 37

38. OR PUT ANOTHER WAY HOW DO WE COME TO CONSENSUS? 38

39. BYZANTINE GENERALS PROBLEM 39

40. WHAT ABOUT KEEPING THINGS SECRET? 40

41. Cryptography : encryption, decryption, hashing, digital signatures 41

42. CRYPTOGRAPHY IS ALL ABOUT SECRETS 42

43. CRYPTOGRAPHY IS AS OLD AS WRITING 43

44. MOST CRYPTOCURRENCY BLOCKCHAINS USE PUBLIC-KEY CRYPTOGRAPHY 44

45. THEY ALSO USE HASHING AND DIGITAL SIGNATURES 45

46. Great, now what? 46

47. Applications : blockchain, cryptocurrency, smart contracts, daos 47

48. Blockchain: A definition A blockchain is a tamper-evident censorship resistant append-only ledger of transaction data Note: There is no universally accepted definition of what a blockchain is 48

49. Two main flavors of blockchain Permissionless Anyone can join People come and go as they please Usually focused on unique crypto tokens, i.e. cryptocurrency Lots of questions concerning governance, scalability, legality, etc. Permissioned Much more strictly controlled Favored by large corporations Need permission to join, and/or view the information stored on the chain Far less questions concerning governance, scalability, legality, etc. 49

50. The distributed ledger can be represented as blocks of transactions that are linked together through cryptography 50

51. 51 Source: https://vitalflux.com/10-definitions-to-understand-blockchain-better/ Example Blockchain

52. Got a blockchain. What can you do? 52

53. Got a blockchain. What can you do? Cryptocurrency - verifiably unique digital property Smart Contracts - automated agreements that execute in a fault tolerant manner Distributed Autonomous Organizations (DAOs) - leaderless organizations? 53

54. CRYPTOCURRENCY: GENERALLY Cryptocurrency: A Definition “...limited entries in a database no one can change without fulfilling specific conditions.” GOOD WORKING DEFINITION CRYPTOCURRENCY RESULTED IN THE FIRST VERIFIABLE UNIQUE DIGITAL PROPERTY HERE THAT MEANS ENTRIES IN A DISTRIBUTED LEDGER STORED ON A DECENTRALIZED NETWORK

55. CRYPTOCURRENCY: GENERALLY CRYPTOCURRENCY COMES IN MANY DIFFERENT VARIETIES DIFFERENCES BETWEEN CRYPTOCURRENCY ARE CENTERED ON GOALS FOR THE CRYPTOCURRENCY PRIVACY LEVEL HASH ALGORITHM CONSENSUS MECHANISM

56. SMART CONTRACTS “A smart contract is a computerized transaction protocol that executes the terms of a contract.” - Nick Szabo SMART CONTRACTS IN THE BLOCKCHAIN WORLD ARE DISTRIBUTED

57. SMART CONTRACTS IN THE BLOCKCHAIN WORLD SMART CONTRACTS OFFER GUARANTEED EXECUTION IN A FAULT TOLERANT OPEN OFFERS GUARANTEED TO EXECUTE IF CERTAIN CONDITIONS ARE MET

58. Decentralized Autonomous Organizations Blockchain Cryptocurrency Smart Contracts Decentralized Autonomous Organizations 58

59. WHAT ABOUT PROVENANCE??? 59

60. SOME APPROACHES 60

61. Potential Applications 61 Land records Property registry Corporate voting Evidence production Caselaw tracking?

62. Thank you! Nelson M. Rosario | Principal - Smolinski Rosario Law, P.C. | Adjunct Professor - IIT Chicago-Kent College of Law Visiting Professor - IE Law School Firm: [email protected] Twitter: @NelsonMRosario Blog: Crypto Caselaw Minute Personal: www.nelsonmrosario.com 62