GBCSA 2019

About

Borderless Transparent Censorship Resistant and Immutable

"

My ventures are not in one bottom trusted, Nor to one place, nor is my whole estate. Upon the fortune of this present year

"

William Shakespeare

"A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers."

Essential prerequisites that set the stage for modern Blockchain technology

• 2007-2008: Satoshi Nakamoto’s whitepaper - Solution to BGP

• 2001: SHA-256d finalised (comes out of NSA labs)

• 1999-present: Byzantine fault tolerance* (PBFT etc.)

• 1999-present: P2P data networks (MojoNation & BitTorrent, Napster,

Gnutella, i2p etc.)

• 1998: B-money, an "anonymous, distributed electronic cash system"

• 1997: HashCash; Bit Gold (Nick Szabo)

• 1992-1993: Proof-of-work for email spam filters

• 1991: Cryptographic timestamps

• 1975-1980: Public key cryptography (PGP, RSA)

• 1979: Hash (Merkle) trees

Smart Contracts

A Smart Contract is a a self-executing and self-enforcing computerised transaction protocol that executes the terms of a contract.

Benefits:

No intermediaries

Full confidence in execution

Accuracy

Transparency

Clarity

Speed

Security

Efficient

Paperless

Permanently stored

Vast cost savings

Source: PriceWaterhouseCoopers

Nick Szabo in 1995 defined a contract as being “a set of promises agreed to in a meeting of the minds [which] is the traditional way to formalize a relationship.” Such contracts are a pillar of a free market economy and can be useful in business relationships, marriages and politics.

Szabo saw early on that computers were making it possible to run algorithms that used to be too costly, and believed algorithms eventually would be developed for what he termed “smart contracts.” He defined this as “a set of promises, specified in digital form, including protocols within which the parties perform on the other promises” without the use of artificial intelligence.

Advantages of Blockchain

Removal of intermediaries can reduce cost and complexity

Transparency - multiple parties share data

multiple participants can view common information

Increased efficiency and speed - traditional processes are often paper heavy processes that require third parties

Participants need to trust that the actions that are recorded are valid

Interactions are time sensitive. Reducing delay has business benefit

Security - Transactions must be agreed upon before they are recorded.

• Records in centralised databases usually managed by system administrators can be edited or deleted where blockchains have immutability.
• Blockchains are kept synchronised through consensus mechanisms so that a single ‘state’ is replicated across all participants rather than a third party needing to reconcile databases and transactions after the fact.
• Invalid transactions are not permitted thus trust is managed at the agreed protocol level.
• Depending on the specific blockchain protocol employed and its accompanying features, the timestamping and immutable nature of blockchain could enhance data integrity, thereby reducing the load on data stewardship functions.

Blockchain Basics

"Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.”

Several Key Elements:

• Distributed Database without a central controlling authority (decentralised) - censorship resistant, secure, always online
• Transactions and ‘Current State’ agreed as valid via algorithmic consensus - stakeholders agree on rules of game
• Replicated Ledger is append-only - time-stamped ‘states’ chained immutably and permanently together
• Growing list of records linked cryptographically so that any changes are reflected downstream on chain

Areas of Focus in the Circular Economy

Source: Ellen Foundation

+

Product security

& Temp Control

Process Automation

Track & Trace

End-End Supply Chains

Smart contracts

wrt self execution - automated payments

Rapid Response to Changes in Supply and Demand

Provenance of Building Materials - follow footprint

P2P Trading of Energy - facilitation and monetisation

Use Cases

Multiple processing partners in several countries

Ocean bound plastic waste - material not been landfilled and are prone to enter waterways.

In developing countries, 80% of plastic refuse comes from areas with high level of poverty and no effective waste management systems.

Social Plastic - A blockchain reward system made it possible for people to safely earn and spend Plastic Bank digital tokens.

Created a system of plastic exchange, similar to a currency exchange powered by IBM mobile platform using blockchain technology.

Many collectors lack bank accounts but have mobile phones that can support digital transactions.

The future will result in an environment of greater personalisation and customisation.

In both instances, the token represents distributed ownership of the underlying assets value but not the asset itself, democratising the process of ownership.

A new “tokenized” economy offers tremendous potential for creating a more efficient and inclusive environment in which tangible and intangible assets can be traded through greater liquidity, accessibility, transparency and faster and cost effective transactions.

Use Cases

Energy Trading - Environmental Commodities Trading

The rise of autonomous vehicles is set to be transformational as the market is set to reach USD 42 billion by 2025.

To provide reports to its clientele, Goodr uses blockchain to keep a data ledger of things like how much food the client wastes, how much money is being lost, what food item is wasted the most, and environmental impacts.

Sophisticated AI tools and distributed ledger technology will empower individuals to better learn from the experiences of others.

It enables residents to trade solar energy with each other and monetise their roof space. It means residents can buy from those closest to them.

For developers or building managers, the platform means you can offer more attractive rates to residents in comparison with traditional service providers.

Detailed usage data allows you to track consumption and be more energy efficient in common areas, because you’ll be able to see where the bulk of energy is being used, and by whom, and manage it more efficiently.

Tack an organizations’ surplus food waste from collection to donation, enabling tax deductions for organizations fully compliant with the Internal Revenue Service (IRS) in the United States, reducing greenhouse gas emissions and creating social good by moving edible surplus to communities in need.

New autonomous vehicles will inherit the complete skill set of their ancestors and peers so collectively, these cars can learn faster than people.

The machine world and social world will therefore operate in unison.

Power Ledger and Silicon Valley Power have established a template for a blockchain enabled solution for the measurement, reporting and verification of carbon credits, replacing a manual collection process that could often take months to validate.

Waste Management

Blockchain technology can also be used in other waste management industries and play a pivotal role in ensuring recyclables do not end up in landfill.

Digital tracking data allows for deeper analyses of supply chains. Utilising this technology with IoT devices and RFID, greater efficiencies can be gained and roque activity marginalised.

Such activity has been prevalent in the tire recycling industry across the globe.

Each year, 1.6 billion new tires are generated and around 1 billion of waste tires are generated.

The collection and recycling of tires and prevention from landfill, sensitive habitats and abandoned areas remain a challenge for the industry globally.

• Raw materials
• Tire manufacturers
• Buyers & Sellers
• Waste Collectors

• Recyclers
• Logistics Companies
• Government - Regulatory & Governance

• The raw materials constitute the basic unit out of which a tire is produced.

• The tire manufacturers could therefore tokenize the raw materials. Digital Twin created that is a depiction of the raw materials in the form of a token utilised to trace the raw materials throughout the supply chain.

Digitalise Raw Materials

Non-fungible asset - token which through cryptography would help to verifiably prove ownership and authenticity of the asset.

Fungible Asset - tracing a specific batch of RM through SC. Ref Money.

Digitalise

Token Generation

The raw material producers therefore generate tokens.

The logistic companies take the raw material and the equivalent amount of tokens that are representing the amount of raw materials in weight.

The manufacturing plant receives both tokens and raw materials and produces tires.

Token Use

Create a batch token which represents the weight of raw material utilised to make a batch of tires.

As tires are sold, a quick response code could be scanned to verify the authenticity of the tires in the supply chain.

The tokens therefore represent the validation of the genuineness of the product itself.

ELT

As the tires are replaced in the future and ELTs transported to waste tire processors, there is full visibility and traceability along the entire supply chain.

Privacy

The privacy of each stakeholder could be controlled through the private issuance of tokens utilizing ZKPs.

One party (the prover) can prove to another party (the verifier) that they know a value x, without conveying any information apart from the fact that they know the value x.

Ownership of blockchain assets can be transferred without revealing the confidential transaction details while still ensuring regulatory compliance according to custom-defined business rules.

In the event that a Government required oversight of the supply chain, they could be provided with an auditor role utilising viewing keys in order to gain industry insights into the network.

The provision of end to end visibility into multiple enterprise supply chain networks utilising blockchain technology enables multiple stakeholders to track and trace end of life tires creating trust by recording indisputable transactions on the distributed ledger.

Change

There is a lack of permanency in blockchain implementations and future thought leadership around them

Thought leadership, Knowledge capital, and Transformative thinking

Operationalising blockchain

Transitioning from challenges to opportunities

• Unclear impact to overall business strategy & ROI, clear and tangible benefits articulation.

• Lower hanging fruits take precedence, competing priorities.

• Leveraging partnerships, joint-ventures & consortiums.

• Appetite for disruption & disruptive business models.

• Organisational change management, goals and outcomes, managing change.

• It has been estimated that a blockchain is about 80 per cent business process change and 20 per cent technology implementation.

• This means that a more imaginative approach is needed to understand opportunities and also how things will change.

Thank you!

Bitcoin is not “unregulated”. It is regulated by algorithm instead of being regulated by government bureaucracies. Un-corrupted.

Andreas Antonopolous

zarrebini.com

lnked.in/mzarrebini

mehran@zarrebini.com

@mzarrebini