BLOCKCHAIN OVERVIEW B RAMAMURTHY 2018 ALL RIGHTS RESERVED

BLOCKCHAIN OVERVIEW B. RAMAMURTHY © 2018, ALL RIGHTS RESERVED BINA@BUFFALO. EDU HTTP: //WW. CSE. BUFFALO. EDU/FACULTY/BINA ‘- TEACHING PROFESSOR COMPUTER SCIENCE AND ENGINEERING DIRECTOR, BLOCKCHAIN THINKLAB PROGRAM DIRECTOR, DATA-INTENSIVE COMPUTING PROGRAM 1

TOPICS FOR DISCUSSION • • Blockchain 101 (What is a blockchain? ) Different flavors of blockchain (Beyond Cryptocurrency) Public vs Private vs Consortium Blockchain ‘Basics of using Ethereum (Getting Started with Ethereum) Disrupting your marketplace UB programs around Blockchain Opportunities References 2

BLOCKCHAIN 101 ‘- 3

A BRIEF HISTORY OF BITCOIN BLOCKCHAIN E-Commerce Communication mobile apps … Cryptocurrency: Bitcoin: 2008/2009 Peer-to-peer autonomous digital currency system among unknown peers with no intermediaries ‘Validation, Verification, Immutable recording The Blockchain Protocol The Internet Protocol (TCP/IP) 6/17/2021 4

BLOCKCHAIN: THE DECENTRALIZATION INFRASTRUCTURE (1) ‘- Traditional Centralized System Decentralized System Functions of the intermediaries are shifted 6/17/2021 to the peer participants and the blockchain nodes: Disintermediation: validation, recording, verification using blockchain software 5

BLOCKCHAIN: THE DISTRIBUTED IMMUTABLE LEDGER (2) • Eve Transactions Validate Gather Block Transactions ‘Consensus Verify Confirm Modify Block Chain invalid Block Chain link is the hash of elements of the previous block 6

BLOCKCHAIN: THE DISINTERMEDIATION (3) The infrastructure supports methods for disintermediation: & Recording -- validate, verify and confirm transactions -- record the transactions in a distributed ledger of blocks ‘-- implement a consensus protocol for agreement on the validity of blocks -- create a tamper-proof record of blocks (chain of blocks) Validation, Verification, Consensus, Immutable Recording ➔ Trust, Security All defined by the blockchain protocol, and implemented by software and hardware. 7

SUMMARIZING, BLOCKCHAIN IS ABOUT • Decentralization • Disintermediation • Distributed Immutable Ledger Blockchain is a trust layer on the internet. ‘On a strong foundation of more than 40 years of scientific research (cryptography, hashing, p 2 p, consensus protocols) Enabling automation, accountability, auditability, efficiency, accuracy, fidelity, fairness, and inclusiveness. 6/17/2021 8

‘BEYOND CRYPTOCURRENCY Smart Contracts 9

NON-CRYPTOCURRENCY PAYLOAD • Bitcoin core enabled transactions that enabled a peer-to-peer payment system. • Can we transact something other than digital currency? • Payload of the blockchain could be‘-genetic assets, proxy vote, warning signals, governance data, provenance data, etc. • Many next generation blockchain platforms focused on non-crypto payloads: Hyperledger Fabric. • Some others such as Zcash and Multichain focused on privacy through permissioned network. 6/17/2021 10

BLOCKCHAIN IS NOT JUST ABOUT CRYPTOCURRENCY ANYMORE! E-Commerce Communication mobile apps … Cryptocurrency: Bitcoin: 2008/2009 Autonomous, Decentralized, applications: 2013 ‘- Validation, Verification, Immutable recording Computing infrastructure: Smart contracts The Blockchain The Internet 6/17/2021 11

SMART CONTRACTS • A business transaction may involve computation, conditions, rules, policies, laws, regulations and governing contexts. • Smart contract allows for these real-world scenarios to be realized on a blockchain. • Thus a smart contract enables a wide ‘-variety of decentralized applications of arbitrary complexity to be implemented on the blockchain: • from supply chains to disaster recovery. • Probably many of the applications for the blockchain technology have not been conceived of yet. • Ethereum first introduced the concept of smart contract on the blockchain. (Note: the concept of smart contract itself is not something new. ) 12 6/17/2021

Expanding Ecosystem Type 1: only cryptocurrency Example: Bitcoin Type 3: Only business logic Type 4: Blockchain platform Type 2: Cryptocurrency + as a service: Smart contract business logic + NO cryptocurrency Example: Microsoft Azure Example: Hyperledger Example: Ethereum ‘- 6/17/2021 13

PUBLIC VS PERMISSIONED BLOCKCHAIN • Bitcoin is a public blockchain. Membership is open to all; any body can join and leave as they wish. All the transactions on the chain are available for the whole world even though they may be encrypted. • In a permissioned and private blockchain membership is limited to identities with verified credentials. Example: Hyperledger Fabric ‘ • The blockchain protocol features a membership service to control/manage membership. • A private blockchain is local to a specific business or environment. • A permissioned blockchain is also known as consortium blockchain, since its typical application is for consortium of businesses such as in an automobile domain. Ex: Big Three consortium blockchain of Ford, Fiat Chrysler and General Motor; Blockchain for food industry hosted by FDA. 6/17/2021 14

DAPP STACK ON ETHEREUM BLOCKCHAIN ‘- 6/17/2021 15

‘- EXAMPLE: GREEN ENERGY WITH GRID+ ETHEREUM BLOCKCHAIN DISRUPTING YOUR MARKET PLACE 6/17/2021 16

BLOCKCHAIN IN YOUR BUSINESS • Do not over-fit blockchain into existing working systems. • It is NOT a database. (Instead, use a decentralized database in tandem with blockchain provenance. ) • Blockchain is NOT a panacea for all your problems. • Then what is good for? • Problems with • inefficiencies, ‘- • barriers to adoption, • decentralized users, • peers or users who are operating beyond boundaries of trust, that do not fit well into our centralized model, • Problems with policies, rules, governance, provenance: US Government? NY State? 17

Disrupting the Energy Markets ‘- 18

Energy retail: 50% Admin Overhead ‘- 19

Energy Retail Grid+ on Ethereum Blockchain ‘- 20

Blockchain Roadmap Education Exploration ‘- Evaluation Expand 21

Recommended Roadmap • Educate: Educate yourself about blockchain: Coursera Blockchain Basics course C 1 (no programming required) – This will provide with the basic knowledge and “language” to discuss about the capabilities of blockchain. • If you are a developer or IT person, you go further into C 2, C 3 and C 4. • Explore: Among you, thought leaders, project developers and business users, set up an exploration space, time to explore. • • What are inefficiencies, where are the gaps, ‘- who are we not reaching (customers) Can blockchain help? Recall that it adds an autonomous trust layer. At the end of exploration phase you should have some use cases to try out. For example, supply chain, food safety and recall, frozen transportation, finance and credit, international trade and shipments etc. • Evaluate: Design and implement proof of concept (POC) and assess the impact of using the blockchain technology : UB can help. • Expand into production. 6/17/2021 22

UB INITIATIVES: HOW CAN WE HELP? • • UB SEAS is at the leading edge of educating people about this technology. • SEAS’ Coursera Blockchain “Specialization” • 4 courses of 4 weeks of online instruction each with hands-on components. UB Blockchain Thinklab supported by President’s Circle Club funding ‘- • Educating UB students across the campus • Consulting with regional and international businesses • Promoting Buffalo as a world renowned blockchain hub • Premier event: UB Blockchain Buildathon April 13 -15, 2018 See eth. Buffalo. org • We have a private blockchain testbed for exploration 6/17/2021 23

SUMMARY • Blockchain technology is not about cryptocurrency anymore. • It is used for broad range of applications across many industries: finance, healthcare, government, manufacturing, and distribution. • Blockchain can enable an inclusive economy. ‘ • Blockchain has created exciting new opportunities and innovative application models: • Global collaboration systems, self-governing systems, open government. • Private, public and permissioned models to meet diverse business needs. 6/17/2021 24