. However, blockchains face challenges around governance, volatility, centralization of mining power, and inherent inefficiencies. Their use also needs to be evaluated based on the type of data and transactions

1. UNDERSTANDING
BLOCKCHAINS
t: @blockstarsio
w: BlockStars.io
e: info@blockstars.io

2. FIRST WHO THE HELL ARE
THESE GUYS?

3. @jamie247 @aronvanammers
13 years in startups, 6 of those consultancies
focused on multi-market, cross departmental
digital innovation & change management
across complex global enterprise inc. Honda,
Nike, Mastercard, Tesco.
As an entrepreneur he understands how to
assess new market opportunities, build teams
and convince money men to make the jump.
10 years CTO of I&DT, building full-service
SaaS solutions for the Dutch medical sector
(Curasoft).
With a background in model driven software
development, he is passionate about building
useful, high-quality, reusable and innovative
software, continuous organizational
development and entrepreneurship.
TOGETHER WE WILL
FUND & LAUNCH 5
BLOCKCHAIN BASED
STARTUPS ACROSS;
INSURANCE,
ECOMMERCE, FINTECH
AND GAMING IN NEXT 12
MONTHS

4. WHAT IS A BLOCKCHAIN?

5. ‘A distributed database that serves as a public ledger’
= Truth Consensus
Hard Definition

6. Just a distributed database
Watch video 3:20 - 7:40

7. and yet just the Next Web
● The Social Web connected us all, globally and
real time.
● Whilst liberating it has raised serious concerns
around privacy, identity and the security of the
systems that power it.
● Greater connectivity and user data creation the
problem has become compounded.
● The Social Web with its free tools has made
people’s identity its product.
● ‘Data is the new oil’ ‘if its free you're the product’
are common expressions.
● It’s no coincidence the next phase of The Web,
powered by blockchains, is the ‘Trust Web’.
● Infrastructure that removes questions of trust in
p2p

8. AUTOMATION
OF WORK
ARTIFICIAL
INTELLIGENCE
Convergence / Nexus
IOT
BIG DATA
Blockchains are the how all these things are: scaled, secured,
transparent and codified with ethics.

9. Current and historical data is verifiable
Executed program logic is verifiable (“smart contracts”)
Programs and devices can become autonomous actors
Blockchain characteristics

10. WHY ARE THEY USEFUL?

11. GLOBAL FRICTIONLESS
EXCHANGE
SCALE: Limitless
scale of connectivity &
participation
TRUST: Removal of
issues of trust between
actors
COST: Removal of
transactional cost
barriers to fractions

12. AREN’T THEY JUST ABOUT
BITCOINS?

13. Decentralise Everything:
ecosystem
Snapshot as of 23/06/15 See a live view here www.blockstars.io/ecosystem/charts/

14. Decentralise Everything: new apps

15. GENERAL CONCEPTS EXPLAINED

16. • Designed as decentralized currency
• Solution to the "byzantine generals problem"
– No central control, yet a minority of bad actors can't
game the system
• Inbuilt digital scarcity
• Trustworthy ledger without the need to trust a single
party
Bitcoin Blockchain Purpose

17. 1. Tokens
2. Electronic Transactions
3. Processing Hardware
4. Wallets
8 Core Elements of blockchains
See descriptions here: https://www.blockstars.io/blog/2015/02/what-is-a-blockchain/
5. Marketplaces
6. Governing Bodies
7. Exchanges
8. Applications

18. Bitcoin Blockchain Overview

19. Bitcoin Blockchain Overview
Mining (committing new
transactions, deliberately
wasteful)
Distribution & Verification
(all users, efficient) - full or light nodes

20. Smart contracts: (small) complete computer programs
Deliberately wasteful mining is not inherent to blockchains
• Private/semi-public blockchains
• Other consensus mechanisms (e.g. proof of share)
• Sidechains: future of Bitcoin?
Advanced blockchains

21. More advanced blockchains
Mining (committing to the
database, degrees of
centralisation, efficient)
Distribution & Verification
(all users, efficient) - full or light nodes
Smart Contracts
shared rules
between all
participants.
Part of the shared
blockchain.

22. • If core logic is verified and incorruptible (smart
contracts), higher levels of automation can be
achieved.
• Automation beyond the business: decentralized
autonomous organization (DAO)
–Participants have a stake
–New forms of collaboration, commerce
Automation

23. BITCOIN BLOCKCHAIN
CHALLENGES

24. • Governance. Who governs, how & to what end?
• Volatility from conflict as a currency and asset class
• 1% already own 99% of bitcoins and new issuance is controlled
• Possibility of a 51% attack (already 60% miners driving agenda)
• Inherent conflicts / trade-offs as a universal solution (currently
scalability / block size)
• Constant possibility of a hardfork http://bit.ly/1eSmKOx
• System always fighting efficiencies in mining / deliberately wasteful
• What data is / isn’t stored directly in bitcoin blockchain?
Bitcoin Challenges

25. CURRENT STATE &
LIMITATIONS

26. Bitcoin’s Future..?
Assumption being Bitcoin is even needed beyond payments
infrastructure

27. DApp Stacks

28. • Technology largely at infrastructure level
• Non bitcoin linked development generally
Ethereum based (Eris being a derivative of)
• Lots of initiatives at early stages with many
duplication of tasks around key functions
• Most deliberately proof of concepts to raise
funding not consumer ready
• Limited standards in DApp dev
State of DApp tech stacks

29. 9 x Building Blocks For Success
You can see each explained
in detail here:
http://bit.ly/1CCpuVf
4. IDENTITY 5. REPUTATION
3. ROLES &
RESPONSIBILITIES2. ON / OFF RAMPS
6. GOVERNANCE
1. BRIDGES
7. USABLE
SECURITY
8. TOKEN OF
EXCHANGE
STABILITY
9. ECONOMICALLY
VIABLE
PROCESSING
NETWORKS
We believe there needs to be
in place at least 9 building
blocks for a scalable
blockchain startup community
focused on building businesses
that rely on Dapps
(Decentralized Apps)

30. Connecting the dots
As mentioned there are still
fundamental layers to fully secure the
network around standards. One
example is FreeTrust’s collaborative
commercial attempt to develop
bottom-up portable identity &
reputation but there are many more all
of which we try to directly support and
engage with.

31. WHY USE A BLOCKCHAIN AT ALL?

32. • Reading and authenticating fast, efficient, no
central bottleneck, but processing transactions is
slow
• Private data doesn’t belong on the blockchain
itself: data and logic is (semi-)public and identity
can be triangulated
Probably not for everything...

33. Clear cases:
• Verifiability
• Traceability
• Collaboration between organizations within shared
incorruptible rules
• Devices as economic actors
More usage models to be discovered as it’s early
stage
... yet unbeatable for some things

34. • Front ends: largely common web tech, with higher
security standards
• Large pools of data: use peer-to-peer storage like
IPFS
• Blockchain: hashing, timestamping, verified
execution
Blockchains in the tech landscape

35. WIDER SOCIAL CONTEXT

36. The Trust Economy is broken.
Never before has there been lower
trust in institutions*; big business,
politicians, media and the financial
services industry.
*According to Endelman Trust Survey 2015
Blockchains can restore trust to:
● Data Privacy / Security
● Supply chains
● Governance
● Tax & accounting
● Corporate fraud
● Market manipulations

37. • Origins; from crypto developed for ‘trustless’
environment of war
• Trustless vs Trustful (you still need to trust something)
• Offers a shortcut to exchange (cultural / economic)
• Ethics can literally be hardcoded at genesis and
changed only by consensus
• Each node (with permissions) can audit part or all of
network’s entire history
Blockchains = #Trust

38. Trust = New Currency
• As you will see from Apple’s attacks
on Facebook & Google companies
are waking up to fact trust is the
battlefield
• Are Apple you next competitor?
• Trust is THE new battle field
• As we move from closed platforms
of control to open distributed
networks loyalty becomes more
fluid
• Friction to move based on trust and
ethics

39. Lessons from Napster
Napster was simply a free algorithm that allowed people to share
their music libraries through a peer-2-peer network of computers
with pseudo anonymity. Its similarities with blockchain include:
• Facilitation of peer to peer transactions / transfer
• Regulatory / business model sandbox
• Centralisation of servers was the legal weakness
• Napster legal case attacked Roles & Responsibilities
(something still undefined with DAOs)
The guys from Napster failed because they were kids with a
great idea but no contacts in the entertainment industry. It was
Apple that wrote the rules WITH the establishment. We think
major blockchain innovations in many industries will require more
than just coding skills. It will be more renovation than revolution.

40. Follow us for more
@blockstarsio