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Griffith University Blockchain Presentation
25 May 2016
Agenda
The origins of the blockchain
What is a blockchain
What are the benefits of the blockchain
Proposed Blockchain uses
Why is blockchain a hot topic
Smart Contracts and Legal Implications
Road Blocks in the development of Blockchains
as a disruptive Technology
Conclusion
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What is a blockchain
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What is a blockchain
No Central party will control the blockchain;
BUT some private blockchains that are being
developed will be controlled by a central
authority. In general, being a distributed leger
a number of copies will be established which
makes it difficult for unauthorised third parties
to successfully hack every copy of the ledger.
Therefore there is no single point of failure. It
would require a hacker to simultaneously
attack at least 51% of all copies which is just
not feasible.
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What is a blockchain
The bitcoin blockchain is completely
transparent with every participant having
read access to the entire blockchain and
being able to add to the blockchain when
they wish to effect an authorised transaction.
The bitcoin blockchain is known as a
permissionless blockchain or open
blockchain.
There are being developed permissioned
blockchains which will only allow authorised
persons having the right to read and add to
the blockchain. R3CEV is an example of this.
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Field
4 bytes
Block Size
Block Header
80 bytes
Transactions
Description
The size of the
block, in bytes,
following this field
Several fields form
the block header
How many
transactions follow
The transactions
recorded in this
block
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TX1
TX2
TX3
TX4
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Block header
Size
Field
Description
4 bytes
Version
Merkle Root
4 bytes
Timestamp
4 bytes
Difficulty Target
4 bytes
Nonce
32 bytes
32 bytes
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Version Previous block hash Merkle root Time stamp Target difficulty Nonce
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Transaction B
Transaction C
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Disadvantages of blockchain
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Blockchain disadvantages
Blockchains by themselves do not provide any
advantage. It is only when other applications are
layered on top of them that there is a benefit.
As Sir Mark Walport UK Chief Scientist noted: the
implementation of distributive ledgers with embedded
smart contracts should lead to substantial improvements
in compliance, cost efficiency and accountability.
BUT there are some real outstanding legal issues involved
in so called smart contracts.
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Blockchain disadvantages
Blockchains standards have not been finalised as this is
an evolving technology. Work need to be done of
settling the data structure for all transactions whether it is
bitcoin or some other transaction that involves
blockchains.
There are currently billions of dollars invested in legacy
systems. The simplest transition is for the currently
deployed data repository infrastructure to remain in tact
and for blockchain applications to be developed which
can interrogate the blockchain and transfer the
collected data to the current legacy systems on a
temporary basis for reporting purposes onlu. Once the
reports are completed the temporary repository can be
wiped.
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Insurance Fraud
How does the insurance company determine
that the person claiming ownership actually is
the owner or has an insurable interest?
The insurance company can interrogate the
blockchain using the serial number/VIN as the
reference point to determine ownership.
This aspect alone should substantially reduce
insurance fraud.
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2.
3.
4.
5.
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7.
8.
What are the legal risks not only with regulators but
also with clients,
9.
10.
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Conclusion
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Conclusion
Blockchain is clearly at this point in time an immature
technology but is advancing at a rapid rate.
Morgan Stanley estimate that commercial systems with
Regulatory approval will not occur until 2017/2018.
There is great promise and investment occurring in this
area.
The financial sector is leading the way but other sectors
like pharmaceuticals are rapidly looking at this
technology.
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Conclusion
Regulators across the world are interested in this
technology and are greatly assisting in the development
and sandbox deployment of blockchain solutions.
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?? Questions ??
5 May 2016