Distributed Ledger Technology (DLT) and Blockchain Blockchain and its applications

Introduction Ishmeet Singh, Blockchain Consultant I have built technology products for Fortune 500 companies like MasterCard, MetLife and Adobe. I have also built and scaled data-driven, intelligent technology platforms for hedge funds, finance, e- commerce, travel and healthcare companies.  I consult for and advise multi-million-dollar companies and startups on the application of artificial intelligence, machine learning, big data and Blockchain to solve real world problems.

Session Details Fundamental Concepts What is DLT? What is Blockchain Technology? Types of Blockchains How does Blockchain work? Examples

A collection of transactions or data Ledger A collection of transactions or data Each node in this network maintains its own copy of the ledger. It is the job of the network as a whole to come to a consensus on the contents of each update to the ledger

An asset transfer onto or off the ledger Transaction An asset transfer onto or off the ledger Each node in this network maintains its own copy of the ledger. It is the job of the network as a whole to come to a consensus on the contents of each update to the ledger

Conditions for transaction to occur Contract Conditions for transaction to occur Each node in this network maintains its own copy of the ledger. It is the job of the network as a whole to come to a consensus on the contents of each update to the ledger

Network participants in a distributed ledger network Nodes Network participants in a distributed ledger network Each node in this network maintains its own copy of the ledger. It is the job of the network as a whole to come to a consensus on the contents of each update to the ledger

Peer-to-peer (p2P) Network A decentralized/distributed network of nodes that stores, updates, and maintains a distributed ledger Each node in this network maintains its own copy of the ledger. It is the job of the network as a whole to come to a consensus on the contents of each update to the ledger

Centralized Ledger

Distributed Ledger A consensus of replicated, shared, and synchronized digital data geographically spread across multiple nodes Each node in this network maintains its own copy of the ledger. It is the job of the network as a whole to come to a consensus on the contents of each update to the ledger

Public Key Cryptography An asymmetric encryption scheme that uses two sets of keys: a public key that is widely disseminated and a private key that is only known to the owner Each node in this network maintains its own copy of the ledger. It is the job of the network as a whole to come to a consensus on the contents of each update to the ledger

Public Key Cryptography for Digital Signatures

Consensus Algorithm A consensus algorithm is a process in computer science used to achieve agreement on a single data value among distributed processes or systems. Consensus algorithms are designed to achieve reliability in a network involving multiple unreliable nodes.

Smart Contract A permanent and immutable collection of code that runs on the blockchain

DLT and Blockchain Distributed Ledger Technology Blockchain Directed Acyclic Graphs DLT and Blockchain

What is Distributed Ledger Technology (DLT)? A technology that allows for transactions and data to be recorded, shared, and synchronized across a distributed network of nodes using cryptographic tools and a distributed consensus process in an immutable manner In its simplest form, a distributed ledger is a database held and updated independently by each participant (or node) in a distributed network. The distribution is unique: records are not communicated to various nodes by a central authority, but are instead independently constructed and held by every node. That is, every single node on the network processes every transaction, coming to its own conclusions and then voting on those conclusions to make certain the majority agree with the conclusions. Once there is this consensus, the distributed ledger has been updated, and all nodes maintain their own identical copy of the ledger. 

Each participant in the network keeps records, or a ledger, of all transactions between all the parties that the business interacts with. This process is expensive because of duplication of effort and intermediaries adding costs for their services. Problem Statement Business networks are inefficient, expensive and vulnerable

What is a Blockchain? A decentralized, distributed and public/private digital ledger A type of data structure that stores and transmits data in packages called ‘blocks’ that are connected to each other in a digital ‘chain’ Blockchains employ cryptographic and algorithmic methods to record and synchronize data across the network in an immutable manner Data records are added to the blockchain when multiple distributed parties come to consensus based on pre-agreed rules First implementation of triple entry accounting The third entry in triple entry accounting is cryptography, where we have a cryptographic account of the transaction stored permanently and immutably on the ledger.

Five Key Components of a Blockchain

Types of Blockchains Public Private, Permissioned

Public Blockchain A public blockchain network is completely open and anyone can join and participate in the network. The network typically has an incentivizing mechanism to encourage more participants to join the network Eg. Bitcoin, Ethereum

Permissionless Blockchain

Private, Permissioned Blockchain A private blockchain network requires an invitation and must be validated by either the network starter or by a set of rules put in place by the network starter. A permissioned network places restrictions on who is allowed to participate in the network, and only in certain transactions. Eg. Hyperledger

Permissioned Blockchain

DLT vs. Centralized Ledger

Types of Blockchains Speed of Transactions Decentralization, Transparency

Blockchain Performance Comparison   Permissionless Blockchain Permissioned Blockchain Central Database Throughput Low High Very High Latency Slow Medium Fast Number of readers Number of writers Number of untrusted writers Consensus mechanism PoW, PoS BFT Protocols None Centrally managed No Yes

What are the key Benefits of Blockchain Technology to businesses? Gains in speed and efficiency Reduces Risk Cost reductions Easier auditability Increases Trust Automation and programmability What are the key Benefits of Blockchain Technology to businesses?

Blockchain Applications

Example 1: Bitcoin & Cryptocurrencies

Example 2: Audit and Compliance

Example 3: Supply Chain

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