2. A QUICK HISTORY OF BLOCKCHAIN
Introducing Digital Time Stamps
1
Digital time stamps record the date and time of the occurrence of an event – for example,
when information is being created, modified, or deleted
3. A QUICK HISTORY OF BLOCKCHAIN
Introducing Digital Time Stamps
2
WHAT PROBLEM DID
THEY TRY TO SOLVE?
WHAT WERE THE
PROBLEMS THAT
AROSE?
ENSURING
AUTHENTICITY OF
INFORMATION
TAMPERING
NO CENTRAL
VERIFICATION
4. A QUICK HISTORY OF BLOCKCHAIN
How do you solve the problems associated with digital timestamps?
3
(1) MAKE IT TAMPER PROOF – HASHES AND CODES
5. A QUICK HISTORY OF BLOCKCHAIN
How do you solve the problems associated with digital timestamps?
4
(2) A LEDGER ON THE CLOUD
6. A QUICK HISTORY OF BLOCKCHAIN
How does this work?
5
HASH
DATA
HASH OF A PREVIOUS BLOCK
7. A QUICK HISTORY OF BLOCKCHAIN
How does this work?
6
DATA
FROM
TO
AMOUNT
8. A QUICK HISTORY OF BLOCKCHAIN
How does this work?
7
HASH
34819d7beeabb9260a5c854bc85b3e44
9. A QUICK HISTORY OF BLOCKCHAIN
How does this work?
8
Contains a hash of
the previous block
10. A QUICK HISTORY OF BLOCKCHAIN
How does this work?
9
HASH 178F
PREVIOUS HASH
0000
HASH 593L
PREVIOUS HASH
178F
HASH 613H
PREVIOUS HASH
593L
GENESIS BLOCK
11. A QUICK HISTORY OF BLOCKCHAIN
How does this work?
10
HASH 178F
PREVIOUS HASH
0000
HASH 593L
PREVIOUS HASH
178F
HASH 613H
PREVIOUS HASH
593L
GENESIS BLOCK
736P
12. A QUICK HISTORY OF BLOCKCHAIN
11
This results in… BLOCKCHAIN
- A list of blocks, linked and secured through cryptographic keys
- Each block contains a link to the previous block as well as a timestamp
- By design, the blockchain is inherently resistant to modification
- “distributed ledger technology” that aids in recording transactions between
parties
13. IMMUTABILITY OF THE BLOCKCHAIN
12
- immutable, adjective, unchanging over time or unable to be changed
- Tampering with the blockchain is easy to detect because of “Hashes” and “Blocks”
- HASHES
- hard to back-calculate the original data from the hash
- if the input data changes in the slightest way, the hash changes in an unpredictable way
- BLOCKS
14. APPLICATIONS OF BLOCKCHAIN – SMART CONTRACTS
13
-> When money is paid, an irrevocable
set of actions is put in motion
-> Money is retained and a drink is
supplied
-> The transaction cannot be stopped in
mid flow
-> Money cannot be returned when the
drink is supplied.
-> The terms of the transaction are
embedded in the hardware and
software
15. APPLICATIONS OF BLOCKCHAIN – SMART CONTRACTS
14
- Instance of a code and a programme that interprets the code, accepts conditions, and
decides outcomes
- Characteristics
- Digital form
- Contractual clauses embedded in software
- Performance mediated by technology
- Irrecoverable
- How does blockchain enable smart contracts?
16. APPLICATIONS OF BLOCKCHAIN – LAND VERIFICATION
15
- Presumptive Ownership v Confirmed Ownership
- Title can only be established through transfer
documents
- Onus on buyer to examine all documents and
link them together
- Require a clear trail and record of all
transactions associated with a unit of land
18. APPLICATIONS OF BLOCKCHAIN - CRYPTOCURRENCIES
17
BITCOIN
- First decentralized digital currency
- Mining – record keeping service,
rewarded with bitcoins
- No physical components – only
balances associated with public and
private keys
ETHEREUM
- Platform + Programming language
- Open-ended decentralized software
platform that enables smart
contracts and distributed
applications
- Ether – a vehicle for moving around
Ethereum and running applications
BITCOIN V. ETHEREUM
- Differ in purposes: Bitcoin is an alternative to fiat currency, Ethereum is a platform which
facilitates peer-to-peer contracts and applications via Ether
- While Ether and Bitcoin are both currencies, Bitcoin functions as a payment alternative
while Ether primarily facilitates working and monetizing Ethereum
A smart contract is “a set of promises, specified in digital form, including protocols within which the parties perform on these promises” (Nick Szabo, Smart Contracts: Building Blocks for Digital Markets, 1996) Nick Szabo is widely credited with introducing smart contracts. Uses vending machine example.
Key characteristics: • digital form: it is in computer form – code, data and running programs • embedded: contractual clauses (or equivalent functional outcomes) are embedded as computer code in software • performance mediated by technological means: the release of payments and other actions are enabled by technology and rules based operations • irrevocable: once initiated, the outcomes for which a smart contract is encoded to perform cannot typically be stopped (unless an outcome depends on an unmet condition)
How does blockchain enable smart contracts? The key principle underpinning the smart contract is the ability for parties (sometimes disagreeing) to come to consensus over a set of shared facts. The blockchain accomplishes this by: (a) sharing identical copies of the ledger database amongst the community of participating nodes; and (b) using a consensus algorithm (sometimes called proof of work) to resolve differences in each block. With every computer coming to consensus (eventually) over the facts in the block, the inventor of Bitcoin, Satoshi Nakamoto, was able to make those very facts be programs, data, events and transactions. In short, the facts in a block are the state and code of smart contracts over which consensus happens every ten minutes
Uses of Smart Contracts: Copyright Industry
Reading Material - https://disruptionhub.com/smart-contract-uses/
https://bitcoinmagazine.com/articles/is-blockchain-powered-copyright-protection-possible-1470758430/
Further reading: https://www.livemint.com/Opinion/tC66BUm88uqVzpsfnK80HO/Can-blockchain-technology-be-an-answer-to-Indias-land-gover.html
Presumptive Ownership is what is contemplated under the Registration Act – simply because it is virtually impossible to confirm ownership in India due to lack of records etc
“In 2008, a short-lived National Land Records Management Programme was launched, which failed due to implementation hurdles.
The current government has recently renewed the push for making all land records and titling digital through the Digital India Land Records Modernization Programme (DILRMP). While a digital footprint is certainly an improvement over a physical ledger of records, certain vulnerabilities will persist such as conflicting claims on ownership; bribery and corruption in altering registered data; bureaucracies around third-party vetting; and cyber-attacks and data theft.”
“Implementation of blockchain technology will require legal and infrastructural support such as a firm Land Titling Act, a single department for land registration and records, higher rural literacy, third party information technology (IT)-enabled support and creation of a public key infrastructure trust (PKI) to take care of digital certificate management (as pointed out by Meghna Bal in an Observer Research Foundation report). There will still be challenges at the point of freezing a confirmed ownership title as it cannot be guaranteed that the title is dispute-free.”