blockchain technology- decentralized disruption

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Blockchain Technology – Decentralized Disruption



Famous Quote

The blockchain is one of the most important innovations in the history of finance. Removing the middleman will transform how we transact, finance projects and distribute capital.

‘ ’ Brian Kelly

Investor and Author of The Bitcoin Big Bang



2100 years

65 years

42 years

Traditional Financial Services Systems

Centralized and slow process

Intermediaries creating insecure practices

Processing and

transaction delays

High processing

costsMinimal transparency



Why Blockchain ?

Blockchain technology enables

bilateral settlement by

eliminating midpoint failures,

delays, collateral costs, and

minimizes credit risks and

exchange spreads.

No central authority

Real-time settlement

Elimination of intermediaries

Drastic reduction in operational

costsHigh levels of Transparency

BLOCKCHAIN



Blockchain is a transaction database shared by all nodes participating in a

system. In essence, it is a distributed method of tracking and transferring

assets online without need for a trusted party.

What is Blockchain?



Imagine there are a group of

lockers in a public place.

Each locker is:

• Free of charge

• Use of “wallets” to keep

track of all owned lockers

• Money is inaccessible if

key is lost

• Has a window

Windows to see

Slot to put money

Identifying number

Requires a key

Blockchain Analogy



Presume Alice and Bob get into a contract...

• No banks or third party

involvement

• No processing delays

• No additional fees

• The transaction cannot be

reverted

• Only Alice can take ownership

of transferred amount

• The transaction is transparent

Other Locker

Holders

#548 #274

BobAlice

Decentralized Money Analogy



• The bitcoin network and blockchain system works very similar to the decentralized money management approach

• The bitcoin network consists of thousands of computers (nodes), each of which maintains its own ledger. These computers communicate

with each other by sending messages over the Internet.

• For example, if A was transferring 10 bitcoins to B, A would click initiate the transaction on the bitcoin wallet, and it would broadcast this

transaction to all other bitcoin users.

The Concept of Blockchain



• Anyone can join the bitcoin network by

installing the bitcoin software.

• The software automatically downloads

the global ledger – Blockchain, onto the

computer.

• This distributed ledger allows bitcoin

users to see every transaction that has

ever happened in bitcoin’s history! Users

can even browse through them online on

sites.

Distributed Ledger

Distributed Ledger



How a bitcoin transaction takes place

X holds 1 BTC in virtual wallet with associated public and private key

Y sends his bitcoin wallet address and public key to X

X wants to send BTC to Y who also has a wallet

X creates transaction message with Y’s address and transaction amount

X signs transaction with his private key and announces his public key for signature

verification

X broadcasts the transaction on bitcoin network for all to see



Fully Distributed System

No centralized authority.

Transparency All transactions are publically recorded and available for scrutiny.

Security The ledger is distributed across thousands of computers, meaning a practical hack is near-impossible.

Risk No single authority has control, which means if there is a fault, the rest of the network continues.

Privacy The user, or bitcoin owner, is anonymous and doesn’t need to provide ID credentials.

Dependency Use of the blockchain eliminates dependency on the base layer service for functionality.

High Network Effects

There can be substantial benefits from very large groups of people (or even everyone) using the same service.

Benefits of Blockchain



Currency & Exchange

Remittance

P2P Transfers

Data Usage

Gaming

Trading Platforms

Applications Companies Engaged

Blockchain Technology - Financial Use Cases



Digital Identity

Smart Contracts

Network Infrastructure

and API

Blockchain in IoT

Digital Content/Documents, Storage &

Delivery


Chimera IoT

Mastercoin

Blockchain Technology - Non-Financial Use Cases



Reviews and Endorsements

Gold & Silver

Authentication and

Authorisation

Real Estate

Diamond


Blockchain Technology Non-Financial Use Cases …cont.



Banking giants around the world like Goldman Sachs, Barclays, UBS and others are embracing

bitcoin and Blockchain technology.

Having recognized the potential and advantages of the lightning-fast, decentralized transaction

verification system as having broad applications for transactions involving everything from stock

trades to money and property transfers, banks have been warming to Blockchain technology,

using it to innovate traditional banking processes.

Banks and Blockchain Technology



Blockchain is a really disruptive development,

and banks have a lot of fear concerning this

technology because in the pure theory of

blockchain, a lot of processes within a traditional

bank would be obsolete.

‘ ’

– Thomas F Dapp, Research Analyst, Deutsche

Bank

blockchain technology- decentralized disruption

Economy & Finance