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Knowledge provider for blockchain and smart contract technology
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OUR TEAM
André Wolke Meher Roy Sebastian Bürgel
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Train a generation of developers to leverage blockchain technology in
order to improve how we handle
financial assets, build organizations and structure
societies.
OUR MISSION
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The blockchain will be to banking, law and
accountancy what the Internet was to media,
commerce and advertising.
Joichi Ito, Director of the MIT Media Lab
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YOUR INDUSTRYSchedule a free 1 hour technology
evaluation session with us. We understand your industry
and business need and tailor a blockchain-driven course for you.
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Decentralized Autonomous Organizations
Sebastian Bürgel
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From To Amount1 2 153 1 102 3 203 2 2002 1 101 3 502 4 20
LET‘S BUILD A BLOCKCHAIN
Use-case: logging of financial transactions
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From To Amount1 2 153 1 102 3 203 2 2002 1 101 3 502 4 20
PROBLEM: MUTABILITYNo inherent security against:
Hacked databaseRogue admin
5000
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From To Amount1 2 153 1 102 3 203 2 2002 1 101 3 502 4 20
From To Amount1 2 153 1 102 3 203 2 2002 1 101 3 502 4 20
BATCH TRANSACTIONS IN BLOCKS
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From To Amount3 2 2002 1 10
BATCH TRANSACTIONS IN BLOCKSFrom To Amount
1 2 153 1 102 3 20
From To Amount1 3 502 4 20
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CHAIN THE BLOCKSBlock Number - 1
From To Amount1 2 153 1 102 3 20
Digital root of block:1 + 2 + 1 + 5 +3 + 1 + 1 + 0 +2 + 3 + 2 + 0= 212 + 1= 3
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Block number – 2 / digital root of previous block - 3From To Amount
3 2 2002 1 10
CHAIN THE BLOCKSBlock Number - 1
From To Amount1 2 153 1 102 3 20
Digital root of block:3 + 3 + 2 + 2 + 0 + 0 +2 + 1 + 1 + 0 = 141 + 4= 5
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Block number – 2 / digital root of previous block - 3From To Amount
3 2 2002 1 10
CHAIN THE BLOCKSBlock Number - 1
From To Amount1 2 153 1 102 3 20
Block number – 3 / digital root of previous block - 5From To Amount
1 3 502 4 20
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Block number – 2 / digital root of previous block - 3 ( actually 7! )From To Amount
3 2 2002 1 10
LET’S CHEAT AGAINBlock Number - 1
From To Amount1 2 153 1 102 3 20
Block number – 3 / digital root of previous block - 5 ( actually 9! )From To Amount
1 3 502 4 20
5000
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INHERENT VALIDITY
Changes in a block invalidate all following blocks.
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LedgerJon → Alice Bill → JonAlice → Bob
20
3010
LedgerJon → Alice Bill → JonAlice → Bob
20
3010
LedgerJon → Alice Bill → JonAlice → Bob
20
3010
LedgerJon → Alice Bill → JonAlice → Bob
20
3010
LedgerJon → Alice Bill → JonAlice → Bob
20
3010
LedgerJon → Alice Bill → JonAlice → Bob
20
3010
10 ETH to Bob
BLOCKCHAIN + P2P NETWORK
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}{
IMMUTABILITY
Nobody else will accept a transaction which is based on a
modified version of the blockchain.
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“It is very possible that... one machine would suffice to solve all the problems... of the whole [world]”
- Sir Charles Galton Darwin 1946 -
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BLOCKCHAIN PLUS SMART CONTRACTS
Ethereum blockchain with smart contractsBitcoin blockchain
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Block number – 2 / previous block hash - 3eb571a…From To Amount
3 2 2002 1 10
ADDING CONTRACT TO OUR BLOCKCHAIN
Block Number - 1From To Amount
1 2 153 1 102 3 20
Block number – 3 / previous block hash - a97b130…From To Amount
1 3 502 4 20
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Block number – 2 / previous block hash - 61b49d1……From To Amount Payload
3 2 200 “Hello World!”2 1 10
ADDING CONTRACT TO OUR BLOCKCHAIN
Block Number - 1From To Amount Payload
1 2 15 b1a12b4564…3 1 102 3 20
Block number – 3 / previous block hash - 97bc510…From To Amount Payload
1 3 502 4 20 054e120380…
Contract deployment
Send data to contract
id 2 is a contract
Contract sends money to its creator!
Contract deploys another contract!
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SMART CONTRACT
PROGRAM ON A BLOCKCHAIN,
WHICH CAN CONTROL FINANCIAL
ASSETS
=
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A NEW DIMENSION FOR PAYMENTS
Since ~ 10.000 years
Transaction of financial assets from and to:
- People- Organizations
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Since 07/30/2015 3:26 UTC (Ethereum genesis block):
Transaction of financial assets from and to:
- People- Organizations- Programs
A NEW DIMENSION FOR PAYMENTS
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SMART CONTRACT – Example (Timelock)
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SMART CONTRACT – Example (Timelock)
https://github.com/SCBuergel/timeLock-smartContract
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SMART CONTRACT – Example (Timelock)
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SMART CONTRACT – Example (Timelock)
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contract DAO_Creator { function createDAO( address _curator, uint _proposalDeposit, uint _minTokensToCreate, uint _closingTime, string _tokenName, string _tokenSymbol, uint8 _decimalPlaces ) returns (DAO _newDAO) {
Decentralized Autonomous Organizations
Smart contracts can be arbitrarily complex…Like by-laws in corporations or investment funds.
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Living on the Ethereum blockchain
Aimed at investing in sharing economy / IoT
Controlled by investors (“DAO token holders”)
Currently in possession of over $150 M (in Ether)
THE DAO (Experiment!)
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Funding period: give Ether, get DAO tokens
Submission of funding proposals: have to be whitelisted by curators
Voting period: votes according to investment
Receiving Ether: ROI
Splitting: spawning of child-DAO
CORE PROCESSES IN THE DAO
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A range of security / market mechanism endanger assets in the current version of The DAO
E.g., the “Stalker attack”:User A does not trust The DAO and initiates a “split”User B has a lot of tokens and follows AA cannot get their funds out since B can veto everythingB extorts funds from A: “give me 90% and I leave you alone”
CURRENT ISSUES OF THE DAO
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Liability?
Link to the real world?
Incentive for paying back anything to DAO?
How can it protect physical assets (e.g. copyright)?
THE DAO: High Level Open Questions
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THANK YOU!http://[email protected]@validitylabs