12. Consensus Protocol establishes ACCURACY
1. A new transaction is created on one node
2. The transaction is broadcast to all nodes
3. Each node starts collecting transactions into a
block (checks validity)
4. A random node completes a block
- and broadcasts it to other nodes
5. Other nodes accept the block (check validity)
and add it to their blockchain
13. IMMUTABILITY achieved through Blockchain
data
H( )
⢠A hash-pointer is a cryptographic reference to
a piece of data
⢠SHA-256 is a standard compression algorithm
⢠The hash is uniquely associated with the
underlying data
data
Prev H( )
data
Prev H( )
data
Prev H( )
H( )
⢠In a Blockchain each new block contains
the hash function of the previous block.
⢠To verify the whole chain â and every
transaction in it â you only need to be
able to confirm the most recent hash
data
Prev H( )
data
Prev H( )
data
Prev H( )
H( )
⢠If the data is corrupted (accidentally or
deliberately) then the next hash and all
subsequent blocks fail
⢠This creates a tamper-evident ledger
20. settlements
Smart Contracts
Bill Buyer Sally Seller
⢠Makes payment of $100
⢠Publishes a reversing transaction at
time T+1 unless any two parties
agree to cancel it.
⢠Sally has the money and ships
goods
⢠âSignsâ the reversing transaction
⢠Bob receives goods
⢠âSignsâ reversing transaction which
is now cancelled.
Bob has the goods Sally has the money
21. settlements
Smart Contracts
Bill Buyer Sally Seller
⢠Makes payment of $100
⢠Publishes a reversing transaction at
time T+1 unless any two parties
agree to cancel it.
⢠Sally has the money but decides
not to ship the goods.
⢠âSignsâ the reversing transaction
⢠Bob does not receive the goods by T+1,
does not sign reversing transaction
⢠Reversing transaction triggers which
returns money to Bob
Bob has his money back
Sally still has her
goods but no money
22. settlements
Smart Contracts
Bill Buyer Sally Seller Jenny Judge
⢠Bob receives goods but they are
damaged
⢠Does not sign the reversing
transaction
Bob has the goods Sally still has the money
⢠Before T+1, Sally initiates
adjudication
⢠Jenny evaluates condition of
the goods
⢠Decides that Sally is right.
⢠Signs the reversing transaction,
which is now cancelled.
32. 1. Understand the Blockchain!
⢠Blockchain Bootcamp
2. Plan for the Moonshot.
⢠What is the radical disruption
that COULD happen?
3. Start Now.
⢠Practical Use Cases
⢠Incremental Learning &
Experience.
⢠Start small BUT start.
How Can YOUR Business Prepare?