Introduction to Blockchain Technology

Blockchain
• Blockchain is a specific type of database.
• It differs from a typical database in the way it stores information;
blockchains store data in blocks that are then chained together.
• As new data comes in it is entered into a fresh block. Once the block
is filled with data it is chained onto the previous block, which makes
the data chained together in chronological order.

blockchain
• Different types of information can be stored on a blockchain but the
most common use so far has been as a ledger for transactions.
• In Bitcoin’s case, blockchain is used in a decentralized way so that no
single person or group has control—rather, all users collectively retain
control.
• Decentralized blockchains are immutable, which means that the data
entered is irreversible. For Bitcoin, this means that transactions are
permanently recorded and viewable to anyone.

Blockchain
• A Blockchain (or block chain) is a method of storing a list of entries, which cannot
be changed easily after they are created. This also applies to the list. This is done
by using several concepts from cryptography, including digital
signatures and hash functions.
• A blockchain is a decentralized, distributed, and oftentimes public, digital ledger
consisting of records called blocks that is used to record transactions across many
computers so that any involved block cannot be altered retroactively, without the
alteration of all subsequent blocks

Blockchain
• A Blockchain is a chain of blocks which contain information. The data which is stored inside a
block depends on the type of blockchain. For Example, A Bitcoin Block contains information
about the Sender, Receiver, number of bitcoins to be transferred. The first block in the chain is
called the Genesis block
• The goal of blockchain is to allow digital information to be recorded and distributed, but not
edited. Blockchain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta,
two researchers who wanted to implement a system where document timestamps could not be
tampered with
• Blockchain has the potential to grow to be a bedrock of the worldwide record-keeping systems,
but was launched just 10 years ago. It was created by the unknown persons behind the online
cash currency bitcoin, under the pseudonym of Satoshi Nakamoto.

blockchain
• A blockchain is a digital record of transactions. The name comes from
its structure, in which individual records, called blocks, are linked
together in single list, called a chain. ... Each transaction added to
a blockchain is validated by multiple computers on the Internet.

• For the purpose of understanding blockchain, it is instructive to view it in
the context of how it has been implemented by Bitcoin.
• Like a database, Bitcoin needs a collection of computers to store its
blockchain.
• For Bitcoin, this blockchain is just a specific type of database that stores
every Bitcoin transaction ever made.
• In Bitcoin’s case, and unlike most databases, these computers are not all
under one roof, and each computer or group of computers is operated
by a unique individual or group of individuals.
Decentralization

• In this model, Bitcoin’s blockchain is used in a decentralized way.
However, private, centralized blockchains, where the computers that
make up its network are owned and operated by a single entity, do exist.

Introduction to Blockchain
• This technology provides
potential to upend the way every
industry manages its information
and data and financial services.
• Examples are Legal, Supply Chain,
Government, Energy, Food,
Retail, Healthcare, Insurance,
Travel and Hospitality &
Education sectors.

Why use Blockchain
• Blockchain technology offers new
tools for authentication and
authorization in the digital world
that preclude the need for many
centralized administrators. As a
result, it enables the creation of
new digital relationships.

Why use Blockchain
Blockchain revolution is posed to create the backbone of a layer of the
internet for transactions and interactions of value are often called the
'Internet of Value’.

Blockchain in Legal
“Smart contracts” stored on the
blockchain track contract parties,
terms, transfer of ownership, and
delivery of goods/ services without
legal intervention.

By utilizing a distributed ledger, companies within a supply chain gain
transparency into shipment tracking, deliveries, and progress among
other suppliers where no inherent trust exists.
Blockchain in Supply Chain

Blockchain offers promise as a technology to
store personal identity information, criminal
backgrounds, and “e-citizenship,” authorized
by biometrics.
Blockchain in Government

Decentralized energy transfer
and distribution are possible
via micro-transactions of data
sent to blockchain, validated,
and re-dispersed to the grid
while securing payment to the
submitter.
Blockchain in Energy

Blockchain in Food
Using blockchain to store food supply chain data offers
enhanced traceability of product origin, batching,
processing, expiration, storage temperatures, and shipping.

Blockchain in Retail
Secure P2P marketplaces can track P2P retail transactions, with
product information, shipment, and bills of lading input on the
blockchain, and paying via Bitcoin.

Electronic medical records stored in a blockchain, accessed and
updated via biometrics, allow for the democratization of patient data
and alleviate the burden of transferring records among providers.
Blockchain in Healthcare

Blockchain in Insurance
When autonomous vehicles and other smart devices communicate
status updates with insurance providers via the blockchain, premium
costs decrease as the need for auditing and authenticating data
vanishes.

Passengers store their authenticated “single travel ID” on the
blockchain for use in lieu of travel documents, identification cards,
loyalty program IDs, and payment data.
Blockchain in Travel & Hospitality

Educational institutions could
utilize the blockchain to store
credentialing data around
assessments, degrees, and
transcripts eliminating chance
of lost of results slips.
Blockchain in Education

How blockchain can transform the FMCG supply chain
• Elimination of food fraud estimated to cost $30 - $40 billion a year
globally
• Pinpointing of tainted products
• Provision of transparency of transportation and storage process

Micro-level goods tracking and efficiency
• Blockchain dramatically enhances transparency, enabling all parties
to trace a product’s journey along the supply chain.
• Tracking the provenance and supply chain journey of individual
packages of produce, enables pinpoint and prevention of outbreaks
and illness.

Streamlining the supply chain with smart contracts
These contracts are
incredibly difficult to
tamper with thanks to the
cryptography-based
transactions of
blockchain.

Streamlining the supply chain with smart contracts
Executed according to pre-
determined triggering events, such
as transferring funds the moment a
shipment arrives at the store.

Implementing blockchain
• Developers are experimenting with retail processes and
applications on a flexible, scalable and trusted cloud platform.
• Revolutionizing retail supply chain efficiency with rapid, low-cost,
low-risk, and fast-fail platforms that enable developers to
experiment with a growing number of distributed ledger
technologies.

What is Block Chain in FMCG?
The sudden rise of Bitcoin has
created new interest in the
blockchain technology behind the e-
currency.

Blockchain is a decentralized ledger that tracks transactions in a secure
way using cryptography to make modifications almost impossible.

The popularity of Bitcoin has been fueling a speculative bubble in the
stock market as investors keep throwing money at any and all companies
using blockchain in the hopes of finding the new Bitcoin unicorn

Blockchain changing the Consumer Goods
Industry
It is seen as a possible way of reinforcing trust and security and
accelerating business processes, removing the human element. Many
governments, tech giants and businesses are starting to experiment with
this technology.

Industry
There are arguments that it could help tackle food fraud, boost trust in
business transactions and accelerate operational processes.

Industry
Address efficiency, sustainability and general supply chain issues.

Industry
The added immutability of a distributed ledger means that inter-enterprise processes
become easier to trust in case of dispute, allowing FMCG giants to enhance
management of suppliers and ensuring conformity to operational and regulatory
standards.

Blockchain and Retail: Four Opportunities
1. Consumer payments
High transaction costs constrain a market. The potential for a lot of
demand for crypto-currencies from a consumer perspective.

1. Consumer payments
One startup in
Singapore, TenX, is
connecting its digital
currency wallet to a Visa
wallet, making it possible
for consumers to use a
Visa card to spend
crypto-currencies.

2. Product Pedigree
Blockchain makes it
possible for every
legitimate touch in a
supply chain – from a
supplier to a manufacturer
to a shipper – to add a
verifiable record to an
item’s pedigree.

2. Product Pedigree
This has applications like making it harder to pass off that Hermes or
Louis Vuitton bag as “genuine” when it’s not.

3. B2B payments
One of the biggest
challenges for crypto-
currencies is acceptance as
a real currency. Banks
would have to be willing to
hold crypto-currencies as
deposits, and participate in
exchanging crypto-
currencies for cold, hard
cash.

3. B2B payments
Blockchain is being proposed more in terms of “smart contracts”,
basically private blockchains that update automatically over time,
recording all of the actions taken in regards to the contract

3. B2B payments
Less paperwork, more digital
exchanges of information, and
smoother transactions across
borders and across multiple
parties

4. Digital Advertising
Solve some of digital
advertising’s problems.
Blockchain as it exists is
very secure, but it’s not
very fast.

It’s definitely not fast
enough for the real-time
market bids that happen.

Is compelling enough to
have big potential
impact on the retail
industry.

Blockchain in the consumer goods
industry
The fast moving
consumer goods (FMCG)
industry is another of an
increasing number of
sectors that are looking
to utilize emerging and
advanced technologies.

Disadvantages of blockchain in FMCG
Manufacturers depend
on traditional retailers
now more than ever, as
it is through their stores
that the FMCG giants
can show off their new
products

Blockchain enhancing the supply chain
Enables businesses and
consumers to constantly
be aware of and monitor
where an item is in the
Supply Chain.

Businesses, big and
small, and individuals
are getting involved with
initiatives such as Coca
Cola’s recent World
Without Waste
campaign.

Supply Chain industry can utilize blockchain to benefit sustainability,
by reducing counterfeit trade and increasing consumers awareness
of where exactly products are coming from – from food and coffee
to luxury items like diamonds, it will mean good things for both.

Being used to digitally track
products on the move, for
quicker more transparent
tracking that is accessed and
updated continuously.

Once this technology is widely used it will improve traceability and
efficiency and reduce administrative costs - particularly in larger Supply
Chain networks.

Brands and Blockchain
Walmart - Applying blockchain to a package of mangoes,
Walmart traced the fruit to its original source in two seconds,
something that could otherwise take weeks.

DeBeers – DeBeers uses blockchain to track gems
from the moment they’re excavated. The technology
can verify a diamond’s purity in a secure way, while
also ensuring it didn’t originate in conflict zones.

Amazon – The ecommerce juggernaut proves it also believes in blockchain’s
potential in marketing, supporting the integration of blockchain solutions
with systems built on AWS (Amazon Web Service).

Transforming the Relationship between
Brands and Customers
Consumers can trust the fact that their information is secure
and they have complete control and anonymity. Brands can
trust that the information is correct and unable to be falsified.

Relevant sections of personal data held in the blockchain can be shared
with the right brands. The brands you trust would be held on the
blockchain.

This could see major household purchases being shared with your trusted
brands that can let you know about associated services and goods that are right
for you, from insurance to cleaning tablets, while you – the consumer – remain
anonymous and in control.

In the FMCG world, the blockchain might see consumers buy their
household products direct from P&G or Unilever rather than through a
supermarket.

As ecommerce, powered by
optimization algorithms,
becomes the norm,
consumers may question
the value that retail
intermediaries provide over
and above the products
themselves.

Blockchain & IOT
• Continuity of information: Through the immutable and irrevocable
properties of blockchain, sharing information effectively between the
different stakeholders involved in the global supply chain will be key to
ensure traceability and reduce inherent risks.

Blockchain & IOT
Accessibility to information: Fast and transparent blockchains will provide
the necessary access to information in the future to effectively leverage
on the massive amount of data produced along the supply chain.

Blockchain & IOT
Link between physical and information flows: Thanks to IoT, the data will
be linked to the materials and products on the stages of the supply chain
where matter is transformed physically.

Blockchain & IOT
Code of conduct violations and fraud detection: The need to ensure
human rights and codes of conduct are respected along the chain is
necessary to lower reputation risk.

Blockchain & IOT
Effective fraud detection processes supported by appropriate
technologies will be increasingly important to lower business risk. This
will be enabled by the transparent and auditable features of blockchain.

Building Trust in IOT
As things increase their connectivity and intelligence, so will our demand
for them to autonomously form networks, exchange information, and
coordinate action on our behalves.

Building Trust in IOT
Online purchases, for
example, we indirectly
call on a web
management system for
product placement and
pricing, a retailer, and a
last-mile delivery driver.

Technology Requirements
Requirement 1: Identity and reputation of participants is central to trust
and must be exposed.

For IoT applications, most
information generated at the edge is
strongly qualitative; and once
information becomes qualitative, its
provenance – including the identity
and reputation of the source – is
critical.

Requirement 2: Controlled access to information is critical.

Businesses don't like to share confidential data with competitors. Smart
contracts will be powerful tools in IoT, particularly in supply chains that
include third party logistics companies.

The ability to prove that the temperature of the container remained
within contract parameters should allow immediate trigger of payment
resolving finger pointing. And this proof must be constructed without
revealing additional confidential information.

Requirement 3: Efficiency matters.

Another core principle of
blockchain is redundant
compute and storage: every
participant processes all
transactions and maintains
the ledger, creating an ever-
growing demand for storage
across the network.

• In IoT, where lightweight nodes at the edge frequently have extremely
limited storage and compute power, IoT blockchains will likely need to
recognize the variety of nodes in the network and their relative
capabilities.

Requirement 4: Connectivity is intermittent; action must be taken when
disconnected.

There are many, many edge nodes which by design receive or send data
only intermittently and in small quantities that drive autonomous
interaction to the edge also require blockchains to accommodate
connectivity constraints.

Requirement 5: Actions must be reversible.

Represents a fundamental shift in one of the central tenets of the
technology.

Specifically, blockchain technology is founded on the principle of
immutability; once something is committed to the log it never changes.

A more troublesome example might occur when automatic payments
are triggered when a shipping container arrives at a facility. A faulty RFID
reader could report the existence of a container that has not actually
arrived triggering an inappropriate transfer of funds.

Personal information might
leak into a transaction; the
effect of GDPR and other
privacy regulations may
require that information be
removed from the record.
This problem is not unique to
IoT applications though we
expect it to be more
common in them.

Economic Requirements
With 3D-printing enabling distributed manufacturing, and barriers to
entry around machine learning, enterprises may be forced to adopt
more open systems.

Economic Requirements
The IoT industry is inevitably expanding into more complex ecosystems,
expecting compelling use cases for blockchain will become more
apparent.

Using Blockchain ToSecure IoT
The world is full of connected devices online all the time, each of those
devices–whether a voice-recognition personal assistant or a pay-by-
phone parking meter or a temperature sensor deep in an industrial
robot–will be vulnerable to a cyberattack and could even be part of one.

Today, many “smart” internet-connected devices are made by large
companies with well-known brand names, like Google, Apple, Microsoft
and Samsung, which have both the technological systems and the
marketing incentive to fix any security problems quickly..

Using Blockchain T
oSecure IoT
But that’s not the case in the increasingly crowded world of smaller
internet-enabled devices, like light bulbs, doorbells and even packages
shipped by UPS.

Using Blockchain T
oSecure IoT
Those devices–and their digital “brains”–are typically made by unknown
companies, many in developing countries, without the funds or ability–
or the brand-recognition need–to incorporate strong security features.

Insecure “internet of things” devices have already contributed to major
cyber-disasters, such as the October 2016 cyberattack on internet
routing company Dyn that took down more than 80 popular websites
and stalled internet traffic across the U.S.

Using Blockchain T
oSecure IoT
The solution to this problem could be a new way of tracking and
distributing security software updates using blockchains.

The 5 Big Problems With Blockchain
1. Blockchain has an environmental cost

The 5 Big Problems With Blockchain:
Bitcoin – last year it was claimed that the computing power required to
keep the network running consumes as much energy as was used by 159
of the world’s nations.

The 5 Big Problems With Blockchain
Smaller scale blockchains – such as those that an organization may
deploy internally to securely monitor and record business activity –
would consume a fraction of that.

It is an important consideration and the environmental implications as
well as the energy costs can’t be ignored.

2. Lack of regulation creates a risky environment

Scams and market
manipulation are
commonplace. Among the
high profile cases is
Onecoin – recently
revealed as a ponzi
scheme which is believed
to have robbed millions
from investors who
believed they were getting
in early on what would
become the “next Bitcoin”.

Legislators have largely failed to keep pace with innovators (or
scammers), leading to rich pickings for those seeking to exploit “FOMO”
– the “fear of missing out”.

3. Its complexity means end users find it hard to appreciate the benefits

It takes a while, and a good bit of reading, before the “man on the
street” can see what makes blockchains potentially so useful.

Middle-man facilities traditionally
provided by the financial services
industry – such as clearing payments
and fraud prevention are provided by
banks adequately well, at an
apparently low cost to the end user.

4. Blockchains can be slow and cumbersome

Due to their complexity and their encrypted, distributed nature,
blockchain transactions can take a while to process, certainly compared
to “traditional” payment systems such as cash or debit cards.

Bitcoin transactions can take
several hours to finalize,
which means there are
inherent problems in the
idea that you will be able to
use them to pay for a cup of
coffee in your lunch hour,
unless the vendor is willing to
take on an element of risk.

5. The “Establishment” has a vested interest in blockchain failing

Despite the huge interest in
adopting blockchain technology
from the established financial
industry, the subtext behind
much of what is said about it is
“it would probably be better if it
just quietly disappeared.”

Banks make huge amounts of profit from playing the middle-man role,
and because the cost is distributed among their millions of customers,
end users usually pay very little individually.

Introduction to Blockchain Technology

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