The History of Blockchain - From Bitcoin to Shared Ledgers
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This document provides an overview of blockchain technology and its potential applications. In 3 sentences: Blockchain offers a new way to build trust and integrity into a financial system by creating a distributed, tamper-proof database where all participants validate transactions and reach consensus, thereby making the records immutable; while originally developed for cryptocurrencies like Bitcoin, the core concept of blockchain has broader applications and can be used to securely record and share all types of data between parties; major banks and organizations now see the potential for blockchain to transform industries by reducing costs, improving transparency, and enabling novel applications.
The History of Blockchain - From Bitcoin to Shared Ledgers
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- 2. 2008
- 3. 2008 BofA buys struggling CountrywideJan 11 Fed forces sale of Bear StearnsMar 16 Lehman Brothers files for bankruptcySep 15 Fed bails out AIG for $85BSep 16 Washington Mutual failsSep 25 Market crashes; system almost collapsesSep 29 Gov’t authorizes $700B for bank bailoutOct 3
- 4. A B We have been solving for the wrong problem instead of solving for trust C
- 5. BA C we should have been solving for integrity We have been solving for the wrong problem
- 6. BA maybe we don’t need trust We have been solving for the wrong problem
- 7. “The root problem with conventional currency is all the trust that’s required to make it work…the history of fiat currencies is full of breaches of that trust.” — Satoshi Nakamoto (creator of Bitcoin)
- 8. What if? New financial system built on integrity instead of trust…
- 9. What if? New type of database with built-in integrity
- 10. What if? Replicate it everywhere so everyone has a copy
- 11. What if? All participants validate every change to the database
- 12. What if? We created a tamper-proof audit log of all transactions. Transactions Transactions Transactions Transactions
- 13. January 3, 2009
- 14. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
- 15. A A A B B A A C B Let’s combine the best of peer-to-peer… Peer to Peer No fees Resilient No single point of failure Distributed power Freedom to innovate No large attack target
- 16. A A A C And the best of centralization… C A A A B B B Central Counterparty Increased reliability Reduced reconciliation Single connection Universal system of record Reduced complexity Transaction safety
- 17. A To create the best of both worlds… A A C C A A A B B B Central Counterparty A A B B A A C B Peer to Peer
- 18. A B B A C A A blockchain built on integrity Blockchain Solution C
- 19. A B Alice wants to send money to Bob. How does a blockchain work?
- 20. The transaction is posted to a block along with other transactions. A B C D E F G H M N I J O P K L Q R
- 21. The block is sent to all validators in the network A B C D E F G H M N I J O P K L Q R Node A Node B Node C Node D Node E
- 22. The network approves the valid transactions. A B N C D E F G H M I J O P K L Q R Node A Node B Node C Node D Node E
- 23. The block is added to the blockchain A B Block 432568 + 10 Transactions Block 432567 117 Transactions Block 432566
- 24. Block 432568 + 10 Transactions Block 432567 117 Transactions Block 432566 As the chain builds, the transaction becomes immutable.
- 25. Block 432568 + 10 Transactions Block 432567 117 Transactions Block 432566 Block 432569 112 Transactions As the chain builds, the transaction becomes immutable.
- 26. Block 432568 + 10 Transactions Block 432569 112 Transactions Block 432570 38 Transactions As the chain builds, the transaction becomes immutable.
- 27. Block 432568 Block 432569 112 Transactions Block 432570 38 Transactions Block 432571 96 Transactions As the chain builds, the transaction becomes immutable.
- 28. Blockchain is… ..a technical tour-de-force - Bill Gates …a once in a generation opportunity - PriceWaterhouseCoopers …the first native digital medium for value, just as the internet was the first native digital medium for information - Harvard Business Review
- 29. Annual Blockchain VC Funding (Millions) 2012 2013 2014 2015 2016 $2.13M $95.05M $362.53M $499.08M $718.00M
- 31. July 2014 Jan 2015 July 2015 Jan 2016
- 32. 66% of Banks will adopt Blockchain by 2020 2014 2017 2020 0.00% 15.00% 66.00% source: IBM Institute of Business Value survey
- 33. Blockchain is not FinTech It’s data management
- 34. A financial transaction is just a data type…
- 35. Bitcoin proved we can move data between two non-trusting, anonymous parties. A B
- 36. But what if we know the other party? Factory Truck
- 37. But what if we know the other party? Hospital Patient
- 38. But what if we know the other party? Client Bank
- 39. That changes how we secure this Client Bank
- 40. That changes how we identify these Client Bank
- 41. That changes what we put here… Client Bank?
- 42. and what we see here. Block 432568 Block 432569 112 Transactions Block 432570 38 Transactions Block 432571 96 Transactions G H M N I J O P K L Q R
- 43. A B B A C A So whether the ledger secures currency Blockchain Solution C $ $ $ $
- 44. A B B A C A So whether the ledger secures identities Blockchain Solution C
- 45. A B B A C A So whether the ledger secures information Blockchain Solution C
- 46. A … it’s just a ledger Blockchain Solution
- 47. A Blockchain Solution $ $ … and it’s all just data
- 48. A B B A C A C $ $ The power to unlock its potential rests with us… finally.
- 49. Let’s Talk hello@gem.co gem.co Please limit to internal use.