2. What is
⢠Briefly: Bitcon is a distribution database of records OR public ledger
⢠Each transactions in the ledger is verified by consensus of majority of
participants in the system DISTRIBUTED CONCENSUS
⢠Once entered, the entry in the ledger can never be erased
3. An Example:
⢠It is a crypto currency, the ownership of this currency and
transactions are governed by block chain
⢠Each transaction is protected through a digital signature
⢠Each transaction is broadcast to every node in the Bitcoin network
and is then recorded in a public ledger after verification
⢠Verifying node needs to ensure two things before recording any
transaction:
⢠Spender owns the cryptocurrencyâdigital signature verification on the
transaction.
⢠Spender has sufficient cryptocurrency in his/her account: c
4. History of BitCoin
⢠In year 2008, anonymous author with the name of Satoshi Nakamoto
published a paper entitled âBitcoin: A Peer-To-Peer Electronic Cash Systemâ
⢠2008
⢠August 18 Domain name "bitcoin.org" registered
⢠October 31 Bitcoin design paper published
⢠November 09 âBitcoin project registered at SourceForge.net
⢠2009
⢠January 3 Genesis block established at 18:15:05 GMT
⢠January 9 Bitcoin v0.1 released and announced on the cryptography mailing list
⢠January 12 First Bitcoin transaction, in block 170 from Satoshi to Hal Finney
6. The Transaction
⢠Each owner transfer the coin to
next by signing the previous
transactions
⢠The payee can verify the chain
of ownership
⢠How do stop double spending ?
⢠The owner can send two
transaction to two different
receiver
⢠Who would be new owner
7. A distributed time server
⢠The double spending can be stopped, if there a time stamp
⢠The new owner is one who received the money first
⢠Can be easily implemented if there is a universal time stamp server
⢠Which is not possible !! We need a distributed time server
8. Chaining the blocks
⢠To implement distributed time server, agree on a certain task, completing
the task is âProof of Workâ
⢠A task can be to find a random number, when added gives a specific Hash
value
⢠Nodes that preform the work are called âminersâ
⢠Miners gets rewarded for the task completed
9. Adding it together
⢠New transactions are broadcast to all nodes.
⢠Each node collects new transactions into a block.
⢠Each node works on finding a difficult proof-of-work for its block.
⢠When a node finds a proof-of-work, it broadcasts the block to all
nodes.
⢠Nodes accept the block only if all transactions in it are valid and not
already spent.
⢠Nodes express their acceptance of the block by working on creating
the next block in the chain, using the hash of the accepted block as
the previous hash.
10. Summary
⢠Distributed: No centralized controller, completely peer to peer and
distributed record
⢠The ledger is broadcasted to all, can be verified using public key
cryptography
⢠Immutable record: Once a block is added, it can not be changed, if
changed, need to re-do the entire block, to satisfy the âProof of workâ
11. Application of blockchain
⢠Crypto currency
⢠Smart contracts
⢠Decentralized Notary
⢠Digital assets
⢠Supply Chain
⢠Digital Rights management
⢠Stock trading
⢠Identity management
⢠Document storage
12. What is IOT ?
⢠Connecting âThingsâ that can operate independently
⢠Things (sensors) are connected to other things
(actuators)
⢠Has computing power to perform certain coordinated
tasks
⢠Creates a smart world: smart homes, smart street,
smart city
13. What is happening today
⢠IOT in mainstream consumer applications
⢠Smart homes, google home, amazon eco, smart watches etc.
⢠IOT in mainstream Industrial applications
⢠Solar power production monitoring
⢠Industrial safety monitoring systems
⢠IOT in mainstream personal/medical applications
⢠Fitbits, diabetic monitoring, BP/heart rate monitoring
⢠IOT in mainstream community applications
⢠Pollution monitoring, environment/locality monitoring
14. IOT and Block Chain
⢠IOT is distributed system, but
⢠Today most of these works with support from centralized infrastructure
⢠The sensors & actuators can talk to each other, but can not execute
coordinated tasks, without trust
⢠A de-centralized system like Block Chain can help
⢠A smart contracts can be established and executed across peer group
of devices, with trust !
⢠Can form a low cost and low maintenance trusted eco system
16. Just in Time manufacturing
⢠Just in time manufacturing
⢠All manufacturing done using 3D printer
⢠No inventory!!
⢠Consider: You see a car and want to purchase
⢠Take photo and upload to just time manufacturing portal
17. Just in Time manufacturing
⢠The request received at fullfillment center, job created
⢠Automated 3D modelling and design by designing software
⢠The job transferred to 3D printer and laser cutting machine
⢠Required tasks performed
⢠The job and material transferred to other unit/organization using an
drone OR driverless vehicle
⢠The more designs and tasks performed in other unit, and transferred
again
⢠Final product shipped back to user, in a drone/diverless vehicle
18. How does this work
Smart
ContractsOrder Placed
Smart
Contracts
Smart
Contracts
Smart
Contracts
USER Move job to
Other unit
Design Center Final
Shipment
19. How ?
⢠Require distributed trust system
⢠Each unit (a group of devices) must operate autonomously
⢠Each unit must perform the task, complete the contracts
⢠Must link the whole system via a common goal (for eg. Manufacturing
a car)
20. Smart Contracts
⢠Smart contracts are computer protocols that facilitate, verify, or
enforce the negotiation or performance of a contract, or that make a
contractual clause unnecessary.
22. A Distributed Security System
⢠To onboard devices in a secure way
⢠Centralized system do now work well.. IOT is distributed !!
⢠A secure system to exchange peer-to-peer data
⢠A secure system to accept and act on commands
23. Block chain for security
⢠Identify management Block chain based PKI
⢠Eliminates need for centralized system for key management
⢠Integrity management
⢠A keyless signature structure using block chain
⢠Reduce attacks, using block chain based network services
25. Challenges
⢠New technology
⢠While well adopted, still not many understand the core technical details
⢠Not well exposed in other areas, barring crypto currency
⢠Processing power
⢠Require quite a bit of processing power
⢠Can IOT devices afford ? Can Audino run this ?
⢠But remember moorse law, computing power will increase and cost gets
lower
26. Challenges
⢠Storage
⢠Seeks significant storage
⢠Can IOT devices support this ?
⢠There may be miners like devices for IOT, how do we incentivize them ?
⢠Scalability
⢠IOT is all about scale, million, billions of devices (50billion by 2020 ?)
⢠Can the algorithm scale well at these numbers
⢠Currently there is around 16M bitcoins and will max out at 21M