Blockchain: hype or real? Ali Al Shidhani @alialshidhani Ali.alshidhani@gmail.com
Note: • This is not a business or investment advice • Please do your own research before investing in blockchain, bitcoin or any cryptocurrency
6 D’s of disruptive innovations
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HSBC Global survey in 2017 found that 80% of those who have heard of blockchain don’t understand it!!
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What is Blockchain • Distributed ledger system composed of cryptographically linked blocks • Each block contains batches of transactions • Each transaction represents the movement of asset (currency, real estate, intellectual property, jewelry, cars, art, music, vote, etc…)
• Internet of value/assets 4
What is Blockchain • A database replicated over a peer-to-peer network • Enables multiple parties to share and modify information in a secure fashion
even if they don’t trust each other • There is a need for a consensus mechanism to ensure that each participant’s
view of the ledger matches the view of other participants • Blockchain can facilitate the transfer of assets without needing a trusted
central authority 5
Blockchain Benefits • Eliminates the need for trust between stakeholders • Builds a secure/immutable value transfer system • Increases record transparency
• Decreases transaction cost • Increases transaction speed
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Types of Blockchain • Permission-less • Open blockchain where anyone can participate in reading or writing to the blockchain
• Permissioned • Closed blockchain where selected parties can read or write to the blockchain
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Bitcoin
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Software Engineering
Bitcoin
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Blockchain features • Decentralized, lack of a central authority • Low transaction cost • Fast
• Transparent • Anonymity
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Price
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Bitcoin Limitations • Performance: slow number of transactions per second. Max 7 in Bitcoin, 10Ks in VISA. Not suitable for real-time applications, 10-min confirmation and validation (12 sec in Ethereum)
• Scalability: latency when more nodes join the network. Need for increased power and memory usage • Consensus: absence of code fined decision-making process (usage of consensus to
reach an agreement) • Regulations: Tight grip on ICOs, exchanges, cryptocurrency trading • Security: Funds lost due to hacking exchanges or wallets
• Power consumption 16
Total number of Mined Bitcoins
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Mining difficulty
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40%
3% 4%
53%
Legal
No Information Restricted Illegal
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Transaction cost
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Buying bitcoins
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Bitcoin Enthusiasts
Billionaire Peter Thiel: “people are underestimating bitcoin and it has great potential left� Thiel said he is "skeptical" of most cryptocurrencies except bitcoin
He compared bitcoin to gold 27
Bitcoin Skeptics Warren Buffett: “I can say almost with certainty that they will come to a bad ending”
American economist Nouriel Roubini: “the 'biggest bubble in human history, The fundamental value of Bitcoin is zero”
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Blockchain Hype or real! • Huge focus on advantages and exaggeration of the positive impact of blockchain in majority of publications. Downplaying challenges and drawbacks. • Another killer app (besides bitcoin) is needed to make it real!
• More R&D and proof of concepts is needed! • Do your own research!
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Thank you ali.alshidhani@gmail.com
@ali.alshidhani
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