«BlockChain Technology Beyond Bitcoin Abstract A blockchain is essentially a distributed database of records or public ledger of ...»
Sutardja Center for Entrepreneurship & Technology Technical Report The characteristics of the BlockChain can help address some of the limitations of the PKI by using Keyless Security Infrastructure (KSI). KSI uses cryptographic hash function, allowing verification to rely only on the security of hash functions and the availability of a blockchain.
Section IV: Risks for Adoption BlockChain is a promising breakthrough technology. As we described before, there are vast array of applications or problems that can be solved using BlockChain based technology. That spans from Financial ( remittance to investment banking ) to non-financial applications like Notary services. Most of these are radical innovations.
As it happens with adoption with radical innovations, there are significant risks of adoption.
Behavior change: Change is constant, but there is resistance to change. In the world of a non-tangible trusted third party, that BlockChain presents, customers need to get used to the fact that there electronic transactions are safe, secured and complete.
The present day intermediaries like Visa or Mastercard ( in case of a credit cards ) will also go through change roles and responsibility. We envision that they will also invest and move their platforms to be BlockChain-based. They will continue to provide the customer relationship kind of services.
Scaling: Scaling of the current nascent services based on BlockChain presents a challenge. Imagine yourself executing a BlockChain transaction for the first time. You will have to go through downloading the entire set of existing BlockChains and validate before executing your first transaction. This may take hours or longer as the number of blocks increase exponentially.
Bootstrapping: Moving the existing contracts or business documents/frameworks to the new BlockChain based methodology presents a significant set of migration tasks that need to be executed. For example in case of Real Estate ownerships/liens, the existing documents lying in County or Escrow companies need to be migrated to the equivalent BlockChain form. This may involve time and cost.
Government Regulations: In the new world of BlockChain-based transactions, Government agencies like FTC, SEC, etc may slow down the adoption by introducing new laws to monitor and regulate the industry for compliance. In USA, this may in a way help adoption as these agencies carry customer trust. In more controlled economies like in China, the adoption will face significant headwind.
Sutardja Center for Entrepreneurship & Technology Technical Report Fraudulent Activities: Given the pseudonymous nature of BlockChain transactions, coupled with ease of moving valuables, the bad guys may misuse this for fraudulent activities like money trafficking. That said, with enough regulations and technology support law enforcement agencies will be able to monitor and prosecute them.
Quantum Computing8 : The basis of BlockChain technology relies on the very fact that it is mathematically impossible for a single party to game the system due to lack of needed compute power. But with the advent of Quantum Computers ( in future ), the cryptographic keys may be easy enough to crack through sheer brute force approach within a reasonable time. This will bring the whole system to its knee. The counter-argument would be for keys to become even stronger so that they may not be easy to crack.
Section V: Corporate Funding & Interest In 2015, the bitcoin currency has reached yearly highs in both volume and price over the course of September-October. The digital currency is gaining traction both in the consumer marketplace, as a tradeable security, and with regulators. It isn't just digital-currency enthusiasts that are bullish. Equity research firm Wedbush expects it to rise to $600 because of the growing adoption.
http://www.makeuseof.com/tag/quantum-computers-end-cryptography/ Sutardja Center for Entrepreneurship & Technology Technical Report
This enthusiasm may be because of the large quantities of capital being injected into the digital infrastructure. Excitement grows as Bitcoin and blockchain firms have received a record US$1 Billion in investments as the year comes to an end. American Express, Bain Capital, Deloitte, Goldman Sachs, MasterCard, the New York Life Insurance Company, the New York Stock Exchange -- all of them have poured millions of dollars into Bitcoin firms recently. Corporate funding into Bitcoin & Blockchain infrastructure is growing and generating interest in several segments. Nasdaq is tapping blockchain technology to create a more secure, efficient system to trade stocks. DocuSign, a company that specializes in electronic contracts, just unveiled a joint idea with Visa to use blockchain to track car rentals and reduce paperwork. Microsoft will unveil details about its venture into "smart contracts" that use blockchain technology. Meanwhile, this new obsession with blockchain technology has reached a point that companies are even experimenting with creating smaller, "private blockchains" inside their own offices. They hire companies like BlockCypher, a startup out of Redwood City, California to develop blockchain technology within their business.
http://www.vox.com/technology/2015/10/31/9651168/bitcoin-growing Sutardja Center for Entrepreneurship & Technology Technical Report Section VI: Conclusions To conclude, Blockchain is the technology backbone of Bitcoin. The distributed ledger functionality coupled with security of BlockChain, makes it very attractive technology to solve the current Financial as well as non-financial business problems.
http://risktech-forum.com/opinion/a-risk-based-view-of-why-banks-are-experimenting-with-bitcoin-and-the-block Sutardja Center for Entrepreneurship & Technology Technical Report
16. Quantum Computers: The End of Cryptography?
Appendix A. BlockChain for AntiCounterfeit Solution: BlockVerifyprovides blockchain based anti-counterfeit solutions that introduce transparency to supply chains. It is finding applications in pharmaceutical, luxury items, diamonds and electronics industries.
For example, pharmaceutical industry can use BlockVerify anti-counterfeit solutions to prevent fake pharmaceuticals from entering the market. This addresses a big problem that affects both the economy and people who need medicine.
Similarly luxury good manufacturers can use this technology to build system for verifying the authenticity of luxury goods providing a win-win situation for consumers and manufacturers of the luxury goods alike.
Diamond industry can use this technology to build trust in Diamond certificates and prevent fraud.
Electronics industry can use this technology to ensure that consumers get genuine products.
Sutardja Center for Entrepreneurship & Technology Technical Report Any industry can use BlockVerify technology to define a process that its products go
through to ensure their authenticity. This is how BlockVerify works:
Filament technology stack uses five layers-blockname, telehash, smart contracts, pennybank and BitTorrent. Each device is equipped with the ability to handle communications on all five layers.
Using blockname, devices are able to create a unique identifiers which are stored in a part of the device’s embedded chip and recorded on the blockchain.
Telehash, in turn, provides end-to-end encrypted communications and BitTorrent enables the file sharing.
Sutardja Center for Entrepreneurship & Technology Technical Report Payments for the devices’ use is handled by smart contracts, which allows the terms of the payments and access to the device to be controlled programmatically.
Filament uses a bitcoin-based protocol that it has developed called Pennybank for microtransactions on its platform, in part of unique need of IoT devices. IoT devices are not high power and they are not always online, Pennybank creates escrow service between two IoT devices, allowing them to settle transactions when they are connected online.
C. BlockChain in Music Industry: Fair MusicTransparency and Payments Flow in Music Industry The music industry has gone a big change in last decade due to the growth of Internet and availability of a number of streaming services over the Internet. It is impacting everyone in the music industry-artists, labels, publishers, songwriters and streaming service providers. The process by which music royalties are determined has always been convoluted one, but the rise of the Internet has made it even more complex giving rise to the demand of transparency in the royalty payments by artists and songwriters.
The Rethink Music initiative at the Berklee College of Music’s Institute of Creative Entrepreneurship spent the last year examining the practices of the music industry in its report “Fair Music Transparency and Payment Flows in the Music Industry”.
According to this report 20% to 50% of money generated by streaming services never goes back to those artists whose songs were played. The relationships among rights, royalties, processes and participants are hopelessly complex and outdated.
The royalty payment distribution is overly complicated-money only makes it to artists and songwriters after passing through a number of intermediaries, each with its own accounting processes, timelines, fee structures, and reporting standards.
This means that artists and songwriters are completely oblivious to their rights and how they are paid for their performances.
Sutardja Center for Entrepreneurship & Technology Technical Report A quick primer: Every time a song is streamed or played two types of royalties are paid. The larger chunk goes to the performing artist or, more precisely, to the company that owns the rights to those royalties, usually a record label. The other chunk goes to the songwriter or, again to the company controlling the rights.
Streaming service providers sometimes do not even make direct payments but rather rely on organizations that manage royalties to large groups of copyright owners. A part of the royalty payments go to these intermediaries.
Figure 10. Royalty Payments in a streaming service.
Figure 10 shows the typical way that the royalties for a song streamed on Apple Music, Spotify, Tidal or a rival subscription service would be go the various stakeholders. It is even more complicated than that. There can be deals between streaming service providers and labels that artists and songwriters might be totally oblivious to.
There is need in the music industry eco-system that tracks songs being played and various rights associated with each played song. Also, there is need to link this to a payment method. Music Industry basically needs simplified rights ownership Sutardja Center for Entrepreneurship & Technology Technical Report information: who made it and who owns the rights to it. Currently there is no central database available that keeps track of this information regarding music. In reality, the information about who did what on a given record almost always exists in distributed databases that do not synch with each other.
This is where the blockchain can play a role by maintaining a comprehensive, accurate distributed database of music rights ownership information in a public ledger. In addition to rights ownership information, the royalty split for each work, as determined by “smart contracts” could be added to the database. For instance, each song, rights-holder, songwriter and payer would have its own unique address on the ledger. The “smart contracts” would define relationships between different stakeholders (addresses) and automate their interactions. Each time a song is played, the money would be automatically split among the stakeholders according to the set terms, and each stakeholder’s account would instantly reflect the additional revenue.
“ PeerTracks “ ” are two startups in this space. ” and Ujo D. BlockChain for Distributed Storage Cloud storage,as it exists today, operates through data providers serving as trusted third party. Figure 11 shows the traditional cloud based storage architecture to transfer and store the data through a trusted cloud service providers such as Google drive, Dropbox and One drive. They enforce industry standard redundancy policy by storing multiple copies of the data ( typically three copies). However, there is no standard way of doing end-to-end encryption and hence the traditional cloud based architecture is open to variety of security threats such as malware, man-in-the middle attacks and application hacks that can expose sensitive and private consumer or corporate data. Sutardja Center for Entrepreneurship & Technology Technical Report
The challenges of the traditional storage network can be met by implementing a peer-to-peer cloud storage network providing end-to-end encryption, where users can securely transfer and share data without relying on a third party for security and reliability. It removes the reliability since there is no dependency on a third party and hence it eliminates traditional data failures and outages. Moreover, it significantly improves the security and privacy of the data.
Storj a peer-to-peer cloud storage network that uses etaDisk block-chain is M,a based decentralized file storage application. It addresses many of the shortcomings that we find in a traditional cloud-based storage system.
https://github.com/Storj/whitepapers/blob/master/metadisk/Metadisk%20Whitepaper.pdf https://github.com/Storj/whitepapers/blob/master/metadisk/Metadisk%20Whitepaper.pdf Sutardja Center for Entrepreneurship & Technology Technical Report
https://github.com/Storj/whitepapers/blob/master/metadisk/Metadisk%20Whitepaper.pdf Sutardja Center for Entrepreneurship & Technology Technical Report E. Blockchain’s Growing Popularity
1. Bitcoin Venture capital investments in millions17
2. Bitcoin is increasingly becoming international http://www.vox.com/technology/2015/10/31/9651168/bitcoin-growing Sutardja Center for Entrepreneurship & Technology Technical Report
3. More Bitcoin Transactions Than Ever