BLOCKCHAIN BASICS

Vijay Srinivasan
SMIT Inc.
Mumbai, India
THE DIGITAL ECONOMY
The true size of the 2016 digital economy is US $11.5 trillion globally. That is, 15.5% of global GDP. This
is roughly three times larger than traditional measurements

Digital Economy is characterized by consumerism, delivering experience and value thru digital technologies
THE DIGITAL ECONOMY – GUIDING PRINCIPLES

How do we empower consumers?

How do we enable organizations

for the future?

How do decentralize information

and flow in a secure manner?

How do organizations create

strong digital footprints?
 BLOCK CHAIN DEFINED . .
A Blockchain allows untrusting parties with common interests to co-create a permanent, unchangeable
and transparent record of exchange and processing without relying on a central authority

Achieves thru ……..

DISTRIBUTED LEDGER
Distributed ledger that records all transactions securely. The ledger
holds immutable transactions

SMART CONTRACTS
Smart Contracts enable inline processing of rules or business logic to
enable contractual terms and conditions are met

CRYPOGRAPHIC Secure preventing unauthorized modification, inspection, recording

SECURITY or destruction of information

Data provenance refers to records of the inputs, entities, systems,

and processes that influence data of interest, providing a historical
DATA PROVENANCE record of the data and its origins

A consensus mechanism is a fault-tolerant mechanism that is used in

blockchain to achieve the necessary agreement on a single data
CONSENSUS
value or a single state of the network among distributed processes
or multi-agent systems.
BLOCK CHAIN – TYPES AND KEY COMPONENTS
BLOCKCHAIN TYPES BLOCKCHAIN COMPONENTS

PARCTICPANTS – BUYERS, SELLERS, VALIDATORS …

Fully Decentralized

State is visible to all nodes in the

Blockchain Network
PERMISSIONLESS
Secured by crypto economics – the
combination of economic incentives GLOBAL STATE – REFLECTS THE GLOBAL STATE OF A TXN VALDIATED
and cryptographic verification using AND FINALIZED BY BLOCKCHAIN
mechanisms such as proof of work or
proof of stake

A blockchain where the consensus

process is controlled by a pre-selected
set of nodes as consortiums
CONSORTIUM
 The right to read the ledgers in the
blockchain may be public, or restricted
to the participants making it partially
de centralized
DISTRIBUTED LEDGER – USES INDEPENDENT NODES TO RECORD AND
SYNCHRONIZE BLOCKCHAIN TXNS ENFORCING DECENTRALIZATION.
ORGANIZES DATA (TXNS DETAILS) INTO BLOCKS THAT ARE
CRYPTOGRAPHICALLY SECURE AND CHAINED TOGETHER IN APPEND
ONLY MODE. LEDGERS ARE IMMUTABLE
CONSENSUS – PROTOCOLS THAT ENSURE ALL NODES ARE
SYNCHRONIZED WITH EACH OTHER AND ENABLE AGREEMENT ON
WHICH TXN IS LEGITIMATE AND SHOULD BE ADDED TO THE LEDGER

•Write permissions are kept centralized

to one organization or entity
PERMISSIONED
• Read permissions may be public or
restricted to an arbitrary extent
GOVERNANCE AND ADMINISTRATION – MANAGE BLOCKCHAIN
ECOSYSTEM, SECURE TXN FLOW AMONG PARTICPANTS ETC
BLOCKCHAIN – CONSENSUS & DISTRIBUTED LEDGER

Seller Buyer

Validators

GLOBAL STATE BLOCKCHAIN TXNS

BLOCK CHAIN HANDLING CONFLICTS ARISING OUT OF DECENTRALIZATION - CONSENSUS MODELS
BLOCKCHAIN TXN CONSENSUS MECHANISM BLOCKCHAIN TXN FLOW BY CONSENSUS

In Proof Of Work, Miner Bob and

PROOF OF WORK Miner Joe compete against each
other to solve a cryptographic
puzzle. Whoever solves it first, gets
to add their block to the chain

•Proof Of Stake involves Bob and Joe

putting up their coins into a “jar”. A
coin is randomly picked from the jar.
PROOF OF STAKE If it belongs to Bob, Bob gets to add
his block. If it belongs to Joe, Joe
gets to add his block instead.

•PoA consensus is essentially an

optimized Proof of Stake model
PROOF OF
that leverages identity as the form
AUTHORITY
of stake rather than actually staking
tokens.
BLOCKCHAIN PLATFORMS TODAY …
BLOCKCHAIN IN MOTION – USE CASE : PHARMA SUPPLY CHAIN

DECENTRALIZATION

SECURED TRANSACTIONS

DIGITAL
ECONOMY

DATA PROVENANCE

DEMOCRATIZATION
TOWARDS DIGITAL ECONOMY - APPLICATION OF BLOCKCHAIN IN INDUSTRY
DIGITAL DISRUPTION AND BLOCKCHAIN – THE WAVE IS CRESTING
BLOCKCHAIN – JOB OPPORTUNITIES
In India, the demand for blockchain developers has grown by a staggering 700% after 2017!
And in keeping with this huge demand, salaries that companies are offering these developers have
also gone through the roof. A blockchain developer commands a salary close to USD 100000 – that too
when he/she is not too senior.
BLOCK CHAIN IN SUMMARY …

THINK DECENTRALIZATION, NO INTERMEDIARIES …

DEMOCRATIZATION

THINK CRPTOGRAPHIC DRIVEN SECURITY

DECNTRALIZATION OF
INFORMATION

THINK BUSINESS TRANSACTIONS

BUSINESS AGILITY

DIGITIZATION OF
THINK CONSENSUS
VALUE CHAIN
Thank You ..