1. Blockchains, Simply Explained Running services on magic distributed computers for fun and profit

2. What are blockchains? ● Decentralized database ● Decentralized computer ● Managed by thousands of nodes controlled by thousands of users at the same time o No single point of trust o No single point of failure ● All execution fully transparent, history recorded forever

3. What are blockchains? ● Anyone can launch a decentralized service ● Once the service is launched, it is guaranteed to execute in a predetermined way for as long as any users care about it

4. What are blockchains? ● But…. computation and transactions much more expensive o Upcoming scalability tech will mitigate this, but not completely o Often, the overhead is small in an absolute sense

5. Types of blockchains ● State transition rules o Bitcoin (currency only) o Ripple (currency + fintech tools) o Ethereum (general-purpose computer) ● Who controls it? o Anyone can join validator pool at economic cost (proof-of-work, proof-of-stake) o Trust network (Ripple consensus) o A few specific pre-determined nodes

6. Why use it?

7. A bunch of reasons ● Excellent base layer for interoperable ecosystems of services ● Resistant to governmental and corporate censorship (and if you don’t want that, you can make a private chain) ● Zero-upfront-cost solution for secure application development ● Good financial backbone ● No centralized parties at the base layer

8. What kinds of services?

9. Completely innocuous use cases ● RemindMe ● “If this then that” ● Document timestamping ● Software update notifications

10. Completely innocuous use cases ● Idea: as it turns out, blockchains are a pretty good software deployment platform in many cases ● If you have <1000 users, it’s actually cheaper to pay txfees than it is to bother maintaining your own server ● Also, you get six nines uptime (higher than Google quality!) ● Security primitives (eg. public key infrastructure, account management) for free

11. Data rot

12. ● As we move from “web of interlinking data” to “web of of interlinking software”, long-term service availability may be almost as important as long-term data availability ● Blockchain: a software development platform with its own built-in “Internet Archive” for services ● And BTW, blockchain-based contracts can incentivize plain old long-term data archival too Service rot

13. The Bottom Layer ● Currencies / other digital assets ● Identity ● Domain name registration ● Certificate validity information ● Data feeds (prices, weather, other information)

14. Building on top: smart contracts ● Scripts that control money! ● “If X happens, send $Y to A, otherwise send it to B” ● Can “interact with” any currency and data feed on the same blockchain

15. Smart contract types Pure ●Decentralized file storage ●Cloud computing ●Math puzzle bounties ●Ultra-expensive outsourceable KDFs Nearly pure ●Financial derivatives ●Weather insurance (earthquake, drought, temperature, etc) ●Prediction markets Highly subjective●Creative labor evaluation ●Physical labor evaluation ● Product shipping ●Insurance

16. Smart contracts + arbitration UPS = 4430744ec346e2f79275ec163c1fb72e547aa164 ROBERT_JULES = 742663e8e200b37352860a34630754e54b843f46 FRED_MANN = 509de5b1eb16efa2d072450f3228dc7301ca9cea NETARB = 22b1638fc739c05407b8ec1965a22928a7739237 SELLER = e3627a3a8c1672ffd8a66eb9b022aeba92f94467 clause_1 = eval(2_of_3(ROBERT_JULES, FRED_MANN, NETARB), “The Covered Product performs all functions as advertised and has no material defects”) clause_2 = eval(UPS, “The Covered Product has been safely delivered to its destination”) if clause_1.true() and clause_2.true() and timestamp > 1750000000: send(50 USD, SELLER)

17. ● In order to have persistent relationships, you must have an identity ● Currently, on the web, your identity is controlled by Google, Facebook, etc ● Is relying so heavily on private companies really such a good idea? Blockchains and Identity

19. Building a decentralized service is the strongest way for an application developer to pre-commit not to be a jerk (and not to shut down) forever

20. ● Identity and reputation are core barriers to entry when building higher-level services ● Claim: decentralizing identity, and moving data to an open platform, may massively reduce barriers to entry in higher-level industries The Web of Trust

21. ● Intuition: building a “generalized trust layer” for the internet ● Note: the case for generalized trust layers is logically separable from the case for blockchains ● However, if generalized trust layers are a good idea, then blockchains are a good data platform for them The Web of Trust

22. M-of-N custodianship

23. Certificate Authorities ● Why exactly aren’t certificate authorities M-of-N?

24. So how do you build a blockchain application?

25. With Ethereum, we try to make it easy

26. ● Before: HTTP request to server ● Now: Network request to blockchain ● In many cases, just swapping one with the other is enough ● Hybrid solutions: can talk to both blockchains and servers if desires Building Blockchain Apps

27. ● Scalability / cost-of-consensus reduction ● Standardization o Blockchains more powerful than just currency systems can have rather strong network effects! ● Privacy o Hybrid contract evaluation schemes o Cryptography The future

28. So what is the killer app for blockchains?

29. Well, what is the “killer app” for “open source”?