1. Blockchain
Adrian Zaragoza

2. Present Day
Contracts, transactions, and the records have not kept up with the digital transformation.
Transactions end up being costly; middlemen are required to perform some transactions (contracts, transfer of ownerships, etc.)
Blockchain is the answer to this problem
Open, distributed ledger that can record transactions between two parties
Efficient, verified, and permanent

3. Blockchain Principles
Distributed Database
Each user (node) on the blockchain has access to the database and its history. The information is decentralized.
Peer to Peer Transmission
Communication occurs between peers. Each node stores and sends information to all other nodes.
Transparency with Pseudonymity
Transactions and its value are visible to everyone in the blockchain system
30-plus character alphanumeric address for each user (node)
Transactions occur between addresses

4. Blockchain Principles
Irreversibility of Records
Records cannot be altered; linked to every transaction record that came before them
Many computational algorithms and approaches ensures records to be permanent, chronologically ordered, and available to everyone in the network
Computational Logic
Blockchain transactions can be programmed; users can set up algorithms and rules to automatically trigger transactions between nodes
Inventory in Transit: The software can track the status of the inventory and when it lands in the customer, the payment is automatically sent to the supplier

6. Blockchain Adoption
Two dimensions affect how foundational technology evolves
Novelty: degree to which an application is new to the world
Higher in novelty will require more effort to ensure users understand what problems the new technology solves
Complexity: the number and diversity of parties that need to work together to produce value with the technology.
“network effect”
Adoption of foundational technologies happens in four phases
Single use
Localization
Substitution
Transformation

7. Four Phases of Adoption
Single Use: Applications that create better, less costly, highly focused solutions
Examples: as an alternative to phone calls, faxes, snail mail
Bitcoin: alternative global payment method
Localization: Applications that are relatively high in novelty but need only a limited number of users to create immediate value
Easy to promote their adoption
Local private blockchain networks
Substitution
Applications that build on existing single-use and localized applications, but are high in coordination needs because they involve broader and increasingly public uses
Transformation: Applications that involve coordinating the activity of many actors and gaining institutional agreement on standards and processes
Requires major social, legal, and political change

9. Implementing Blockchain in Organizations
Start with single use applications. Easier to implement and minimizes risk
Add bitcoin as a payment option
Localized applications can be the next step for organizations
Private blockchain networks
Financial service companies reduce transaction costs with private blockchain networks
Tracking items through complex supply chains
Careful planning for substitute applications. Focus on cost effective solutions that don’t require users to change their behaviors.
First Data’s gift card blockchain software
Transformative applications will need more time; pending

10. Areas Benefiting from Blockchain software
Banks: Many banks have invested funds for research and development in blockchain software
Real Estate
Healthcare
Supply Chain Management
Currency

11. Cryptocurrency

12. Cryptocurrencies
Irreversible: After a confirmation, a transaction can’t be reversed.
Pseudonymous: Transactions and accounts are not connected to real world identities
Fast and Global: transactions are completed instantly and confirmed within a couple of minutes
Secure: funds are locked in a public key cryptography system. Only the owner of the key is able to send cryptocurrency.
Cryptography and algorithms makes it secure
Permissionless: Anyone can use cryptocurrency
Two of the major cryptocurrencies are Bitcoin and Ethereum

13. Smart Contracts
Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman
Contracts written in code

14. REX-Global Real Estate
Uses Rex Tokens for transactions
Utilizes smart contracts to lower fees

16. Question
Would your organization (current employer) benefit from Blockchain? If so, how?

17. Question Which of the following is NOT a blockchain principle?
A. Transparency
B. Computational Logic
C. Centralized Database
D. Irreversibility

18. Question
Which of the four phases of adoption is low in complexity and low in novelty?
A. Substitution
B. Single Use
C. Transformation
D. Localization

19. Question What can you exchange with smart contracts? A. Money
B. Shares
C. Property
D. All of the Above