Commercial Blockchain Application & Scalability

Transcription

1 Commercial Blockchain Application & Scalability JH theloop

2 Table of Contents 01. Considerations for blockchain application 02. Case study: KOFIA consortium blockchain 03. Expansion in blockchain theloop

3 Goal of Blockchain To enable direct transaction from one party to another without a TTP (Trusted Third Party) What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. 3

4 Common Errors and Things to Consider When Implementing Blockchain Claim that blockchain technology makes certain service available Claim that an intermediary is untrustworthy 4

5 Blockchain Technology Test and Use Cases According to the analysis of well-known cases, blockchain technology has been tested for about 50 categories and most tests were conducted in the capital market and general financial services area Source: KPMG(2017) 5

6 Blockchain Consortium in the Press Release 6

7 Japan Bank Consortium Establishment 61 Bank members and counting Established in October 2016 with 42 founding bank members in Japan Objective To establish a unified platform for domestic and cross-border payments by utilizing Ripple s distributed ledger technology Organizer SBI Group, a Japan-based financial service holding company, and SBI Ripple Asia, a joint venture between SBI and Ripple 7

8 Current State of Global Blockchain Consortia There are more than 40 blockchain consortia worldwide and financial services industry is leading blockchain consortium trend Number of Consortia by Sector Services 26 Cross-Sector 10 Life Sciences & Health Care 3 Energy & Resources 1 Technology, Media & Telecommunications 1 Public Sector 1 Source: Deloitte(2017) 8

9 Success Factors of the Blockchain Consortium According to an analysis result of more than 40 consortia, Funding, Membership, Leadership, Governance Structure are key factors for success of a consortium Securing enough funds is crucial as it takes a long time and huge amount of capital to test and commercialize blockchain technology for consortium Funding Membership Motivating the involvement of key institutions in the industry strengthens the influence of the consortium Governance Leadership The optimal governance structure is needed to coordinate the various issues that arise as the consortium proceeds A consortium can be further promoted when a consortium leader plays an active role in business and technology development Source: Deloitte(2017) 9

10 Table of Contents 01. Considerations for blockchain application 02. Case study: KOFIA consortium blockchain 03. Expansion in blockchain theloop

11 Korea Investment Blockchain Consortium The Korea Investment Association(KOFIA) is the sole self-regulatory organization of Korean financial industry KOFIA acts as a think-tank for the financial investment industry, dedicating its efforts to take a leading role in promoting the development and globalization of the Korean capital market 25 firms have participated in the consortium, numbers will be steadily growing 11

12 Roadmap Apply blockchain technology to authentication, post-trading and trading business of broker/dealers Trading Authentication and information sharing Post-Trading '20 ~ '18 ~ '19 '17 - '18 Expected business Universal authentication & information sharing based on blockchain Clearing & Settlement OTC bond, OTC stock, trading in capital markets 12

13 Process of Government Authentication: As-Is A separate trusted third party (accredited certification body) is required with a high operating cost and a complicated registration process Issue Certificate Register Certificate Use Certificate Third party required One year validity Our of service when system fails user 4 Issue certificate Accredited certification body Need to register in each institution InstitutionA user Accredited certification body 1 Apply for certificate & undergo personal verification 3 Request certificate 2 Register Institution (Bank/ Securities) user Institution B 2 Enter Password 3 Digital signature 1 Request digital signature 4 Confirm certificate status 5 Send confirmation results Institution (Bank/ Securities) 6 Transaction complete Institution C 13

14 Process of Universal Authentication: To-Be Issuance / registration / usage of certificate based on blockchain eliminates unnecessary process and reduces costs Issue Certificate Register Certificate Use Certificate Certificate issued through consensus of consortium members Institution A Institution B Register once for all institutions Institution A Institution B Construct Fault Tolerance System Institution A Institution B user Institution C user Institution C user Institution C Certificate issued Synchronize Certificate Validate Certificate 14

15 Blockchain Authentication: Shared Data vs. Smart Contract Institution A Institution B Institution A Institution B User Certificate Authority Institution F Shared Authentication Information Institution C User Institution F Smart Contract Institution C Institution E Institution D Institution E Institution D Blockchain-based Authentication Data Sharing Smart Contract Based Authentication Service 1. institution confirms user identity 2. Certificate is generated based on the certificates that each financial institution holds 3. Upload and share the generated certificate on the blockchain 4. Each node authenticates user based on the certificate registered on blockchain 1. institution confirms user identity 2. Each financial institution registers its request to issue certificate on the blockchain 3. Executes smart contract after request is verified 4. Users are verified based on the certificate generated by smart contract on each node The logic of authentication data generation is not verified by blockchain If the data registered by each node is reliable enough, Data Replication service can be used instead of blockchain The contract is executed by the code in accordance to the consensus among consortium members for certificate issuance and usage Blockchain ensures the immutability and reliability of issuance/management code generating the certificate 15

16 Smart Contract Authentication Service Certificate issuance and verification service without a centralized certificate authority based on Smart Contract on blockchain Certificate issuance and verification is not delegated to a separate entity Instead, Smart Contract executes the service by registering the certificate on blockchain and make it a certification entity that is trusted by all participating nodes RA Service RA Service Contents of Contract The certificate and its status information are shared by the contract Information for certificate issuance includes DN, expiration date, public key, etc If the node's digital signature in the transaction history is verified, the certificate is issued based on the issuance request information included in the transaction history and is added to the contract data. Features Blockchain itself becomes the certification authority, therefore does not require a separate certification authority to issue the certificate Certificate issuance key is issued every block based on Smart Contract and is used to issue X.509 certificates without managing of a certificate issuance key institutes performs the role of RA like accredited certification systems RA Service RA Service 16

17 Certificate Issuance Based on Blockchain After requesting certificate issuance through each securities company, it creates a transaction based on the information required for issuing the certificate and executes the Smart Contract to generate the certificate Blockchain Execution 1 User Authentication 6 Create transaction of certificate issuance to leader peer 8 Request Verification and Send Result (Consensus Algorithm) Company D [Leader Peer] 3 Request Issuance of Certificate Company A Legacy Company A Company B Company C 7 New Block Generation 13 Certificate (MTS/HTS) 4 Create Transaction on Certificate Issuance (Public Key) 9 New Block Added 5 Request Certificate Issuance (Blockchain Transaction Generated) Certificate Management SCORE 10 Certificate Issuance through Smart Contract 12 Send Issuance Result (Certificate) [LIST] [LIST] [LIST] [LIST] 11 Certificate Registration/ Discard List 11 Certificate Registration/ Discard List 11 Certificate Registration/ Discard List 11 Certificate Registration/ Discard List Blockchain Record 17

18 Certificate Verification Based on Blockchain Verify certificate validity with the authentication information stored in the Smart Contract of each participant: Provides the same functionality as existing OCSP Blockchain Execution 2 Request Certification (Submit Certificate) Company A Legacy 3 Verify Certificate Request (Verify Digital Signature) Company A Company B Company C Company D 6 Authentication Result (MTS/HTS) 4 Extract Certificate Information 5 Check Certificate Status Certificate Management SCORE [LIST] [LIST] [LIST] [LIST] Certificate Registration/ Discard List Certificate Registration/ Discard List Certificate Registration/ Discard List Certificate Registration/ Discard List Blockchain Record 18

19 Table of Contents 01. Considerations for blockchain application 02. Case study: KOFIA consortium blockchain 03. Expansion in blockchain theloop

20 Polkadot A platform for inter-blockchain connection that does not provide its own application function Led by Ethereum co-founder and CTO Gavin wood, scheduled to open in Q

21 MS Coco Framework Provides its own framework for blockchain application in enterprise environments Scheduled to open in

22 MS Coco Framework Constructs nodes based on State Replication Machine Supports integration to various blockchains in TEE 22

23 ICON Project The ICON Project was launched to address the problem with interoperability Through the C-Rep of each independent community of blockchain, different blockchains can be connected to one another on Nexus Multiple Nexus can co-exist and connect with each other as well Constructs nodes based on State Replication Machine Supports integration to various blockchains in TEE 23

24 Blockchain Transmission Protocol (BTP) BTP Comments light client B BTP is a protocol to connect transactions between blockchains light client B Light Client Channel B light client B light client B Blockchain B Transmitter blockchain transfers transaction to the receiver blockchain via Notary Channel in Nexus Blockchain A light client A light client A Light Client Channel A light client A light client A Nexus nodes with voting rights to the Notary channels (validator nodes) possess multiple channels, where the Light Client of each blockchain connected to Nexus is counted as one channel A Notary channel is implemented based on Multi-Channel feature of Nexus Blockchain A ICON Nexus Blockchain B Transactions confirmed by respective blockchains can be identified through the blockchain s Light Client connected to Nexus 24

25 Blockchain Transmission Protocol (BTP) (continued) Notary Channels Comments ICON Nexus Notary Channel Portal Destination Blockchain Multiple signatures of nodes with voting rights to request Notary registration are included in the blocks to form blockchains of the Notary Channel Notary Channel Transaction Flow ICON Nexus The block data with the transactions registered to Notary channel will be transmitted to the Receiver blockchain via Portal When the Receiver blockchain verifies the relevant block data, it validates the signature of each node based on the certificates of nodes from Notary channel If two-thirds or more of the signatures are confirmed according to the Notary channel standards which follows the LFT consensus algorithm, the consensus will be confirmed and the requested transaction will be executed ICON Nexus 25

26 BTP Example Certification Transfer 2 Consensus on issuing certificate 6 Transfer validation result using BTP Blockchain A ICON Nexus Blockchain B 7 Check validation result 5 Request validation of certificate Client Client 1 Request certificate 3 Issue certificate 4 Submit certificate 26

27 Thank you! JH theloop