Working with Blockchain at Proof of Concept Stage. Ildefonso Olmedo Rebecca Marvell

Transcription

1 Working with Blockchain at Proof of Concept Stage Ildefonso Olmedo Rebecca Marvell

2 Innovation If you search the internet for innovation you mostly get lightbulbs

3 Problem with new is that we don t understand it Does it work? How long will it take What will it cost? Can t we do it like we did last time? Is it any use? Might it be any use? Should we do it anyway in case So Let s Think About Innovation Sometimes you find a use for it, sometimes you re just wasting your time New things are always better than old things Andy Warhol

4 How do we approach it Proof of concept Scale Ideation Discovery Validation Integration X weeks X weeks X weeks X weeks X weeks X weeks X weeks X weeks New 0 Rationale/assumption/ evidence < XXk < XXX k (cumulative) < Xm (cumulative) Testing (evidence/metrics) Metrics Metrics/KPIs Decommission Civic technology Mid Stage: Mitigate/support/pause/end End Stage: Move/extend/pause/end

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6 Blockchain? What can I use a Blockchain for? We want to talk about Innovation that happens to use a Blockchain For us this is sort of the wrong question so Not that we aren t geeks who liked Blockchain once we saw it!

7 Do you need a database? NO YES Do you even need it? Does it require shared write access? YES NO Are writers known and trusted? YES Are writers interests unified? YES don t use blockchain NO NO Do you want/need to use trusted 3 rd party? YES NO Do you need to control functionality? NO YES Where is consensus determined? INTER FIRM INTRA FIRM Do you want transaction to be private or public? PUBLIC PRIVATE use a public blockchain use a hybrid blockchain use a private blockchain

8 Video 1 - Atomicity

9 Close Blockchain Types Open And if you do...which option? Read Write Commit Example Public permissionles s Open to anyone Anyone Anyone Bitcoin, Ethereum Public permissioned Open to anyone Authorized participants All or subset of authorized participants Sovrin Consortium Restricted to an authorized set of participants Authorized participants All or subset of authorized participants Multiple banks operating a shared ledger Private permissioned ( enterprise ) Fully private or restricted to a limited set of authorized nodes Network operator only Network operator only Internal bank ledger shared between parent company and subsidiaries

10 Understanding As part of Innovating you have to understand the state of the world. For example keeping on to of the technologies that could be used the Game Constantly analysing how Blockchain platforms stack up Category Platform 1 Platform 2 Platform 3 Mission Critical Platform Performance Integration Privacy Interoperability

11 International Payments What was the Business Problem? International Payments can be slow, expensive, difficult to do, unclear pricing Make them quicker, cheaper, easier

12 Innovation We found Ripple Had our minds blown And became Blockchain fans overnight But not experts When you innovate you often need to do things more than once

13 Innovation First implementation was with Ripple s Consensus Ledger o True Blockchain o Uses consensus across a known node list of trusted parties to solve the trust problem as opposed to, for example, proof of work o Consequently it s fast o Public network but trusted parties

14 Making a Payment EarthPort sends the money on using traditional rails Ripple Connect Ripple Connect Customer Pays via Apple Pay (easy as a finger print) Consensus achieved across the network Price is real, live, actual! Liquidity Provider Pricing Santander acts as the liquidity provider so provides a price

15 Original Payoo App

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17 Yay and Boo Amazing customer sees the real price Simple execution with Apple Pay Incredibly fast, phenomenal by traditional standards Will it scale? Is it private enough? Holding digital assets, what does that mean? Each destination bank needs on boarding separately We need to keep the things people like remove the problems So what do we do next?

18 Inter Ledger Protocol Like HTTP for Payments To address these problems Ripple are using elements of the Inter Ledger Protocol ILP They have built xcurrent to make it easier to use the protocol Santander is using ILP as part of RippleNet to make international payments Let s take a look at one of the features as an illustration of a Blockchain technology used by ILP

19 How Does ILP Work From 10,000 feet Originating Bank ILP Validator Beneficiary Bank Liquidity Provider Originating Bank Ledger Beneficiary Bank Ledger Originator 0 Liquidity provider 0 Hold 100 Liquidity provider Hold 100 Beneficiary 0 Payments are transfers between ledgers over ILP. The use of holds on the source and destination account(s) mean the money is available, the validator(s) can build trust between the ledgers and take control of the final money move using block chain technologies like Crypto Conditions and networked trust

20 Crypto Conditions This is about making a statement which is encoded in such a way that you can later prove the thing you claimed No I don t really get it either, at least I do but only until the next day when, like Quantum entanglement, I forget it again So let s use a simple example of a simple Crypto Condition So you can follow any of this remember SHA or Secure Hash Algorithm is a mathematical function that produces output that represents the input. It s a huge number which means faking it is practically impossible. For example, Bitcoin uses SHAs to protect the chain cc:0:3:db-8fb14mdo75brp_pvh4d7ganckilrrl13rs_umrxa:66

21 Becky Tries to Explain Crypto Conditions One type of Crypto Condition is a Hash Lock I will now make a hash of explaining it If you didn t smile, or at least groan, at this you re probably in the wrong room #

22 Playing Games Alice and Bob want to play Rock Paper Scissors over the internet If they just send each other their guess they can cheat by seeing the other s guess then changing theirs Bob chooses paper and s it to Alice Paper Alice sees the guess and cheats, she chooses Scissors and wins!

23 Solution is to use a Hash Lock Bob chooses paper, adds a secret and uses a SHA function to create a hash lock and s it to Alice Paper+Secret SHA Alice gets Bob s guess but it s a SHA so she can t cheat. She has to guess, add her own secret and SHA it sending the result to Bob Rock+Secret SHA My guess Paper Alice s unlocked guess Rock Paper wraps rock Bob wins! Alice SHA Bob SHA Alice s Bob s secret secret After they ve sent each other their Hash Locked guess they share their answers and secrets and both can open the guess and see if they won My guess Rock Bob s unlocked guess Paper

24 What Does Santander Use It For? Transferring money abroad should be quick and easy, which is why we built One Pay FX Make international payments to friends, family or your own foreign accounts You can make regular international payments of up to 10,000 using the latest rates Euros, to all 19 Eurozone countries US dollars, to the USA. Enter the amount you want to send in Pounds, or what you want to be received in Euros or Dollars See the actual amount that will arrive Store payment details see all the payments you ve made using the app Currently for Santander debit card holders Typically payments are processed the same day See Santander s website for complete details

25 So How Does It Work? 10,000 feet Application Santander xcurrent HOLD PAY ILP Ledger Quote xcurrent: Account Data ILP: Payment OtherBank xcurrent HOLD PAY ILP Ledger Onward payment system Direct to Destination Account Customer uses the And app pays to enter using details just a finger and get print a price Look out here comes the Crypto Condition Compliance Screening Payment data is sent securely to the destination bank by Both Banks have If everything xcurrentis all the Payment Data OK so the Validator can funds screen go on hold via ILP Compliance Screening Validator sees hold and instructs payment Hold was successful so tell the validator

26 OnePay FX

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28 from

29 Thank You

30 A Few References