Bitcoin and Blockchain Explained:

Not just Cryptocurrencies, Economics, and Markets;

Applications in Art, Health, and Literacy

UC Berkeley, Berkeley CA, April 8, 2015

Slides: http://slideshare.net/LaBlogga

Melanie Swan
melanie@BlockchainStudies.org
www.BlockchainStudies.org

What is the Blockchain?

We should think about the blockchain as another class

of thing like the Internet a comprehensive information
technology with tiered technical levels and multiple
classes of applications for any form of asset registry,
inventory, and exchange, including every area of
finance, economics, and money; hard assets (physical
property); and intangible assets (votes, ideas,
reputation, intention, health data, information, etc.)

April 8, 2015
Blockchain Explained

Melanie Swan, Blockchain Scholar

Founder, Institute for Blockchain Studies

Singularity University Instructor, EDGE Contributor
IEET Affiliate Scholar

Swan, M. Blockchain: Blueprint for a New Economy. Sebastopol CA: O'Reilly Media, 2015.
Swan, M. We Should Consider The Future World As One Of Multi-Species Intelligence. Response to The Edge Question 2015: What do you
think about machines that think? John Brockman, Ed., 2015.
Swan, M. Cognitive Applications of the Brain as a DAC. Cognitive Science 2015: The Annual Meeting of the Cognitive Science Society: Mind,
Technology, and Society, Pasadena CA, July 2015. submitted.
Swan, M. Philosophy of Big Data: Expanding the Human-Data Relation with Big Data Science Services. IEEE BigDataService 2015,
Redwood City CA, Mar 31-Apr 2, 2015.
Swan, M. Blockchain Thinking: The Brain as a DAC (Decentralized Autonomous Corporation). Texas Bitcoin Conference, Austin TX, March
27-29, 2015.
Swan, M. Machine ethics interfaces: An ethics of perception of nanorobot-aided cognition. Journal of Responsible Innovation. submitted.

Traditional Markets,
Science, Arts Background

April 8, 2015
Blockchain Explained

New Vision

Source: http://melanieswan.com/publications.htm

Blockchain (non-technical overview of blockchain possibilities)

What people are saying

#mindblowing SD
Instrumental SG
Intriguing - JH
Great to read your book! Willing to transform
your ideas to real life AW
I find it amazing a good mix of explanation
about state-of-the-art products as well as
visionary ideas. I was waiting for awhile for this
kind of book JM
A compelling and unique overview of the
possibilities DC
Thank you for helping bring about a new era in
finance JW

April 8, 2015
Blockchain Explained

http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491

Agenda

What is Bitcoin/blockchain technology?

Currency, economics, and finance applications

Digital currency
Smart property
Smart contracts

Governance and legal applications

Science, health, literacy, and art applications

April 8, 2015
Blockchain Explained

What is Bitcoin?

Digital currency
Combination of BitTorrent technology (peer-to-peer file
sharing) and public key cryptography as solution to longstanding cryptography problems
Double-spend problem

Copiability of digital assets; digital cash, like an image attached

to an email, can be copied infinite times
Centralized third party required to issue and reconcile digital
cash transactions to prevent cash from being spent multiply

Byzantine Generals Computing Problem

Implication: any online transaction can be decentralized

Conducted in a peer-to-peer trustless manner without a

controlling authority in the middle

April 8, 2015
Blockchain Explained

Satoshi Nakamotos original design for the blockchain (2008) https://bitcoin.org/bitcoin.pdf

How does Bitcoin work?

1.

Download software wallet app

2.
3.

Blockchain.info, Mycelium, etc.

Transfer Bitcoin via QR Code / public key address

See your transaction confirm, post to the blockchain

April 8, 2015
Blockchain Explained

Where can I use Bitcoin?

April 8, 2015
Blockchain Explained

http://bitcoinmaps.info/, http://coinmap.org/, https://airbitz.co/

How big is the market and is it liquid?

April 8, 2015
Blockchain Explained

https://coinmarketcap.com/

Bitcoin Price Chart (one year)

Price ~stable around $250/1 Bitcoin so far in 2015

April 8, 2015
Blockchain Explained

https://blockchain.info/charts/market-price

10

Bitcoin Transaction Volume Chart (one year)

Persistent transaction volume despite price volatility

April 8, 2015
Blockchain Explained

https://blockchain.info/charts/estimated-transaction-volume-usd

11

What is the blockchain?

The open-source software upon which

Bitcoin runs

A transaction database, decentralized

public ledger of all transactions

A technology protocol layer like TCP/IP

Giant interactive Google doc spreadsheet

that anyone can view and administrators
(miners) continually verify and update to
confirm that each transaction is valid

Literally blocks (batches of

transactions) in a chain, a sequential
ledger of transactions

April 8, 2015
Blockchain Explained

https://github.com/bitcoin/bitcoin, https://bitcoin.org/en/download, https://getaddr.bitnodes.io/

12

How robust is the network?

6441 Global Nodes running full Bitcoind (April 2015)

April 8, 2015
Blockchain Explained

https://getaddr.bitnodes.io/

13

Economic and privacy arguments for Bitcoin

Banking services market

Remittances market

$4 tn global market, 5-30% transaction

fee; immediate funds transfer solution

Vendor payments market

5 bn individuals worldwide without access

to banking, financial, credit services

1-3% merchant transaction fee

Hack-able honey pot identity databases

Successful examples suggest

demand for digital payments

Starbucks mobile app, Apple Pay

April 8, 2015
Blockchain Explained

http://www.bitcoinvalues.net/who-accepts-bitcoins-payment-companies-stores-take-bitcoins.html

14

Financial and Public Records Applications

Financial instruments
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

Currency
Private equities
Public equities
Bonds
Derivatives commodities
Spending records
Trading records
Mortgage/loan records
Servicing records
Crowdfunding
Microfinance
Proxy fights

April 8, 2015
Blockchain Explained

Public Records
Land titles
Vehicle registries
Business incorporations
Criminal records
Passports
Birth certificates
Death certificates
Voter Registration
Voting Records
Health/safety inspections
Building permits
Court records

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

http://forum.ethereum.org/discussion/1402/how-to-get-started-your-first-dapp-under-one-hour

15

What is Smart Property?

Register assets to blockchain via unique key

Blocktrace ledger tracks diamonds

Real-time GPS LoJack tracking for any asset

Blockchain becomes an inventory, tracking,

and buy-sell mechanism for all hard assets
Decentralized asset exchange
Digital authentication access system

Blockchain-based keyless entry

April 8, 2015
Blockchain Explained

https://openbazaar.org/, http://www.edgelogic.net/blocktrace

16

What are Smart Contracts?

Agreements between parties posted to the

blockchain for automated execution
Examples

Bet on high temperature tomorrow

Inheritance pay-out at age 21 or death of benefactor
Mortgage with automatic interest-rate resets
Blockchain-based Greek tax receipts in Ricardian
Contracts (Yanis Varoufakis)
Koinify (Factom software licenses)

Code: Ethereum and Eris

https://github.com/ethereum/

http://www.etherparty.io/

https://erisindustries.com/

April 8, 2015
Blockchain Explained

https://eng.erisindustries.com/smart%20contracts/2014/12/17/dennys-smart-contracting/ ,
http://forum.ethereum.org/discussion/1402/how-to-get-started-your-first-dapp-under-one-hour,
17
http://financialcryptography.com/mt/archives/001555.html

Decentralized Application (Dapp) Ecosystem

Project Name and
URL

Activity

Centralized
Equivalent

OpenBazaar
https://openbazaar.org

Buy/sell items locally

Craigslist

LaZooz
http://lazooz.org

On-demand ride service

Uber, Lyft

Twister
http://twister.net.co

Social networking, peer-to-peer

microblogging

Twitter, Facebook

Gems
http://getgems.org

Social networking, private tokenbased social messaging

Twitter, SMS apps

Bitmessage
https://bitmessage.org

Secure messaging (individual or

broadcast)

SMS services

Storj
http://storj.io/

File storage

Dropbox, Google Drive

Onename
https://onename.com/
BitID
https://github.com/bitid/bitid
Bithandle
http://www.hackathon.io/bithandle

Digital identity verification

VeriFone, Verisign, Facebook

April 8, 2015
Blockchain Explained

http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491

18

Economic Principles: not just for Economics

Economic Principles

Traditional Deployment

Markets

Blockchain Deployment

Blockchain technology is
prompting us to rethink
economic principles in markets,
and apply them much more
extensibly to other situations in
a non-monetary sense
April 8, 2015
Blockchain Explained

Any interaction is a discovery

and exchange process
Abundance mindset and
overcoming scarcity
Decentralized models
supplement hierarchy
Demurrage incitatory potential
and resource redistribution
across network nodes
Reciprocal mining communities
19

Blockchain IOT

M2M/IOT Bitcoin payment network to

enable the machine economy
IOT 2020: 26 bn devices in a $7 tn market
The economic layer the web never had
Smarthome IOT networks

Self-mining ecologies
Privacy orchestration: devices, robotics, digital
personal health assistants

Blockchains: economic principle-driven

large-scale resource allocation and
coordination mechanisms

Smarthome IOT and

Personal Robotics
Coordination

Smartcity Connected
Car Coordination
April 8, 2015
Blockchain Explained

http://www.zdnet.com/article/internet-of-things-market-to-hit-7-1-trillion-by-2020-idc/,
http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491
20

Blockchains: Global and Liberty-enhancing

Global governance for transnational organizations

WikiLeaks, ICANN, Wikipedia

Benefits of blockchain administration

Uplift to cloud from local jurisdictional regulations

Universal administration mechanism for global organizations
Structure promotes transparency, accountability, freedom
Namecoin: decentralized DNS

Snowden Affair

April 8, 2015
Blockchain Explained

http://www.forbes.com/sites/andygreenberg/2010/12/07/visa-mastercard-move-to-choke-wikileaks/

21

Blockchain Government

Opt-in Personalized Government

Neighbor.ly

Self-directed community bonds

Precedentcoin

Composting vs education
Reputation-based ID system, voting,
dispute resolution, national income
distribution, public documents
registration and repository

Crowdsourced legal services, justice

entrepreneurs, blockchain arbitration

Sidekik

On-demand tele-attorney, private police

April 8, 2015
Blockchain Explained

Worlds First Blockchain Marriage:

David Mondrus and Joyce Bayo, October
5, 2014, Disney World FL, Coins in the
Kingdom Bitcoin Conference, Jeffrey
Tucker (Liberty.me) presiding

http://www.bitnation.co/, https://bitcoinmagazine.com/17066/first-blockchain-wedding-2/,
https://bitcoinmagazine.com/19813/sidekik-decentralized-video-streaming-storage/
22

Blockchain Representation and Voting

Futarchy, two-step program

1.
2.

Delegative democracy (Liquid Democracy)

.
.

Traditional vote on outcomes (ex: GDP)

Prediction markets to determine specific
proposals for achieving the outcome
Voting power temporarily vested in
delegates not long-term representatives
Group proposition development

Random Sample Elections

.

Randomly selected individuals vote on a

single issue, blockchain orchestration

April 8, 2015
Blockchain Explained

https://bitcoinmagazine.com/17066/first-blockchain-wedding-2/,
http://www.bitnation-blog.com/latest-update-dec-22nd-2014/

23

Blockchain Legal

Notary Service, Attestation

Register contracts, agreements, wills (Proof of Existence, Factom)

Register, protect, and transact IP (Monegraph, Ascribe)

How it works

Hash + timestamp + blockchain record

April 8, 2015
Blockchain Explained

http://www.proofofexistence.com/

24

Smart Contract
Law Firm?

Law is something to be
radically reshaped by
the emergence of
technology, it is about
the management and
manipulation of data on
an entirely new scale Richard Susskind

April 8, 2015
Blockchain Explained

http://www.robotandhwang.com/attorneys/

25

Blockchain Science and What is Mining?

Mining is the process of adding

transaction records to the public
ledger by performing a computing
task that is costly to execute but
easy to verify
Issue: mining is purposefully
wasteful to deter malicious players
Green mining projects

Primecoin
Foldingcoin
Gridcoin
Zennet

April 8, 2015
Blockchain Explained

http://www.righto.com/2014/02/bitcoin-mining-hard-way-algorithms.html,
http://codinginmysleep.com/bitcoin-mining-in-plain-english/
26

Blockchain Health

1.

Blockchain technology in health-related applications

EMRs: Personal Health Record Storage and Access

2.

Health Research Commons

3.

Aggregated personal medical records, quantified self data

commons (DNA.bits), genome and connectome files

Health Document Notary Services

4.

Personal health records stored and administered via blockchain

Users key-permission doctors and other parties into records

Proof-of-insurance, test results, prescriptions, status, condition,

treatment, physician referrals

Doctor Vendor RFP Services

(Like Uber drivers) doctors and health practices bid to supply

medical services; automated bidding via tradenets

April 8, 2015
Blockchain Explained

http://futurememes.blogspot.fr/2014/09/blockchain-health-remunerative-health.html

27

Blockchain Genomics

Jurisdictional regulation prevents

individuals from having access to
their own genetic data

April 8, 2015
Blockchain Explained

http://genomesunzipped.org/2011/03/people-have-a-right-to-access-their-own-genetic-information.php

28

Blockchain Art

April 8, 2015
Blockchain Explained

Rio, Tel Aviv, Hamburg, Barcelona, Seoul, Tokyo, New York

http://bitfilm.com/festival.html

29

Blockchain Art

Fine art paper wallets

April 8, 2015
Blockchain Explained

http://cryptoart.com/

30

Blockchain Art

Cryptographic art

April 8, 2015
Blockchain Explained

https://bitcointalk.org/index.php?topic=98392.0

31

Blockchain Art

Data visualization as art

April 8, 2015
Blockchain Explained

http://fiatleak.com/

32

Blockchain Art

Data visualization as art

April 8, 2015
Blockchain Explained

http://www.quora.com/What-are-some-of-the-best-Bitcoin-visualizations

33

Blockchain Literacy

Bitcoin MOOCs, Kiva for literacy

Literacy beyond reading

Technical, Agricultural, Vocational Literacy

Blockchain-based personal development

contracts

Peer-to-peer learning contracts

QS-biometric utility function imputation and tracking

Maslow chains, subjectivation and actualization chains

Development Economics 2.0

Literacy contracts, remittances, blockchain-tracked aid,

microcredit, decentralized credit bureaus
Open-source FICO scores
Peer-vouched reputation

April 8, 2015
Blockchain Explained

34

Summary: The blockchain is

A decentralized public transaction ledger

A currency, finance, economic, smart property system
An enabler of the M2M/IOT machine economy
A registry, listing, and management system for all of the
worlds assets, smart property, and itemizable quanta
A societys public records repository, a representative and
participatory legal and governance system
A tool for science, health, literacy, and art applications
A new form of information technology, a decentralized
system of checks and balances, an infrastructure, an
organizing system that is universal and planetary-scale

April 8, 2015
Blockchain Explained

http://www.melanieswan.com/documents/BlockchainThinking_SWAN.pdf

35

Conclusion
Blockchain technology, cryptocurrencies, and smart
contracts are truly a new kind of thingtechnically,
conceptually, structurally, and sociallywith
tremendous potential to decentralize and transform
the manner in which we conduct all activityto
realize futures that are more efficient and
participative, scalable at a planetary level, and
enhancing of core values such as liberty, equality,
and innovation

April 8, 2015
Blockchain Explained

http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491

36

Bitcoin and Blockchain Explained:

Not just Cryptocurrencies, Economics, and Markets;
Applications in Art, Health, and Literacy

Thank You! Questions?

UC Berkeley, Berkeley CA, April 8, 2015

Slides: http://slideshare.net/LaBlogga

Melanie Swan
melanie@BlockchainStudies.org
www.BlockchainStudies.org