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Bitcoin and Blockchain Explained:

Not just Cryptocurrencies, Economics, and Markets;

Applications in Art, Health, and Literacy

Melanie Swan
UC Berkeley, Berkeley CA, April 8, 2015
Slides: http://slideshare.net/LaBlogga
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, New Vision

Science, Arts Background

April 8, 2015 Source: http://melanieswan.com/publications.htm

Blockchain Explained
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 http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491
Blockchain Explained
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
long-standing 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 Satoshi Nakamotos original design for the blockchain (2008) https://bitcoin.org/bitcoin.pdf
Blockchain Explained
How does Bitcoin work?
1. Download software wallet app
Blockchain.info, Mycelium, etc.
2. Transfer Bitcoin via QR Code / public key address
3. See your transaction confirm, post to the blockchain

April 8, 2015
Blockchain Explained
Where can I use Bitcoin?

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

April 8, 2015
Blockchain Explained
How big is the market and is it liquid?

April 8, 2015 https://coinmarketcap.com/

Blockchain Explained
Bitcoin Price Chart (one year)
Price ~stable around $250/1 Bitcoin so far in 2015

April 8, 2015 https://blockchain.info/charts/market-price

Blockchain Explained
Bitcoin Transaction Volume Chart (one year)
Persistent transaction volume despite price volatility

April 8, 2015 https://blockchain.info/charts/estimated-transaction-volume-usd

Blockchain Explained
What is the blockchain?
The open-source software upon which
Bitcoin runs
A technology protocol layer like TCP/IP
A transaction database, decentralized
public ledger of all transactions
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

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

April 8, 2015
Blockchain Explained
How robust is the network?
6441 Global Nodes running full Bitcoind (April 2015)

April 8, 2015
Blockchain Explained
Economic and privacy arguments for Bitcoin
Banking services market
5 bn individuals worldwide without access
to banking, financial, credit services
Remittances market
$4 tn global market, 5-30% transaction
fee; immediate funds transfer solution
Vendor payments market
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
Financial and Public Records Applications
Financial instruments Public Records
1. Currency 1. Land titles
2. Private equities 2. Vehicle registries
3. Public equities 3. Business incorporations
4. Bonds 4. Criminal records
5. Derivatives commodities 5. Passports
6. Spending records 6. Birth certificates
7. Trading records 7. Death certificates
8. Mortgage/loan records 8. Voter Registration
9. Servicing records 9. Voting Records
10. Crowdfunding 10. Health/safety inspections
11. Microfinance 11. Building permits
12. Proxy fights 12. Court records
April 8, 2015 http://forum.ethereum.org/discussion/1402/how-to-get-started-your-first-dapp-under-one-hour
Blockchain Explained
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 https://openbazaar.org/, http://www.edgelogic.net/blocktrace

Blockchain Explained
What are Smart Contracts?
Agreements between parties posted to the
blockchain for automated execution
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
April 8, 2015 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, 16
Blockchain Explained http://financialcryptography.com/mt/archives/001555.html
Decentralized Application (Dapp) Ecosystem
Project Name and Activity Centralized
URL Equivalent
OpenBazaar Buy/sell items locally Craigslist
LaZooz On-demand ride service Uber, Lyft
Twister Social networking, peer-to-peer Twitter, Facebook
http://twister.net.co microblogging
Gems Social networking, private token- Twitter, SMS apps
http://getgems.org based social messaging
Bitmessage Secure messaging (individual or SMS services
https://bitmessage.org broadcast)
Storj File storage Dropbox, Google Drive
Onename Digital identity verification VeriFone, Verisign, Facebook

April 8, 2015 http://www.amazon.com/Bitcoin-Blueprint-New-World-Currency/dp/1491920491

Blockchain Explained
Economic Principles: not just for Economics

Economic Principles

Traditional Deployment Blockchain Deployment

Markets Any interaction is a discovery
and exchange process
Abundance mindset and
overcoming scarcity
Blockchain technology is
Decentralized models
prompting us to rethink
supplement hierarchy
economic principles in markets,
and apply them much more Demurrage incitatory potential
extensibly to other situations in and resource redistribution
a non-monetary sense across network nodes
Reciprocal mining communities
April 8, 2015
Blockchain Explained
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 Smarthome IOT and
personal health assistants Personal Robotics
Blockchains: economic principle-driven
large-scale resource allocation and
coordination mechanisms
Smartcity Connected
Car Coordination

April 8, 2015 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 19
Blockchain Explained
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 http://www.forbes.com/sites/andygreenberg/2010/12/07/visa-mastercard-move-to-choke-wikileaks/

Blockchain Explained
Blockchain Government
Opt-in Personalized Government
Composting vs education
Reputation-based ID system, voting,
dispute resolution, national income
distribution, public documents
registration and repository
Self-directed community bonds
Crowdsourced legal services, justice
entrepreneurs, blockchain arbitration Worlds First Blockchain Marriage:
David Mondrus and Joyce Bayo, October
Sidekik 5, 2014, Disney World FL, Coins in the
Kingdom Bitcoin Conference, Jeffrey
Tucker (Liberty.me) presiding
On-demand tele-attorney, private police
April 8, 2015 http://www.bitnation.co/, https://bitcoinmagazine.com/17066/first-blockchain-wedding-2/,
https://bitcoinmagazine.com/19813/sidekik-decentralized-video-streaming-storage/ 21
Blockchain Explained
Blockchain Representation and Voting
Futarchy, two-step program
1. Traditional vote on outcomes (ex: GDP)
2. Prediction markets to determine specific
proposals for achieving the outcome
Delegative democracy (Liquid Democracy)
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 https://bitcoinmagazine.com/17066/first-blockchain-wedding-2/,

http://www.bitnation-blog.com/latest-update-dec-22nd-2014/ 22
Blockchain Explained
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 http://www.proofofexistence.com/

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

Blockchain Explained
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

April 8, 2015 http://www.righto.com/2014/02/bitcoin-mining-hard-way-algorithms.html,

http://codinginmysleep.com/bitcoin-mining-in-plain-english/ 25
Blockchain Explained
Blockchain Health
Blockchain technology in health-related applications
1. EMRs: Personal Health Record Storage and Access
Personal health records stored and administered via blockchain
Users key-permission doctors and other parties into records
2. Health Research Commons
Aggregated personal medical records, quantified self data
commons (DNA.bits), genome and connectome files
3. Health Document Notary Services
Proof-of-insurance, test results, prescriptions, status, condition,
treatment, physician referrals
4. Doctor Vendor RFP Services
(Like Uber drivers) doctors and health practices bid to supply
medical services; automated bidding via tradenets
April 8, 2015 http://futurememes.blogspot.fr/2014/09/blockchain-health-remunerative-health.html
Blockchain Explained
Blockchain Genomics
Jurisdictional regulation prevents
individuals from having access to
their own genetic data

April 8, 2015 http://genomesunzipped.org/2011/03/people-have-a-right-to-access-their-own-genetic-information.php

Blockchain Explained
Blockchain Art Rio, Tel Aviv, Hamburg, Barcelona, Seoul, Tokyo, New York

April 8, 2015 http://bitfilm.com/festival.html

Blockchain Explained
Blockchain Art
Fine art paper wallets

April 8, 2015 http://cryptoart.com/

Blockchain Explained
Blockchain Art
Cryptographic art

April 8, 2015 https://bitcointalk.org/index.php?topic=98392.0

Blockchain Explained
Blockchain Art
Data visualization as art

April 8, 2015 http://fiatleak.com/

Blockchain Explained
Blockchain Art
Data visualization as art

April 8, 2015 http://www.quora.com/What-are-some-of-the-best-Bitcoin-visualizations

Blockchain Explained
Blockchain Literacy
Bitcoin MOOCs, Kiva for literacy
Peer-to-peer learning contracts
Literacy beyond reading
Technical, Agricultural, Vocational Literacy
Blockchain-based personal development
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
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 http://www.melanieswan.com/documents/BlockchainThinking_SWAN.pdf

Blockchain Explained

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

Blockchain Explained
Bitcoin and Blockchain Explained:
Not just Cryptocurrencies, Economics, and Markets;
Applications in Art, Health, and Literacy

Thank You! Questions?

Melanie Swan
UC Berkeley, Berkeley CA, April 8, 2015
Slides: http://slideshare.net/LaBlogga