Making Blockchain Happen

Making Blockchain Happen

November 2019 Robert M. Learney, Lead Technologist – Blockchain & DLT [email protected] Introduction to Digital Catapult

Unique position – vendor-neutral technology & innovation specialists

ACCELERATORS Introduction to Digital Catapult

Advanced Digital Technologies – we work across 4 technology areas which have maximum economic impact potential

Future Networks Immersive Distributed Systems

– 5G – VR & AR & Mixed – Artificial Intelligence – DLT – IoT (LoRa & Sigfox) – Haptics – – Blockchain Introduction to Digital Catapult

Industry Focus – Remit is to focus on two broad industry sectors with the greatest growth potential for the UK economy

Manufacturing Creative

Increasing the number of trailblazer companies Delivering advanced digital research, working with advanced digital technologies in development and innovation for the UK’s the UK manufacturing sector world-leading creative sector Introducing DLT

Why use Distributed Ledger Technology? Why DLT?

§ Why DLT?

§ Why DLT?

§ Why DLT?

§ Why DLT?

This is a Tragedy of the Commons Why DLT?

3

4

§ 1

6 Why DLT?

What is Distributed Ledger Technology? Introducing DLT Introducing DLT Introducing DLT Introducing DLT Introducing DLT Introducing DLT Introducing DLT

Key Features of DLT: - High availability - Synchronised records - Secure against intrusion - Cryptographic keys - Impossible to alter history DLT Anatomy

Synchronised Distributed DLT Consensus Copies Protocol

P2P Message Cryptographic Passing Signatures State of the Market

Market Research – understanding the state of the UK DLT landscape

Connections Programmes

Connect to the key up-and-coming players Design and deliver new programmes to in this new field to understand their enable true DLT-based digital transformation products, concerns, and barriers to growth across our two target industries State of the Market

https://www.digicatapult.org.uk/news-and-views/publication/blockchain-in-action-state-of-the-uk-market/ State of the Market

3 month process 267 companies identified 45 detailed interviews

• Stage of development

• Stage of investment

• Types of offerings

• Current concerns UK DLT Subsectors

Service Providers (37%)

Centralised Applications (15%) dApp Developers (35%)

Blockchain Builders (13%) Stage of Development

Most DLT companies in the UK are still growing

But half have more than 10 employees

And 10% have more than 50 Types of Offerings

Non-Specific

Finance 75% of DLT companies Technology have products ready to Transport demonstrate Creative But most work still comes Healthcare from the financial sector Agriculture

Manufacturing Charity

None Yet

0 5 10 15 20 Number of Companies State of the Market

We have evidence of massive investment, a massive local talent pool, and a desire for breakthrough digital innovation

But little engagement with DLT outside the financial sector

Supply Chains Item Provenance Rewarding Creators Securing our Future

- Turning supply chains - Ensuring food safety - Tracking IP rights and - Managed data access for into robust networks - Achieving sustainability usage the AI-enabled economy - Improving trust and goals - Securing critical national timeliness infrastructure The Business of Blockchain

The Business of Blockchain DLT Business Models Mobilising Stakeholders

Company 1 Company 2 Company 3

Process Process Process

Data Data Data

Comms Comms Comms Mobilising Stakeholders

Company 1 Company 2 Company 3

Process Process Process

Data Data Data

Shared Communication Network (Internet) Mobilising Stakeholders

Company 1 Company 2 Company 3

Process Alignment

Common Data Environment

Shared Communication Network (Internet) Blockers to Transformation

? Businesses Blockers to Transformation ● Technical complexity ● Regulatory uncertainty ● No governance models ● No proven value props ● Can’t map mutual benefits ● Inertia of “business as usual” Developers ● Nobody gets fired for playing ● Tech instability it safe ● “Dreamers” facing reality ● Uncertain business models ! ● Unable to engage with traditional industry ● Unable to mobilise multiple stakeholders simultaneously Blockers to Transformation

Demand-side Problem Technical Complexity

Technical Complexity Technical Complexity

ethereum Technical Complexity

ethereum DLT Technical Stack

Users

dApps

Virtual Machine

Consensus Protocol

Database

Network Layer DLT Technical Stack

Users

dApps

Virtual Machine

Consensus Protocol

Database

Network Layer DLT vs. Blockchain

Other Parties PBFT Lamport- Known Liskov RAFT etc.

Consensus Blockchain Nakamoto DAG Unknown

Metastable Avalanche DLT Technical Stack

Users

dApps

Virtual Machine

Consensus Protocol

Database

Network Layer DLT Process Stack

Law Identity

Digitised Objects

Transfer Rules

Payment Rail

Consensus Protocol Mobilising Stakeholders

Mobilising Stakeholders We are here

Diffusion of Innovation

We are still here Mobilising Stakeholders Mobilising Stakeholders

Shared Future Pioneers DLT Business Models

Business Models in Blockchain DLT Business Models

What are you selling? Well…hmm…blockchain?

Why are you selling it? To make money and/or change the world

Who wants to buy it? How rude – we have a customer!

Why should they buy it? Because it will save them money

Product? Service? Experience?

- Full-stack blockchain - Development consultancies - 'Cloud’ blockchain - dApps - Crypto exchanges - Data lakes Value Propositions

Value Propositions for Blockchain Value Propositions Value Propositions DLT Field Labs

Finding a way forward

• Collaboration from the outset • Diverse stakeholders • Tap into local talent • Neutral coordinator DLT Field Labs

Problem Definition

Sense Checking

Deploying Solutions DLT Field Labs DLT Field Labs

First 3 DLT Field Labs – industry, university, legal, and innovative DLT companies already engaged in discussions

Oil & Gas Construction Nuclear Industry

Improving supply chains and Reducing the costs and risks in Tracking hazardous waste worker certification in this major complex multi-stakeholder disposal and storage sector projects Weather Compensation Example Construction Field Lab Construction Field Lab Weather Compensation Example Weather Compensation Example

1 Weather compensation clauses and conditions identified in standard construction contract Conditions of execution visible to all stakeholders - source of weather data - regularity of updates - parties to be informed - external arbiter - etc. 2 Clauses analysed and converted into smart contract Weather Compensation Example

3 Key stakeholders engaged 4 Simple governance rules No GDPR-sensitive data No sensitive company data Weather Compensation Example

4 Digital weather feed 6 Novel apps and services can communicate with the ledger

5 Events identical for all parties

Weather service API Weather Compensation Example

9 Instant awareness

7 Weather alert recorded 8 Smart contract(s) execute 10 Immediate compensation or dispute Making Blockchain Happen

Thank you

Robert M. Learney, Lead Technologist – Blockchain & DLT

Digital Catapult 101 Euston Road London, NW1 2RA 0300 1233 101

[email protected]