Financial Future - A Blockchain Technology and Digital Currency Overview

Financial Future: A
Blockchain Technology
and Digital Currency
Overview
Tommy Hutomo, 17 Apr 2021
D3 - Universitas Indonesia S1 - UIN Jakarta S2 - Univesitas Budi Luhur
2006 2009 2012

Tommy Hutomo
2005 2014 2015 2021

Start Career Managerial Migrate to Malaysia IBM Malaysia
Junior Programmer Project Manager Senior Consultant Expert Lab – Advisory
Consultant
Tentang saya
Tommy Hutomo - Financial Future: A Blockchain Technology and Digital Currency Overview. 17 Apr 2021
Kenapa saya harus perduli?
Segment
Linux
Blockchain & Blockchain Foundation -
Crypocurrency Network Hyper Ledger
Blockchain & cryptocurrencyn Blockchain Network Linux Foundation - Hyper

&
• What is Blockchain? • Consensus Algorithm ledger
• Why Blockchain? • - Proof of works Introduction
• When/who was invented • Smart Contract
Blockchain? • Private Blockchain
• How Blockchain works?
- Ledger
50% 40% 10%

- Digital Signature
- The Unique ID
- etc
Blockchain and Digital Currency
What is Blockchain?
A blockchain is a digital, public ledger that records online transactions. Blockchain is the core
technology for cryptocurrencies like bitcoin. A blockchain ensures the integrity of a cryptocurrency by
encrypting, validating, and permanently recording transactions. A blockchain is similar to a bank’s
ledger, but open and accessible to everyone who utilizes the cryptocurrency is supports.
https://www.bankrate.com/glossary/b/blockchain/
Distributed ledger
technology
underlying the
explosion of digital
currencies
A set of protocols
and encryption
technologies for
securing data on a
distributed network
Culture & community
Author
Blockchain = protocol(encryption, data) + distribution
Why Blockchain?
Financial Sector challanges

• Repeated crisis and instability
• Clearing & settlement cost & counterparty risk
• Central bank legecy payment system
• Financial inclusion
MIT, Jan 23, 2020, Prof. Gary Gensler
https://www.youtube.com/watch?v=EH6vE97qIP4
The Blockchain catalyst for change

https://voxeu.org/article/blockchain-catalyst-change
?
Lucre
Ben Laurie.
Bit Gold
Nick Szabo. Bitcoin
Digi Cash Satoshi Nakamoto
David Chaum B Money
Wei Dai.
Blockchain
Stuart Haber & W. Scott
Stornetta
1999
1998 2008
1989 1998
1991
When/who was invented Blockchain?
How Blockchain works?
Ledger
A book or a computer document in which a Simulation:
company's accounts are recorded, Ari
Udin
especially the money it has spent and
received
https://dictionary.cambridge.org/dictionary/english/ledger
Doni Rio
Ledger
Udin Ari
Receiver writes !!!
Rp udin pays ari Rp 10
ari pays doni Rp 5
udin pays doni Rp 5
doni pays rio RP 20
(akhir bulan)
ari pays udin 10
doni pays udin,ari 10
rio pays doni 20
Doni Rio
Ledger
Udin Ari
Receiver writes !!!
Rp udin pays ari Rp 10
ari pays doni Rp 5
udin pays doni Rp 5
doni pays rio RP 20
udin pays ari Rp 30

ari pays doni Rp 5
udin pays doni Rp 5
doni pays rio RP 20
(akhir bulan) (akhir bulan)

ari pays udin 10 ari pays udin 30
doni pays udin,ari 10 doni pays udin,ari 10
rio pays doni 20 rio pays doni 20
Doni Rio
When you sad but still try to be cute
Digital signature
digital code (generated and authenticated by public key encryption) which is attached to an
electronically transmitted document to verify its contents and the sender's identity.
Definitions from Oxford Languages
Udin
Public key
Private key
Ari
Public key
Private key
Digital signature
Udin
Public key + Message = Signature
Private key
Ari
Public key
Private key + Message + Signature = True/False
Digital signature
Udin [ Sign ]
Private key
Ari
Public key [ Verify ]
Digital signature
Udin [ Sign ]
Private key
Ari
Public key [ Verify ]
Author
Sign(Message, pk) = signature
Verify(Message, signature, pubKey) = T/F
Digital signature
Udin Ari
udin pays ari Rp 10 a&^js..
ari pays doni Rp 5 {])-w9..
Rp udin pays doni Rp 5 9)(779..
doni pays rio RP 20 *&hUi..
(akhir bulan)
ari pays udin 10
rio pays doni 20
Doni Rio
Digital signature
Udin Ari
Rp udin pays doni Rp 5 9)(779..
doni pays rio RP 20 *&hUi..

udin pays doni Rp 5 9)(779..
(akhir bulan) doni pays rio RP 20 *&hUi..
ari pays udin 10
rio pays doni 20 (akhir bulan)
ari pays udin 30
rio pays doni 20
Doni Rio
When your friend betray you multiple time
Unique ID
Udin Ari
ax*&.. udin pays ari Rp 10 a&^js..
O8&1.. ari pays doni Rp 5 {])-w9..
Rp _+(I";.. udin pays doni Rp 5 9)(779..
)^KH7i+.. doni pays rio RP 20 *&hUi..
(akhir bulan)
ari pays udin 10
rio pays doni 20
Use timestamp/date transaction

Doni Rio
Unique ID
Udin Ari
ax*&.. udin pays ari Rp 10 a&^js..
O8&1.. ari pays doni Rp 5 {])-w9..
Rp _+(I";.. udin pays doni Rp 5 9)(779..
(akhir bulan)
ari pays udin 10
rio pays doni 20
Doni Rio
be strong, hide the pain
The starting amount
8&^&*.. udin put ledger RP 20 a&^js..
#$#456.. ari put ledger RP 20 {])-w9..
>?;'sk.. doni put ledger RP 20 9)(779.. ax*&.. udin pays ari Rp 10 a&^js..
(IKsjis9.. rio put ledger RP 20 *&hUi.. O8&1.. ari pays doni Rp 5 {])-w9..
_+(I";.. udin pays doni Rp 5 9)(779..
8&^&*.. ari put ledger Rp -10 a&^js..

#$#456.. doni put ledger Rp -5 {])-w9..
>?;'sk.. udin put ledger Rp -5 9)(779..
(IKsjis9.. rio put ledger Rp -20 *&hUi..
(akhir bulan) > Balance not accepted

ari pays udin 10
rio pays doni 20
Need to know running balance

The Block
8&^&*.. udin put ledger RP 20 a&^js..
#$#456.. ari put ledger RP 20 {])-w9.. Protocol
>?;'sk.. doni put ledger RP 20 9)(779.. - Receiver writes
(IKsjis9.. rio put ledger RP 20 *&hUi..
- Digital signature
ax*&.. udin pays ari Rp 10 a&^js.. - Unique iD
O8&1.. ari pays doni Rp 5 {])-w9.. - Starting amount
_+(I";.. udin pays doni Rp 5 9)(779.. - > Balance not accepted
Block - Added, cannot remove/modify
8&^&*.. ari put ledger Rp -10 a&^js..
#$#456.. doni put ledger Rp -5 {])-w9..
>?;'sk.. udin put ledger Rp -5 9)(779..
(IKsjis9.. rio put ledger Rp -20 *&hUi..
ari pays udin 10

rio pays doni 20
The Block
Block
Protocol
- Receiver writes
- Digital signature
.... - Unique iD
- Starting amount
- > Balance not accepted
- Added, cannot remove/modify
Protocol
Distributed ledger
Blockchain No central location, decentralize
Original problem (1991), how to make sure everyone records

the same transaction?
Money vs Digital Currency
Money
Money is any object that is generally accepted as payment for goods and services and the
repayment of debt
https://courses.lumenlearning.com/boundless-economics/chapter/introducing-money/
Assume : Rp 1 = 2 DTC
Money
repayment of debt
8&^&*.. udin put ledger 40 DTC a&^js..
#$#456.. ari put ledger 40 DTC {])-w9.. ax*&.. udin pays ari 20 DTC a&^js..
>?;'sk.. doni put ledger 40 DTC 9)(779.. O8&1.. ari pays doni 10 DTC {])-w9..
(IKsjis9.. rio put ledger 40 DTC *&hUi.. _+(I";.. udin pays doni 10 DTC 9)(779..
)^KH7i+.. doni pays rio 40 DTC *&hUi..
8&^&*.. ari put ledger -20 DTC a&^js..

#$#456.. doni put ledger -10 DTC {])-w9..
>?;'sk.. udin put ledger -10 DTC 9)(779..
(IKsjis9.. rio put ledger -40 DTC *&hUi..
(akhir transaksi)
ari pays udin 20 DTC
doni pays udin,ari 20 DTC
rio pays doni 40 DTC
Money
repayment of debt
8&^&*.. udin put ledger 40 DTC a&^js..
#$#456.. ari put ledger 40 DTC {])-w9.. ax*&.. udin pays ari 20 DTC a&^js..
>?;'sk.. doni put ledger 40 DTC 9)(779.. O8&1.. ari pays doni 10 DTC {])-w9..
(IKsjis9.. rio put ledger 40 DTC *&hUi.. _+(I";.. udin pays doni 10 DTC 9)(779..
8&^&*.. ari put ledger -20 DTC a&^js..
PUBLIC BLOCKCHAIN
#$#456.. doni put ledger -10 DTC {])-w9..
>?;'sk.. udin put ledger -10 DTC 9)(779..
(IKsjis9.. rio put ledger -40 DTC *&hUi..
(akhir transaksi)
ari pays udin 20 DTC
doni pays udin,ari 20 DTC
rio pays doni 40 DTC
Public Blockchain
No need to know so much detail, when you just for use it
Market capitalizations of cryptocurrencies as of January 27, 2018,

https://en.wikipedia.org/wiki/List_of_cryptocurrencies
Author
Ledger – Trust + Cryptography = cryptocurrency
Business context of blockchain
https://courses.cognitiveclass.ai/courses/course-
v1:developerWorks+BC0101EN+v1/courseware/407a9f86565c441
89740699636b4fb85/eeb5c3a61ee64258aedcb7865218ada2/?c
hild=last
Segment
Blockchain Network
Consensus Algorithm
A consensus algorithm is a procedure through which all the peers of the Blockchain network
reach a common agreement about the/ present state of the distributed ledger.
https://www.geeksforgeeks.org/consensus-algorithms-in-blockchain/
• Proof of Work (PoW)
• Proof of Stake
• Practical Byzantine Fault Tolerance
• Proof of Burn
• Proof of Capacity
• Proof of Elapsed Time
Consensus Algorithm
Peer Peer
Peer Peer
Proof of works (POW)
Consensus Algorithm
Peer Peer
Bitcoin mining is the process
by which new bitcoins are
entered into circulation, but it
is also a critical component
of the maintenance and
development of the
blockchain ledger. It is
performed using very
sophisticated computers that
solve extremely complex
computational math
Peer Peer problems.
https://www.investopedia.com/tech/ho
w-does-bitcoin-mining-work/
Miner – everyone can join Proof of works (POW)
Consensus Algorithm
Peer Peer
Peer Peer
New Block
Miner Proof of works (POW)
Consensus Algorithm
Peer Peer
Peer Peer
Consensus Algorithm
Peer Peer
Peer Peer
Consensus Algorithm
Peer Peer
Peer Peer
Consensus Algorithm
[ Protocol ]
Peer Peer
p=start with
10101 {8}
Peer Peer
P=Math Puzzle
Consensus Algorithm
ax*&.. udin pays ari 20 DTC a&^js..
O8&1.. ari pays doni 10 DTC {])-w9..
P =start with 10101{8} _+(I";.. udin pays doni 10 DTC 9)(779..
0000010010010011000111….
Miner
ax*&.. udin pays ari 20 DTC a&^js..
O8&1.. ari pays doni 10 DTC {])-w9..
_+(I";.. udin pays doni 10 DTC 9)(779..
10101[10010010011000111….] 342***&* all pays miner 3 0.1 DTC %**778
^&((**677shs8&&…
^&((**677shs8&&…
Consensus Algorithm
[ Protocol ]
Peer Peer
p=start with
10101 {8}
Peer Peer
Consensus Algorithm
Peer Peer
Peer Peer
+ 0.01 BTC
Consensus Algorithm
Genesis Block
Smart contract
Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They
typically are used to automate the execution of an agreement so that all participants can be immediately certain of
the outcome, without any intermediary’s involvement or time loss.
https://www.ibm.com/topics/smart-contracts
Author : Smart Contract = lawyer
Initiator Other Peer (received)
New Block New Block

1. Execute Smart Contract
Smart Contract Smart Contract 2. Add to existing block chain
POW
Mostly used in Private blockchain

Smart contract can be initiated by :
- transaction initiator
- regulator
Author
Smart Contract = lawyer
Smart contract
Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They
typically are used to automate the execution of an agreement so that all participants can be immediately certain of
the outcome, without any intermediary’s involvement or time loss.
https://www.ibm.com/topics/smart-contracts
New Block
Smart Contract
Private Blockchain
Peer Peer
Peer Peer
Miner – everyone can join
Private Blockchain
Peer Peer
Peer Peer
Company server
Government Central bank, Ex BI
Private Blockchain
Society for Worldwide Interbank Financial

Telecommunication
Blockchain Network
Sample private Blockchain solution by IBM
v1:developerWorks+BC0101EN+v1/courseware/76d637cbe8024e5
09dc445df847e6c3a/2d204ac4fa3143048a998da7e53702d7/?a
ctivate_block_id=block-
v1%3AdeveloperWorks%2BBC0101EN%2Bv1%2Btype%40sequenti
al%2Bblock%402d204ac4fa3143048a998da7e53702d7
Segment
Linux Foundation
Hyperledger
https://www.hyperledger.org/
Hyperledger is an umbrella project of open

source blockchains and related tools, started in
December 2015 by the Linux Foundation, and
has received contributions from IBM, Intel and
SAP Ariba, to support the collaborative
development of blockchain-based distributed
ledgers
Visual Studio Code + IBM Blockchain Platform Extension
Linux Foundation - Hyperledger
How IBM can help
v1:developerWorks+BC0101EN+v1/courseware/76d637cbe8024e5
09dc445df847e6c3a/2d204ac4fa3143048a998da7e53702d7/?a
ctivate_block_id=block-
v1%3AdeveloperWorks%2BBC0101EN%2Bv1%2Btype%40sequenti
al%2Bblock%402d204ac4fa3143048a998da7e53702d7
What Next ?
The Exam
Duration : 60 Minutes
Type : Multiple choice
Failed : Able to retry next day
Max Failed : 2 Times
What Next ?
“Dan tiadalah kehidupan dunia ini, selain dari
main-main dan senda gurau belaka. Dan sungguh
kampung akhirat itu lebih baik bagi orang-orang
yang bertakwa. Maka tidakkah kamu
memahaminya?”
- QS. AL-'AN`AM [6] : 32

Q&A
Financial Future: A Blockchain Technology and Digital Currency Overview. 17 Apr 2021
Contact Me:
Linked-in :
https://www.linkedin.com/in/tommy-hutomo-41246b189/
Email:
tommy.hutomo30@gmail.com
Financial Future: A Blockchain Technology and Digital Currency Overview. 17 Apr 2021

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Financial Future: A

2006 2009 2012

2005 2014 2015 2021

Blockchain & cryptocurrencyn Blockchain Network Linux Foundation - Hyper

50% 40% 10%

Financial Sector challanges

The Blockchain catalyst for change

udin pays ari Rp 30

(akhir bulan) (akhir bulan)

When you sad but still try to be cute

Public key + Message = Signature

Private key + Message + Signature = True/False

Public key + Message = Signature

Private key + Message + Signature = True/False

Public key + Message = Signature

Private key + Message + Signature = True/False

udin pays ari Rp 10 a&^js..

When your friend betray you multiple time

Use timestamp/date transaction

be strong, hide the pain

8&^&*.. ari put ledger Rp -10 a&^js..

(akhir bulan) > Balance not accepted

Need to know running balance

ari pays udin 10

Original problem (1991), how to make sure everyone records

8&^&*.. ari put ledger -20 DTC a&^js..

8&^&*.. ari put ledger -20 DTC a&^js..

Market capitalizations of cryptocurrencies as of January 27, 2018,

Proof of works (POW)

Miner – everyone can join Proof of works (POW)

Miner Proof of works (POW)

Miner Proof of works (POW)

Miner Proof of works (POW)

Proof of works (POW)

Proof of works (POW)

Proof of works (POW)

Proof of works (POW)

Proof of works (POW)

Initiator Other Peer (received)

New Block New Block

Mostly used in Private blockchain

Miner – everyone can join

Society for Worldwide Interbank Financial

Hyperledger is an umbrella project of open

Visual Studio Code + IBM Blockchain Platform Extension

- QS. AL-'AN`AM [6] : 32

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