Blockchain Technology

• Wikipedia – “A distributed database that is used to maintain a continuously

growing list of records, called blocks. Each block contains a timestamp and a
link to a previous block”
 Double spend conundrum

• Double-spending is the result of successfully spending digital money more than once

• Blockchain for bitcoin made it the first digital currency to solve the double spending
problem without requiring a trusted administrator

• Protects against double spending by verifying each transaction added and ensuring that
the inputs for the transaction had not previously already been spent

• Uses a decentralized system, where a consensus among nodes following the same protocol
is substituted for a central authority
 Characteristics of blockchain

• Information held on a blockchain exists as a shared — and continually reconciled —

distributed database

• The blockchain database isn’t stored in any single location, meaning the records it
keeps are truly public and easily verifiable

• No centralized version of this information exists for a hacker to corrupt

• Hosted by millions of computers simultaneously, its data is accessible to anyone on the

internet
 Characteristics of blockchain

• Decentralized nature prevents control by a single entity

• Transactions are immutable (unable to be changed) and exist forever

• The blockchain network lives in a state of consensus, one that automatically checks in with itself every ten minutes
(new block creation)

• Eliminate third party intermediaries/overhead costs to reduce transaction fees, in addition to settling transactions
24/7
 How is the network powered? (Nodes)

•Node – A computer connected to the blockchain network using a client that

performs the task of validating and relaying transactions) gets a copy of the
blockchain, which gets downloaded automatically upon joining the blockchain
network

•Every node is an “administrator” of the blockchain, and joins the network

voluntarily (in this sense, the network is decentralized)
 Why host a node?

• Incentive - the chance of winning cryptocurrency (proof of work)

• Nodes are said to be “mining” by solving computational puzzles and adding transaction records
to the blockchain (fees)

• Smart way to issue the currency (decentralized) and creates an incentive for more people to mine

• Nodes use the blockchain to distinguish legitimate transactions from attempts to re-spend coins
that have already been spent elsewhere
Bitcoin has been useful as a digital currency, but
merely stands as a one-trick pony. An idea was
envisioned for the blockchain to provide
functionality far beyond currency.

Enter Ethereum and Smart Contracts

The future
is being
built as we
speak And it is
being built
on
Ethereum
 Build unstoppable applications

•Ethereum is a decentralized platform that runs smart contracts:

applications that run exactly as programmed without any possibility of
downtime, censorship, fraud or third party interference.

•These apps run on a custom built blockchain, an enormously powerful

shared global infrastructure that can move value around and represent
the ownership of property.

•This enables developers to create markets, store registries of debts or

promises, move funds in accordance with instructions given long in the
past (like a will or a futures contract) and many things that have not been
invented yet, all without a middle man or counterparty risk.
 What are smart contracts?
• Computer protocols that facilitate, verify, or enforce the negotiation or
performance of a contract, or that make a contractual clause unnecessary

• Help you exchange money, property, shares, or anything of value in a

transparent, conflict-free way, while avoiding the services of a middleman

• Define the rules and penalties around an agreement in the same way that a
traditional contract does, but also automatically enforce those obligations
(code is law)
The disconnected nature of un-trusted systems
manifests itself in the time required to fully close
out transactions

21
 With blockchains, the future of finance is
embedded in business process everywhere.
Production

Trade Finance

# #

Distributor

Customs Shipping

# #

Insurance
22
And in every smart thing and industrial asset.

23
Now you have a platform with applications that run exactly as programmed
without any possibility of downtime, censorship, fraud or third party
interference capable of executing smart contracts.

What do we do next?

Let’s check out some DAPPS.

Etheroll – Provably fair dice game (investors act as the house)
IoT Markets
Machines can be customers in machine-to-machine markets. Utilities, data storage, data usage, XaaS services,
and APIs are all services that usually offer rate limits or subscription models because charging on a per-use basis is
infeasible. With µRaiden, per-use charging finally becomes possible.

Pay-per-Use
Micropayments are becoming an increasingly attractive alternative to intrusive advertisement
and subscription walls. µRaiden gives users the option to decide on a pay-per-use basis
whether they would rather endure ads or pay for a premium experience. Customers would not
need to engage in the commitment of a monthly subscription model.
 Singapore Central Bank Reveals 3 New Blockchain Payments Prototypes

The White House and Equifax Agree: Social Security Numbers Should Go

Ethereum’s Founder Struck a Deal with a Russian Bank to Create ‘Ethereum Russia’

United Nations Sends Aid to 10,000 Syrian Refugees Using Ethereum Blockchain

Microsoft Adds JPMorgan’s 'Quorum' Blockchain to Azure Platform

Ethereum Enterprise Alliance Adds 86 New Including DTCC, State

Street And InfosysMembers
Use Cases
 Why AEP?
• Green energy credits

• Electric charging stations

• Smart contract solutions to guarantee uptime

• Retail based solutions to reduce costs

 AEP ECO-Advantage

• As an environmentally-friendly alternative to traditional electricity plans, we

offer ECO-Advantage℠, which matches 100% of your electricity usage with
national Green-e® Energy certified, wind Renewable Energy Certificates
(RECs)

• Match 100% of your usage with national Green-e Energy certified wind RECs

• Same electricity service, one monthly bill from your local utility, no
interruption of service or installation of additional equipment
 Green energy

FERC
Green credits
tokenized as
credits
cryptocurrency deducted

Green energy
credits
created
 Germany’s Energy Giant Launches
100s of Ethereum Based Electric Cars
Charging Stations

“By using a computer chip in the charging station, a smartphone app

to communicate with the interface, and a blockchain to manage and
record all of the payment and charging data, a fully automated,
worldwide authentication, charging and billing solution with no
middleman is created.”

“Tomorrow 100s of EV Charging Assets all

over Germany Blockchainified. E2E Product
using asset-backed Crypto-EURO for
payments,” before adding “our EV
Charging assets will be on public ethereum
blockchain and further assets across EU
connected soon.”
 Download
Register car

Costs transferred from

Share&Charge to station owner

Deposit fiat
 Smart contract based trading solutions

• Turbine is powered off at AEP plant,

causing an energy shortage

• Traders determine pricing for power

and shortage is covered

When the outage event

• Instead, use smart contracts to define occurs, the smart contract
pricing before an outage event executes with the agreed
upon terms
• In a deregulated market, electricity retailers buy electricity at wholesale price (in 1 MWh increments) and then
package and sell that electricity directly to consumers

• Retailers are not responsible for powering customers directly, but are responsible for metering and billing usage

• In addition to paying for generation, transmission, and distribution, end users also pay fees to their retailer

• These costs are largely comprised of marketing, administration, and managing risk/compliance for bad debts and
customer funds

• This can (and often does) add up to quite a large percentage, as shown by the average price of electricity in various
states in the following graph:
• Grid+ is not interested in managing user funds or in settling bad debts

• Users prepay each month in dollars, which is tokenized on Ethereum as a dollar-backed

stable coin

• As a retailer, they have access to customers’ usage data, which gets updated every 15
minutes

• Every 15 minutes they query a customer’s agent (which can be any device capable of
making ECDSA signatures) for payment

• The agent signs a message sending a small amount of money over a state channel and
Grid+ takes a small fee from that transaction as a form of revenue
 gridSMART and AEP Energy Credits

• Tokenize user funds as a dollar backed stable coin

Credits

• Customers pre-pay or link bank account to convert USD to AEP energy credits

• gridSMART reads customer data every 15 minutes, deducting energy credits from customer wallets

• Users are able to monitor their energy usage in 15 minute increments, allowing greater visibility of energy usage

• AEP is insulated from bad debts and high-risk users through pre-pay model

• App teams are able to share data with ease using the distributed database model
Blockchains aren’t for everyone and they aren’t
for every solution. Here is a five point test.
 Traditionally, IT has been regarded as a cost center

Using blockchain, companies will be able to drive profits through technology

 Sources/Credits
• https://dapps.ethercasts.com/

• https://arstechnica.com/information-technology/2016/11/what-is-blockchain/
• https://entethalliance.org
• https://blockgeeks.com/guides/what-is-blockchain-technology/
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• https://www.youtube.com/watch?v=8moxZOwd39M &ved=0ahUKEwj105nFs8rUAhWV8oMKHbnGCHkQ_AUICCgD&biw=1600&bih=834#imgrc=qwRQQT1lSzC
MEM
• https://firstblood.io/ :

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hWV8oMKHbnGCHkQ_AUICCgD&biw=1600&bih=834#safe=strict&tbm=isch&q=power+outage&imgrc
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s-charging-stations
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%253BFWG01NM2Qz8wvM%253Bhttp%25253A%25252F%25252Fwww.clker.com%25252Fclipart-dark-
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EwjByrWBr8rUAhWqzIMKHbHYADAQ_AUICCgD&biw=1600&bih=834#imgrc=S7_AbQpCkOgQeM %252C_&usg=__Hrlt85cnfZqcPHwOSC7mZN7BoDw
: %3D&biw=1600&bih=834&ved=0ahUKEwiVnLOatsrUAhWB2YMKHYAnBdAQyjcILw&ei=eQhIWdX7EY
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• etheroll.com
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• https://storj.io/

• https://en.wikipedia.org/wiki/Blockchain#History
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9i60l3j0.3207j0j7&sourceid=chrome&ie=UTF-8
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AUIDCgD&biw=1600&bih=794#imgrc=FIhBkP6kSCPinM:
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• https://www.weusecoins.com/images/augur1.jpg
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%3AIcarus_Bitcoin_Mining_rig.jpg&psig=AFQjCNHYozE-
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• http://bankinnovation.net/2016/12/learning-to-fly-with-the-internet-of-value/ • http://ir.nasdaq.com/releasedetail.cfm?releaseid=948326

• https://cdn.static-economist.com/sites/default/files/images/2017/06/articles/main/20170610_ldp501.jpg

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