Block Chain Presentation-1

Innovation and Blockchain
concepts
Introduction to the class
 Expectation setting
 Introduction of the students
 Course outline walk through
 Explain the evaluation components
 Group creation
Evaluation components
 Project-1 – 30 %
 End term – 30 %
 Quiz – 20 %
 project-2 – 20%
What is Innovation?
“Innovation is the process of creating
value by applying novel solutions to
meaningful problems.”
Types of Innovations
 Product Innovation
 Process Innovation
 Business model Innovation
Product Innovation
A new feature to an existing product – ability to watch
programs through internet for TVs
 Animprovement of the performance of the existing product,
such as an increase in the digital camera resolution of the
Mobile phones.
Process Innovation
 Process is the combination of facilities, skills, and technologies
used to produce, deliver, and support a product or provide a
service. Within these broad categories, there are countless ways
process can improve.
 Process innovation can include
 changes in the equipment and technology used in manufacturing
(including the software used in product design and development)
 improvement in the tools, techniques, and software solutions used to
help in supply chain and delivery system
 changes in the tools used to sell and maintain your goods, as well as
methods used for accounting and customer service.
Business Model Innovation
 The primary goal of business model innovation is to
realize new revenue sources by improving product
value and how products are delivered to customers.
 Business model innovation is
The development of new, unique concepts supporting
an organization's financial viability, including its
mission, and the processes for bringing those concepts
to fruition.
 Soit is a combination of product and process
innovations
Examples of business model innovation
 Brick and mortar Vs. E-commerce
 Traditional banking Vs Internet Banking
 automobiles– selling to leasing of cars
 Defence .. For eg. Russia is now selling
the products with an option to
manufacture them in the country where
it is being sold
Class exercise – 3 business model innovations
(product+process innovations) in multiple domains
 Insurance –gr-1
 Manufacturing – gr-2
 Health care – gr-3
 Banking-gr-4
 Retail-gr-5
 Pharmaceutical-gr-6
 Defence – gr-7
TECHNOLOGICAL INNOVATION
Video on Innovation
https://www.youtube.com/watch?v=UR83B1UuzCY
What is a Blockchain
A blockchain is a peer-to-peer distributed
ledger that is cryptographically secure,
append-only, immutable, and updatable only
via consensus or agreement among peers.
Blockchain in a nutshell
Append-only system of Ensuring secure,

record shared across authenticated & verifiable
business network transactions
Shared Ledger Cryptography
Shared
Consensus Business terms embedded
All parties agree to Contract in transaction database &
network verified executed with
transaction transactions
Broader participation, lower cost, increased efficiency

Why Block chains - Business Networks,
Markets & Wealth
 Businesses don’t exist in isolation
 Connected to customers, suppliers,
banks, partners etc. through Business
Network
 Networks cross geography & regulatory
boundary
 Wealth is sum total of value of goods &
services across business network
 Growth would be constrained if silo’d
or inefficient
 Flow goods & services across business
network is a Market
 OPEN (fruit market, outcry
commodities, or
 CLOSED (supply chain financing, bonds)
Block chain concepts
Consensus:
• A transaction is only committed when all parties agree to a network verified transaction
Provenance:
• The entire history of an asset is available over a blockchain
Immutability:
• Records are indelible and cannot be tampered with once committed to the shared ledger,
thereby making all information trustworthy
Finality:
• Once a transaction is completed over a blockchain, it can never be reverted
Shared ledger:
• It is an append-only distributed system shared across the business network, which makes the
system resilient by eliminating a ‘single point of failure’
Smart contracts:
• Code is built within a blockchain that computers/nodes execute based on a triggering event.
Essentially, an ‘if this then that’ statement which can be auto-executed
Types of Block chains
 A blockchain network can either be public or private based on who is authorized
to participate.
 The Public block chain operates in a decentralized open environment where there
are no restrictions on the number of people joining the network
 Private Block chain operates within the confines defined by a controlling entity.
Participants, Transactions & Contracts
 A participant is a member of a business
network
 Customer, Supplier, Government, Regulator
 Usually reside in an organization
 Have specific identities and roles
 A transaction is an asset transfer between two
or more participants, for example
 John gives a car to Anthony (simple) $
 John gives a car to Anthony, Anthony gives
money to John (more complex)
 A contract is set of conditions under which
transactions occur, for example
 If Anthony pays John money, then car passes
from John to Anthony (simple)
 If car won't start, funds do not pass to John (as
decided by independent third party arbitrator)
How does a Block chain work
Essential prerequisites for a block chain
Multiple parties share data Intermediaries add complexity.

1 Multiple parties need a 4 Removal of dependency on
common view of the intermediaries can
information reduce cost and complexity.
at hand.
Interactions are time sensitive
2
Multiple parties update data
Multiple participants take actions
that change the data, which
5 Reducing delay has a business
benefit.
needs to be recorded.
Requirement for verification Transactions interact

3 Participants need to trust that the 6 Transactions generated by different
actions that are recorded are valid. participants interact with each other.

Blockchain as a solution
If the first condition is correct and three out of the remaining are considered correct then blockchain
may be an effective solution to the problem.
Videos on block chain
• What is BLOCKCHAIN_ The best explanation of blockchain technology – 1

• IBM Blockchain Car Lease Demo – 2
• .. After this class exercise for block chain applications
• https://www.youtube.com/watch?v=Ihr0WxZi_Iw – oracle block chain DEMO-end to end
flow – to be shown
• Rover Network - Land Registry Blockchain Solution
• https://www.youtube.com/watch?v=37WaD4iEHCI – Letter of credit by IBM hyperledger-3
• https://www.youtube.com/watch?v=_160oMzblY8&t=1050s – internal mechanism of
blockchain -1 – 4th video
• https://www.youtube.com/watch?v=xIDL_akeras&list=RDCMUCx7YSpyYtgaYik1Wen9jYSA –
private and public keys signing – 5th video
• https://www.youtube.com/watch?v=yubzJw0uiE4 – explain public and private keys
Block chain applications in different domains
 Insurance –gr-1 • To be done as part of assignment
 Manufacturing –
• What is the name of the organization?
• What is the business problem/Issue?
gr-2
• How would block chain technology address this?
 Health care – gr-3 • Whether the company implemented this – in pilot/full scale?
 Banking-gr-4 • What are the challenges faced during the implementation?
• How are the challenges addressed?
 Retail-gr-5 • What is the business value added?
 Pharmaceutical-
gr-6
 Defence – gr-7
 Education – gr-8
Check list for creating Proof of concept(POC)

What is the participating business network?

What is the potential integration with external systems?

Who are the actors and what is their stake in each step of the solution?

What are the business rules associated with each step of the solution?

Who are the network participants that would validate the fulfilment of the business rule for each step?

What are the roles of each network participant on the blockchain?
(as an example, who would participate in consensus and who just hold a copy of the ledger)

What is the actual asset class in play through each step? (An example of an asset class would be a
birth registration form that is automated as a smart contract.)

What is the data being added/appended to the distributed ledger with each step?

What is the extent and type of addition/appendage permissible for each actor through each step?
Transferring Assets, building Value
 Anything that is capable of being owned or

controlled to produce value, is considered an
asset
 can be tangible or intangible
 value can be converted into cash.
 Cash also an asset.
 Asset examples:
 Cars, value clothes (physical)
 Bonds, securities, repurchase agreements
(intangible)
 Licenses & patents (intangible assets)
 Music, video, games (intangible, digital)
Future usecase of block chain and IOT

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Innovation and Blockchain

Append-only system of Ensuring secure,

Broader participation, lower cost, increased efficiency

Multiple parties share data Intermediaries add complexity.

Interactions are time sensitive

Requirement for verification Transactions interact

• What is BLOCKCHAIN_ The best explanation of blockchain technology – 1

 Anything that is capable of being owned or

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