Smart Contract Platforms - mainsummit · Automated, programmable contracts can ensure contract...

Chair of Software Engineering for Business Information Systems (sebis)

Faculty of Informatics

Technische Universität München

wwwmatthes.in.tum.de

Smart Contract PlatformsProf. Dr. Florian Matthes Mainsummit, EIKONA,16.10.2019

1. Relevance of Blockchain-based Systems

2. Implementation of Blockchain-based Systems using a Smart Contract Platform

3. Alternative Approaches to Smart Contract Platforms

4. Governance in Blockchain-Based Systems

Outline

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What is a „Blockchain“?

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“A blockchain […] is a distributed

database that maintains a continuously-

growing list of ordered records called

blocks. Each block contains a timestamp

and a link to a previous block. By design

blockchains are inherently resistant to

modification of the data: once recorded,

the data in a block cannot be altered

retroactively.”https://en.wikipedia.org/wiki/Blockchain_(database)

[...] are systems that enable parties

who don’t fully trust each other to form

and maintain consensus about the

existence, status and evolution of a

set of shared facts.

Richard Brown, R3 CTO

Technical definition Functional description

The potential of blockchain technologies

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They enable intermediary-free transactions of digital, non-copyable goods without the need to trust

the other party.

Digital identities of people or machines can enter into secure transactions and all transaction details

are stored immutable and decentralized.

Automated, programmable contracts can ensure contract compliance.

"We believe that the Blockchain will have the greatest influence on contracts, logistics and supply chain,

healthcare, public administration, asset clearing, property and transactions."

- Greg LaBlanc

Current and future use cases (B2B & B2C)

5

Finance

Replacement of intermediaries in transactions Crypto currencies Microcredit and crowdfunding peer-to-peer ICOs: Start-up financing

Pharma und

Medical

Automotive

Sharing

Economy

Supply chain tracking Digital identity of a car Digital mobility solutions (e.g. car sharing)

Documentation

Elimination of some notary services Traceable supply chain Service & maintenance protocols Digital certificates of origin

Access to decentralized patient records Prevention of prescription abuse Prevention of counterfeit drugs

Transactions without a central platform provider Decentralized documented bartering Pay-as-you-use insurances

Cross-industry, peer to peer

Energy

Private suppliers of electricity Micro power networks Electricity trading

Industries

Digital

Identity

Refugees pay by retina scan Direct remuneration of license holders Certificates of origin of digital certificates

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IP Management

Preservation of patents, art or ideas on the blockchain (incl. time stamp)

Securing 3D printer models Direct remuneration of license holders

Our current projects on blockchain-based systems engineering

Development projects

Chip Card Solutions, DRK: Securing blood products with RFID and Blockchain-technologies

Tr8cy: Peer2Peer Trade financing platform

TUM: Digital university certificates

Research projects

Identity management in open blockchain-based systems

Language engineering for smart contracts (with Noumena Digital AG, Switzerland)

Education and consulting

TUM lecture Blockchain-based Systems Engineering

TUM executive education program DLT and Blockchain Manager

GS1 Cologne: Blockchain governance (pallet exchange platform)

Blockchains for public administrations (Bavarian ministries of justice, finance, social and digitalization)

Blockchain Hackathons (IBM, TUM, Ethereum, …)

Associations

blockchain.tum.de

Blockchain Bayern e.V.

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Applying design thinking to blockchain-based solutions

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People

Benefits

Business

Viability

Technology

Feasibility

Which pain of which

people / businesses

do we solve?

How to solve the

problem?

How to create a sustainable

business?

Functional Innovation

• Digital currency

• Digital token

• Digital wallets

• …

Emotional Innovation

• Trust

• Decentralized

• Democratic

• …

Process Innovation

• Peer 2 Peer

Network

• Decentralized

Governance

• …

Innovative

Solution

Blockchain technologies have a reputation problem

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• Incredible waste of energy and

resources

• Use for shady business models

• Speculative trading

• Gambling

• Trafficking (humans, drugs, …)

• Cyber crime

• Ransomware attacks

• …

• Casino economy

• ICO scams

• Exchange frauds

• “Lost” or “locked” crypto money

• …

• Huge gap between expectations and

maturity of the technology

Interdisciplinary collaboration is required

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People

Benefits

Business

Viability

Technology

Feasibility

Which pain of which

people / businesses

do we solve?

How to solve the

problem?

How to create a sustainable

business?

Law

Compliance

How to ensure

compliance with the law?

1. Relevance of Blockchain-based Systems

2. Implementation of Blockchain-based Systems using a Smart Contract Platform

3. Alternative Approaches to Smart Contract Platforms

4. Governance in Blockchain-Based Systems

Outline

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Historical development of the concept of Smart Contracts

The term “Smart Contract” was coined long before blockchain technology emerged (Szabo, 1994).

Initially described the formalization of processes in public networks like the Internet.

Possible applications:

DRM (Digital Rights Management)

Payment

Connection to the “real world” through sensors and actuators

However, there was a lack of technology to realize these ideas at that time.

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Szabo, Nick (1994): Smart Contracts.

https://web.archive.org/web/19971008001022/http://www.virtualschool.edu/mon/Economics/SmartContracts.html

In 2015, Vitalik Buterin revived the idea in his white paper “Ethereum: A Next Generation Smart Contract &

Decentralized Application Platform“

Idea

Replace the fixed data structures, algorithms and protocols of individual blockchain solutions (e.g. Bitcoin,

voting, bidding, lottery, proof of ownership, …) by programs, written in a domain-specific programming

language (e.g. Solidity) on top of a single public blockchain (Ethereum) and currency (Ether).

Use cryptography to secure the immutability of the program code (contract)

Wallet owners agree on the contract(s) to be used for their future interactions

No or very limited access of the code to the “real world” (sensors, actuators)

Similar to data-centric architectures for workflow management and automated case management

Smart Contracts on blockchain-based platforms

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Smart Contracts

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To be clear, at this point I quite regret adopting the term "smart contracts".

I should have called them something more boring and technical, perhaps something like "persistent scripts".

Vitalik Buterin, 2018

A reference architecture for a Smart Contract platform

Example:

Safe transfusion medicine

Blood product supply chain involving

Clinics

Labs

Logistic companies

Blood donor centers

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Execution

States

Virtual Machine

(Execution platform for Smart Contracts)

Smart

Contracts

Execution

History

Local interactive

User interfacesLocal IT-Systems

Internet

API

Sen-

sors

Actua-

tors

„Real World “

Platform-wide

Rules

1. Relevance of Blockchain-based Systems

2. Implementation of Blockchain-based Systems using a Smart Contract Platform

3. Alternative Approaches to Smart Contract Platforms

4. Governance in Blockchain-Based Systems

Outline

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Implementations of the reference architecture

Centralized platforms

Blockchain-based platforms

Permissionless

platforms

Permissioned platforms

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Advantages

Decentralized management (trust in one party trust in a system of multiple parties)

Transparency of all transactions

Traceability of the complete transaction history

Pseudonymity of the wallet owners

Built-in financial incentives for early adopters and network growth ( business model)

Opportunities

Innovation thrust for IT solutions in the global finance system

Lowered entry barriers for IT-savvy players with limited financial resources

Impetus to re-evaluate established business models and economic mechanisms

Comparison with established centralized solutions

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Centralized platforms

There are established non-technical measures to ensure trust, e.g. cooperatives, third-party (or state) supervision, Open Source licenses, etc.

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Benefits

Efficient

Scalable

Standardized components

Drawbacks

Requires trust in platform

provider

Availability

Sufficient resources

Fair conditions (e.g.

pricing)

No manipulations

Permissionless Blockchain-based platforms

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Benefits

Consensus of nodes on

shared set of facts

Traceability of the complete

transaction history

Optimized for cross-

organization collaboration

Decentralized and redundant

(Transparency of all

transaction details)

Pseudonymity of the wallet

owners

Financial incentives for

network growth

Drawbacks

Dependency on a crypto

currency

Energy consumption

Severely limited transaction

throughput

Risk of centralization at the

network level

Permissioned Blockchain-based platforms

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Benefits

Consensus of nodes on

shared set of facts

Traceability of the complete

transaction history

Optimized for cross-

organization collaboration

Decentralized and redundant

Upward compatibility with

established IT technologies

Identity management

Development tools

Data models & standards

…

Drawbacks

Interoperability between

different consortia

System complexity

Blockchain governance

Ecosystem / participants

Applications / contracts

Platform technology

1. Relevance of Blockchain-based Systems

2. Implementation of Blockchain-based Systems using a Smart Contract Platform

3. Alternative Approaches to Smart Contract Platforms

4. Governance in Blockchain-Based Systems

Outline

© sebis191016 Matthes Smart Contract Platforms 21

The governance challenge

Centralized platforms today (e.g. Google Maps)

Centralized data

management

Non-transparent platform

operations

Exclusive platform

ownership

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The governance challenge

Decentralized platforms tomorrow?

Decentralized data

management

Transparent platform

operations

Shared platform ownership

Blockchain Governance

Ecosystem

Applications

Infrastructure

!

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Blockchains are a team sport

The parties in the ecosystem interact via shared executable contracts on shared blockchains.

Banking: R3 Consortium (2014)

200+ members

Energy: Energy Web Foundation (1/2018)

Insurance: B3i Consortium (3/2018)

Achmea, Aegon, Ageas, Allianz, Generali, Hanover Re, Liberty Mutual, Munich Re, SCOR, Swiss Re, Tokio Marine, XL Catlin, Zurich Insurance Group

Mobility: Mobi Open Blockchain Initiative (5/2018)

BMW, General Motors, Renault, Ford, Bosch, ZF, …

Connect, Understand, Design, Do, Learn: Blockchain Bayern (9/2019)

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www.blockchain-bayern.de

Blockchain Bayern e.V.

Foundation CeremonySeptember 25th 2019

IHK für München und Oberbayern

We thank our sponsors.

Greetings

Dr. Eberhard Sasse

President

IHK für München und Oberbayern

Greetings

Prof. Dr. Florian Matthes

Maximilian Irlbeck

Application Pitches

Part 1

Joachim Klaus

Allgäuer Überlandwerk

Wir danken unseren Sponsoren.

Lisann JanetzkyCommunity Manager München

31

Page 32BMW GROUP | 2019.

Blockchain Technology has an immense potential across the entire automotive value chain of the BMW GROUP.

SUPPLY CHAIN

& PRODUCTION

VEHICLE,

MOBILITY &

CUSTOMER

TECHNOLOGY

Kilian Eisert | Technische Universität München | Prof. R. Bayer

C-CHAINThe High Performance Blockchain for Secured IoT

Icons made by Freepik and Vectors Market from www.flaticon.com

High Performance

Low Cost

Simple Infrastructure

Perfectly Scalable

Suitable for Lightweight

IoT and Microcontrollers

C-CHAINBLOCKCHAIN

Blockchain

Miners

Consensus (PoW, PoS, PoA)

→Many small Transactions-Chains

→ Certified C-chain Manager

→ One-time static certification

(PoC)

BENEFITS

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Manipulationssicher

© citema systems GmbH · 2019

Der ressourcenschonende Blockchain Hybrid

für die Smart Economy.

Privatheit & DSGVO-Fähigkeit

Hohe Developer- & User-Experience

Sehr hohe Transaktionsgeschwindigkeiten & Volumen

Feingranulares Rechtemanagement

Rainer Keiditsch

Geschäftsführer

citema systems GmbH

Tel: 08106 35603 20

Mobil: 0151 58054 700

Email: rainer.keiditsch@citema.de

www.citema.de www.secchain.de

Ressourcenschonend

MICHAEL REUTERmichael.reuter@datarella.com

35

Alexander Bogensperger,

Andreas ZeiselmairForschungsstelle für Energiewirtschaft

Wir danken unseren Sponsoren.

Prof. Dr. Nils Urbach

Universität Bayreuth & Fraunhofer Blockchain-Labor

Fraunhofer Blockchain-Labor

Das Fraunhofer Blockchain-Labor ist eine der

Thematik entsprechende dezentrale Einrichtung

zur Konzeption, Entwicklung und Evaluation von

Blockchain-Lösungen.

• Transfer von wissenschaftlichen Erkenntnissen

in praxistaugliche Lösungen

• Kurze Entwicklungszyklen

• Umfassende und integrative Lösungen

Technologie

Geschäftsmodell

Recht

Unser Leistungsspektrum

Unsere integrativen Lösungsangebote

basierend auf der Trias aus

Geschäftsmodell, Technologie und Recht:

Geschäftsmodellentwicklung:

• Entwicklung von kunden- und branchen-

spezifischen Anwendungsfällen

• Potentialanalyse, Einordnung und

Entwicklung von disruptiven Lösungen

Technologieimplementierung:

• Bereitstellung der Entwicklungs-

umgebungen von unterschiedlichen

Blockchain-Systemen (P2P-Netzwerk,

Validierungsserver, etc.)

• Implementierung von Blockchain-

Lösungen

Rechtliche Betrachtung:

• Beratung hinsichtlich zu

berücksichtigender rechtlicher Aspekte

• Evaluation von Blockchain-Systemen und

Geschäftsmodellen unter

Berücksichtigung gültiger regulatorischer

VorschriftenWorkshops &

KeynotesGremienarbeit

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Projekte

Gutachten &

Studien

37© sebis191016 Matthes Smart Contract Platforms

Kontakt: Inés Lüdke, Leiterin Global Transaction Banking Bayern Süd

Telefon: 089/378-30814 ; E-Mail: ines.luedke@unicredit.de 38

we.trade – Vereinfachung europäischer Handelsgeschäfte

Gründungspartner HypoVereinsbank als Pionier

Sicher

Vollständig Digital

Entwickelt für europäische KMUs

Stetig wachsend

Keynote

Prof. Dr. Philipp Sandner

Frankfurt School Blockchain Center

Wir danken unseren Sponsoren.

Application Pitches

Part 2

Neele Franke

IBM

Wir danken unseren Sponsoren.

Armin BarbalataCDO

Member of the board

43© sebis191016 Matthes Smart Contract Platforms

STEFAN SCHNEIDER STEFANIE STÖHR

Dr. Markus Hablizel

Munich Re

Wir danken unseren Sponsoren.

Nürnberg Blockchain Meetup

meetup.com

Oder direkt:

https://www.meetup.com/de-DE/nbg-blockchain-meetup/

www.signatureventures.com @signature_vc Munich & Berlin

Invest in the Blockchain-Driven Paradigm Shift

Dr. Georg (Juri) Stricker

Senior Associate

+49 1712763207

Juri@signatureventures.com

49© sebis191016 Matthes Smart Contract Platforms

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Technische Universität München

Faculty of Informatics

Chair of Software Engineering for Business

Information Systems

Boltzmannstraße 3

85748 Garching bei München

Tel +49.89.289.

Fax +49.89.289.17136

wwwmatthes.in.tum.de

Florian Matthes

Prof. Dr.

17132

matthes@in.tum.de

Blockchain-based Systems

Characteristics

Focus on the precise, algorithmic descriptions of the rights and obligations of the contracting parties based

on a shared state

Trackability of all transactions

Use of cryptographic methods

Domain-specific languages

Decentralized peer-to-peer execution environment

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Summary

Drawbacks

High execution costs

Increased organizational and legal complexity

Paradigm shifting for the development of new business models

Problems they do not address

Correctness of input information

Enforceability of rights outside the execution platform

Correctness of the code