FROM PILOT TO PRODUCTION: THE BLOCKCHAIN STATE OF … · manual controls; “Plans to Commercialize in 2019” ... eLSys Foresight LyfeLens 9ahTLhb, CATLDU9 & AL/hIhL 59T9/TLhb +

FROM PILOT TO PRODUCTION:

THE BLOCK CHAIN S TATE OF PLAY FOR 2019

BLOCK HAS H LIVE , THIRUVANANTHAPURAM, DE CE MBE R 8, 2018

KE R ALA BLOCKCHAIN ACADE MY UNDE R THE AE GIS OF

INDIAN INS TITUTE OF INFOR MATION TE CHNOLOGY AND

MANAGE ME NT–KE RALA (IIITM-K )

BOB TAPS COTT

CE O TAPS COTT ADVIS ORS

CONTRIBUTOR BLOCKCHAIN RE S E ARCH INS TITUTE

BOB@ TAPS COTT.COM

© 2018 Blockchain Research Institute

BR I Members

The Dawn of A New E ra


Machine

Learning

Animating the

Physical World

Autonomous

Vehicles

Distributed

E nergy

Technology in

Our Bodies

Virtual Reality

Drones &

Robotics

Technologies of The Fourth Industrial Revolution

. Lh/ Y/ I A Lb

THE BLOCKCHAIN IS THE NE W S UPPLY CHAIN

Image by S tarline / F reepik (CC BY 2.0)

© 2018 Blockchain R esearch Institute

A S HORT HIS TORY

Trust

Image by S tarline / F reepik (CC BY 2.0)


A HIS TORY

International Payments and Trust

Dutch E ast India Trading Company British E ast India Trading Company


International Payments Today

Payer

$

US -Based

Bank

US Federal

Reserve

Correspondent

Bank

Correspondent

Bank

Bank of

England

UK-Based

Bank

Recipient

£

CLS


Current Interbank Cross-Border Payment


International Trade Payments Today

Foreign

Buyer

Buyer’s

Bank

Adv ising

Bank

Reimbursing

Bank

S eller’s

Bank

S eller

Freight

Forwarder

Nominated

Bank

Goods

L/C

Goods

Payment

Payment

Reimbursement Claim

Reimbursement

Documents

Reimbursement

Authorization

L/C

&

D

ocu

me

nts

De

bit

Do

cu

me

nts

L/C

A

pp

lica

tio

n


FOR BANKS IN FX

Is That Trust Warranted To J ustify the Fees?

•$7.77 trillion in Fed loans and guarantees to save the banks post 2008

•2015 C itigroup, Barclays, J PMorgan Chase, and RBS , pleaded guilty to rigging FX

currency rates, and agreed to pay $5.8 billion dollars in penalties

• U.S . District J udge S tefan R . Underhill said “when the market is rigged, folks who play by

the rules are suckers.”

•E quifax 143 million Americans private information exposed

•HS BC to pay $175 million for questionable FX practices

•Western Union to Pay $586 Million Over Failure to S top Fraud

•Citibank to refund $700 million to credit card customers for unfair and deceptive

practices

• William K. Black’s book


Latest Privacy Breech


Is There a Better Trust Argument?

•Trust in mathematics / S HA-256 cryptographic hash functions

•R alph Merkle, Whitfield Diffie and Martin Hellman

•Trust in immutability of a shared sequential ledger

•If cryptocurrencies are liquid and stable then FX moving through them faster and

lower cost than status quo

•S hould reduce the costs by orders of magnitude

•S hould speed up funds transfers (that now can take weeks) down to a few minutes

•Could give total transparency to the movement of funds

•Dan S chulman. CE O of PayPal on Change

HIS TORY OF COMPUTE RS

•1948 - Invention of transistors

•1951 - Univac Computer – Census

•1964 - IBM 360 with 32k+ main memory in the kHz

•1973 – IBM 370 with 512k+ with virtual memory in mHz

•1971 - Intel 4004 with > 2,000 transistors

•2018 - 100 million transistors per square millimeter

•2018 - S uper Computers in the tHz

THR E E INTE RRE LATE D CONCE PTS

. Lh/ Y/ I A Lb vs.

/ wYt Th/ U ww9b/ L9S

A wTLCL/ LA L LbT9L LLD9b/ 9

vs. a A / I Lb9 L9A wbLbD

vs. 599t L9A wbLbD

. LD 5A TA and the LoT

W I Y bhW ?

History Of Computers

• 1941 - German Z3 for Airplane design

• 1943 - Colossus for cracking E nigma

• 1945 - Mark I for ballistic charts

• 1948 - Invention of first transistors

• 1964 - IBM 360 @ 32 KB

• 1970 - IBM 370 @ 16 MB

• 1976 – F irst Apple

• 1981 – F irst IBM PC

• 2018 - 100 million transistors per square millimeter

RE ALLY OLD COMPUTING MODE LS

IBM 360 (1960s) IBM 370 (i970s) IBM 390 Reference (1990s)

TODAY ’S COMPUTING MODE L

CLhA TLbD t hLbT x87 LbSTwU / TLhbS

(From Current i7 Intel Reference Model)

Instruction Operands Ops Latency

Reciprocal

Throughput

E xecution

Pipes

Domain,

notes

Math

FS QRT 1 14-50 5-20 P01

FLDPI etc. 1 0.5 P02

FS IN 10-162 60-210 60-146 P0 P1 P3

FCOS 160-170 ~154 ~154 P0 P1 P3

FS INCOS 12-166 86-141 86-141 P0 P1 P3

FPTAN 11-190 166-231 86-204 P0 P1 P3

FPATAN 10-355 60-352 60-352 P0 P1 P3

FS CALE 8 44 5 P0 P1 P3

FXTRACT 12 7 5 P0 P1 P3

F2XM1 10 60-73 P0 P1 P3

FYL2X 10-176 P0 P1 P3

FYL2XP1 10-176 P0 P1 P3

b9U wA L b9TW hwYS

TOMOR ROW’S COMPUTING MODE L

A rtificial Lntelligence V s. 5eep Learning

Gartner Hype Cycle August 2018

A t 9wC9/ T SThwa

Possible Blockchain Insurance

Index

ThA pool of claims transparent and virtual could be paid for and bid for by

insurers / re-insurers

3rd

Party Plan Member Blockchained C laims Pool

Reinsurers


International Trade Payments Today

Many Intermediares (Trust is E xpensive)

Foreign

Buyer

Buyer’s

Bank

Adv ising

Bank

Reimbursing

Bank

S eller’s

Bank

S eller

Freight

Forwarder

Nominated

Bank

Goods

L/C

Goods

Payment

Payment

Reimbursement Claim

Reimbursement

Documents

Reimbursement

Authorization

L/C

&

D

ocu

me

nts

De

bit

Do

cu

me

nts

L/C

A

pp

lica

tio

n

Approaches To Artificial Intelligence

• S Y MBOLIC RE AS ONING

• CONNE CTIONS MODE LLE D ON THE

BRAIN’S NE URONS

• E VOLUTIONARY ALGOR ITHMS THAT

TE S T VARIATION

• BAY E S IAN INFE RE NCE

• S Y S TE MS THAT LE ARN BY ANALOGY

NE URAL NE TWOR KS

L1

L2

L3

h

NE URAL NE TWOR KS

h

L1

L2

L3

L4

L5

www

BIG DATA AND THE INTE RME DIARIE S

Open

Networked

E nterprises

(ONE )

Decentralized

Autonomous

E nterprises

(DAE )

S mart

Contracts

Autonomous

Agents

E ME RGING BUS INE S S MODE LS

AUTOMATION

CO

MP

LE

XIT

YL

ow

Hig

h

Low High

W I A T A wTLCL/ LA L LbT9L LLD9b/ 9 a A Y L A / Y?

5oghettifrom Doogle 5eep

A V incent van Dogh-inspired Doogle 5eep 5ream painting. t hoto: courtesy Doogle.

hb vious

Can AI Write Novels?

(The-six-basic-emotional-arcs-of-storytelling (emotional Valance)

• Alice’s Adventures Underground

Romeo and J uliet.

The Man-in-a-hole story by Vonnegut.

the Greek myth of Icarus

R ise-fall-rise, such as C inderella.

Fall-rise-fall, such as Oedipus.

S E LF-DRIVING CARS : THE AS PIRATION

Fewer traffic jams

Pickup and drop-off

Garages → Housing

Consumer customized public transit

Pooling vs. Driving

The wace for 5riverless / ars

S E LF-DRIVING CARS IN PR ODUCTION

Image credits:

“Waymo self-driving car side view” by Grendelkhan (CC BY-S A 4.0)

“S elf driving Uber prototype in S an F rancisco” by Dllu (CC BY-S A 4.0)

“A Cruise Automation Chevrolet Bolt seen in S an Francisco” by Dllu (CC BY-S A 4.0)

DhhDL9 W A Ya h

Human intervention every

5,600 miles

U . 9w

Human intervention every

~13 miles

/ I 9V whL9T . hLT

No steering wheel, pedals or

manual controls; “Plans to

Commercialize in 2019”

WILL COMPUTE R S E VE R DRIVE

AS WE LL AS HUMANS ?

Image by fanjianhua / F reepik (CC BY 2.0)

WHAT WILL COMPUTE R S (S OON) DO BE TTE R?

Driving Cars

Newscasters

Trust / Disintermediation (Blockchain)

Patent S earches

Precedent Research

Medical Diagnosis

J ust-in-time training

Piloting aircraft

Killing

Immigration

J udge (and J ury) ?

E liminate or S ustain Biases

S cience Discovery ?

Is The Terminator Inevitable?

The T-X , played by Kristanna Loken

Will the E mpire F ight Back?

THE FUTURE OF TRANS PORTATION

whU T9 t L A bbLbD

S patial

C itiviz

CommuteMaster

X

moovit

C itymapper

Waze

t A wYLbD

Waypals

C loudPark

Pearl

S eevider

Aware

Parko

FenS ens

VoicePark

S potHero

Luxe

/ A w I A LLLbD & t hhLLbD

Tesloop

Lyft

R ideCell

30

hTI 9w: A CT9wa A wY9T,

w9t A Lw, w9bTA L

Carvue

Upshift

Wrench Patrol

Zipcar

Getaround

Urgently

Tantalum

bitkar

t I YSL/ A L / A w & 5wLV 9w

SA C9TY + A / / L59bT

59T9/ TLhb

Drivebetter

S plitS ecnd

Near

S mart Autolabs

Tourmaline Labs

iproc

Guardian

Phrame

eLS ys

Foresight

LyfeLens

9a hTLhb, CA TLDU 9 &

A L / hI hL 59T9/ TLhb +

5LSTwA / TLhb A V hL5A b/ 9

Coretex Labs

E yeris

S averOne

S martWheel

Alma Care

R adioMize

06

Carma

E asy

Carvi

/ Y. 9wS9/ U wLTY

Cymotive

Cognamotiv

V isualThreat

Argus

Olympus S ky

Karamba S ecurity

Arilou

LbTwU SLhb, TwA / YLbD &

w9/ hV 9wY

Tracknstop

Nonda

R oadE ye

GMT Connect

Caruma

V 9I L/ L9 5LA DbhSTL/ S &

t w95L/ TLV 9 a A LbT9bA b/ 9 +

S9bShw-. A S95 V 9I L/ L9

S A C9TY

TrueMotion

Braiq

IQ

Metromile

Light Metrics

t A S S9bD9w-Ch/ U S95

S9bShwS (Lb/ L U 5LbD U S A D9-

. A S95 LbSU wA b/ 9

Cartics

Zubie

S oniclue

PredictS ystems

Nebula

Nauto

E ngie

LbChTA Lba 9bT + 5LSt L A Y

Link Motion

S wedspot

Hudify

Carrobot

OverDrive

F iconic S olutions

R ightware

Pelagicore

R oav

C loudcar

t 9wShbA L/V hL/ 9

A S SLSTA b/ 9

NaviDeck

Dash

Grin

Automatic

CarIQ

bA V LDA TLhb A SSLSTA b/ 9 +

t 959STwLA b A bA LYSLS &

/ ha a U bL/ A TLhbS

Navdy

Hudly

Perceptive Automata

A U Tha A TLhb SYST9a

AutoX

Drive.ai

Pilot

Cruise

PolyS ync

CogniVue

nuTonomy

OxBotica

AIDriving

Vector.ai

Oryx

BWV

AIMotive

Moventa

a A t t LbD, SLa U L A TLhb &

La A D9 w9/ hDbLTLhb/

A bbhTA TLhb

IvIS

minds.ai

Nomoko

Mapper.ai

Improbable

Udacity

Understand.ai

Carmera

Tomtom

DeepMap

Civil Maps

A U Thbha hU S V 9I L/ L9

a A Y9w + ThhLS

Nuro

Faraday Future

Waymo

Zoox

S9bShw b9TW hwYLbD

LbCwA STwU / TU w9 (V 2V , V 2X)

–Lt W A , / 9L L U L A w, W LCL

Digimondo

E vvos

S avari

ZiF iS ense

Actility

/ hbb9/ T95 / A w –5A TA ,

t L A TChwa , ShCTW A w9

ActiveS caler

Inrix

mobiliuz

Vinli

Otonomo

Mobile Assisted Driving

Bright Box

Vehicle Data S cience

Mojio

Carvoyant

CL99T + TwA CCL/

a A bA D9a 9bT

BestMile

C loud Your Car

Travel.ai

locoNav

Immense S imulations

Automile

S ynovia

F leetmatics

Zendrive

Motorway Buddy

Mentis S ervices

Urban E ngines

Glydel

Motionlogic

Brisk S ynergies

hTA / A w ShCTW A w9

U t 5A TLhb + Sa A wT t I hb9

9bA . L95 T9L9a A TL/ S

F ixd

DriveBot

Voyomotive

Zene

Arynga

b9W /A 5V A b/ 95

a A T9wLA L S

Aquarius

NaW a Technologies

S irrus

Nano S teel

wA t L5 t whThTYt LbD –35

t wLbTLbD,

a h5U L A wLZA TLhb, ht 9b

ShU w/ 9

DM

Carbon

OS Vehicle

Nanocore

LM

Drivergent

S trataS ys

Vader

A 5V A b/ 95 / A U Tha A T95

A SS9a . LY LLb9

Grabit

S ymbio

C learpath

R oboMotive

R ethink R obotics

a A T9wLA L

/ I A wA / T9wLZA TLhb &

T9STLbD

S ynTouch

Vidi

S astra

Optofidelity

Lh/ A TLhb –DLS, t w9/ LSLhb

t hSLTLhbLbD, t A TI

t L A bbLbD

S wift Navigation

R adioS ense

.1

E XO Technologies

V LSLhb / / A a 9wA

Deep Vision

Carnegie R obotics

DeepS cale

Chronocam

Machines W ith V ision

R oadS ense

VayaVision

LL5A w

Facet

Innoviz

Phantom Intelligence

Voyage

Quanergy

E ye

Trillumina

LeddarTech

Velodyne Lidar

S trobe

wA 5A w

Oculii

R fisee

Toposens

6th

S ense

S DS

2-W I 99L9wS

Mobike

S marthalo

S uperpedestrian

ZagS TE R

t U . LL/ TwA bSt hwT

Navya

LM

Varden Labs

Auro

E asy Mile

TwU / YS / Cw9LDI T

Tesla

J aybridge R obotics

Otto Motors

Peloton

F lexport

Truelite Trace

S tarsky R obotics

CLLDI T

Wright E lectronic

Zee

J oby

Kitty Hawk

Zunum Aero

Lilium Aviation

Aeromobil

hTI 9w: I Yt 9wLhht ,

t 9wShbA L a h. LLLTY

Hyperloop One

NineBot

Whill

R YND

S9wV L/ 9S S A C9TY & S9/ U wLTY

Lb-/ A w LbT9L LLD9b/ 9 &

A SSLSTA b/ 9

A U Thbha Y

LbCwA STwU / TU w9 &

/ hbb9/ T95 / A w

LbT9L LLD9bT

a A bU CA / TU wLbD

hb. hA w5 S9bShwS S t 9/ LA LTY V 9I L/ L9S

WILL AI, BLOCKCHAIN, AND BIG DATA AFFE CT US ?

IN RE ALITY

Uber's loss running at $billion per quarter

#1 job in 47 out of the 50 states (truck driver) soon gone

5% of all jobs gone by 2020 (WE F )

6% of all jobs will be eliminated by 2021 (Forrester)

Up to 800 million jobs gone by 2030 (McKinsey)

50% of occupations redundant by 2025 (CBRE / Genesis)

AI will create a few jobs, for the highly technically skilled in

Comp S ci, and S tatistics

HAVE WE BE E N CONCE RNE D BE FORE ?

WhI b a A YbA w5

Y9Yb9S

WhI b C. Y9bb95Y TI 9 TwLt L9

w9V hLU TLhLb

THIS TIME , ARE THE CONCE RNS RE AL?

5isplacing a illions / ould a ake Trillions

S mart Contracts and The Blockchain

https://arxiv.org/ftp/arxiv/papers/1710/1710.06372.pdf

3. U tility tokens

5. batural asset

tokens

1. / ryptocurrencies

7. / rypto-fiat

currencies and

stab lecoins

CRYPTOASSET CATEGORIES

2. t latforms6. / rypto-

collectib les

4. Security tokens


But The Market is Beginning to Decline

https://www.bloomberg.com/news/articles/2018-09-10/crypto-ico-funding-dropped-in-august-to-lowest-in-16-months

S ome of the Basis of that Disillusionment

•Bitcoin is too tightly held

•Blockchain environmentally hostile

•Bitcoin and E thereum far too slow for most applications

•Many better smarter technologies launched, but none have

dominated

•Cryptoasset pricing feels more like the wild west, than a basis

of trust

•Both E thereum and Bitcoin are not ACID Or BAS E compliant


Cryptocurrency E nthusiasts

•S ee it as a basis of trust

•S ee it as an eventual fiat currency

•S ee it as a libertarian dream

•S ee it as a counterculture

•S ee it as a system of fairness and redistribution

•S ome see crypto assets Proof of Work… .as a store of true

value, as opposed to the arbitrary printing of money

•S ome see it as pure speculation


Currency S tability

https://www.oanda.com/fx-for-business/historical-rates? utm_ source=average_ rates

GBP E UR CAD AUD


Cryptocurrency S tability

https://www.cryptocurrencychart.com/


VE NE ZUE LA

For S ome Currencies F iscal Policy Mismanaged

https://www.oanda.com/fx-for-business/historical-rates


Country L ist Government Debt to GDP %

J apan 253%

Greece 179%

Lebanon 149%

Italy 132%

Portugal 126%

Cape Verde 125%

Congo 117%

S ingapore 110%

Bhutan 109%

United S tates 105%

J amaica 103%

Belgium 103%

E gypt 101%

S pain 98%

Cyprus 97%

France 97%

J ordan 96%

Djibouti 91%

Bahrain 91%

Canada 89%

https://tradingeconomics.com/country-list/government-debt-to-gdp


F iscal Policy Differences By Country


The (crypto) assets of the future?

•Need have:

• Credible Throughput

• Widely Accepted E ase to Use

• Compliance with R egulation

• Broadly Distributed

• An Identity Framework

• S ecurity and Cyber Defense

• Competitive Costs

• Reliability

• S trong Governance

• Data Controls

• S table in Value

• F iscal Policy

• Monetary Policy

• S tandardization


Are Crypto Currencies Mathematically S olid?

How to distribute Coins

Proof of Work

Proof of S take

Proof of Capacity

Common Hashing Functions

S HA-256, S crypt, X11, X13

Difficulty

KGW, DGW, Niteè s Gravity Wave

Interblock time

Bitcoin ten minutes

Litecoin 2.5 minutes

Number mined

Bitcoin originally 50

Dogecoin 10,000 a joke with ½ billion


Coins of Interest

Litecoin

S crypt as PoW

Memory intensive so AS IC proof (R equires a large array of pseudo random bits)

Proof of Work

Proof of S take

Proof of Capacity

Primecoin

designed to be AS IC resistance

CPU mined, not AS IC

Zcash

Zero Knowledge Proof

Complete Privacy to all Users

ZK-S narks

DAP (Decentralized Anonymous Payment S cheme)


Are Cryptocurrencies a Truly S afe R eflection of a DAO?

They could be but software is still created by humans:

- Over 30 heists of cryptocurrency exchanges

- A million bitcoins have been stolen

- 25,000 customers lost bitcoins on Mt. Gox alone

- C laims approved by the bankruptcy trustee total more than $400m

- Bitcoin Price Manipulated by cryptocurrency trading bots

- 97% of all bitcoins are held by 4% of addresses

- Mining for E thereum has three miners accounting for 61 percent of the system’s average weekly

capacity.

- Liquidity inversely correlates with price

- R ipple has more than half coins XR P in existence held by them


Are Crypto Currencies S afe?


Funding Remains High for S elect ICO’s


Funding Remains High for S ome ICO’s


E OS


The ICO that Has Yet to Be


Digital Asset S ervice Provider


HDAC (internet of Things Payment Platform)


Where 2018 ICOs Proving to Be S peculative?

Crypto S tartups

•“S uccess Rate” 56 percent of funded crypto startups die within

four months of their initial coin offerings.

•a Boston College study determined that only 44.2 percent of

startups survive after 120 days from the end of their ICOs.

(Hugo Benedetti and Leonard Kostovetsky based on 2,390 ICOs)

https://www.bloomberg.com/news/articles/2018-07-09/half-of-icos-die-within-four-months-after-token-sales-finalized


In Conclusion

Trust is moving from institutions to mathematics, inevitably

Distributed Autonomous Organizations Are coming

The wild ride of unregulated crypto speculation is likely coming to an

end, as regulators become more knowledgeable and emboldened

Investors recently burnt will be twice shy

Currencies and cryptocurrencies will likely merge for some 3rd

world

countries

The true cryptocurrency of the future has yet to materialize

BOB TAPS COTT

CE O TAPS COTT ADVIS ORS

CONTRIBUTOR BLOCKCHAIN RE S E ARCH INS TITUTE

DE S IGNE R OF BLOCKCHAIN S OLUTION

BOB@ TAPS COTT.COM

416.274.5468