Blockchain For Beginners

About Me

• Kian Paimani aka. @kianenigma
• Engineering Lead @ Parity Technologies
• Polkadot Fellow
• blog.kianenigma.com (<-- slides)

Introduction

Owning Money

• €100 worth of Bitcoin, and €100 in your national bank of choice. What is the difference?

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Owning Money

• How?
• ­🧮 Cryptography: Military-grade, politically neutral technology
• ­🤑 (Crypto)Economic Security: You diverge from correct behavior? You lose money
• ­🔂 A lot of re-execution of the same work
• ­⛓️‍💥 Did you notice a blockchain is not in the list? More on that later

Notes:

More on this in Blockchain Scalability - A Holistic Recap

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Owning Money

• ­🔫 + 🏦 + 👩‍⚖️ $\to$ Trust
• ­🧮 + 🤑 + 🔂 $\to$ Truth
  • ­aka. Verifiable trust
  • ­ "Less trust, more truth"
• ­Blockchain systems yield a truthful computer.

Properties Of The Truthful Blockchain Computer

Let's examine

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Properties: Execution + Storage

• ­Given a set of rules for the computer encoded as a code
• ­And an input to that code
• ­The code is executed correctly
• ­Any storage update by that code is truthful
• ­Truthful Execution + Storage
• ­What is the code, input, and storage in Bitcoin?

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Properties: Execution + Storage

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Properties: Auditable History

• ⛓️‍💥 Blockchain (is overrated)!
• Blockchain != Blockchain-based system

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Properties: Public

• Both code and storage and inputs to that code need to be public for other network participants to verify it
• ­🔂 Re-execution necessitates (some degree of) publicity
• ­✅ ZK-SNARK proofs? Yes, that'll work

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Properties: Digital

• Needless to say, this truthfulness only applies to the execution of the code, and its side-effect storage.
• ­Not anything else, and importantly not the real world.

How

• How the blockchain computer becomes truthful?
• ­🔂 $\to$ Network of nodes, some authoring new blocks, some verifying
• ­🤑 $\to$ PoW, PoS
• ­⛓️‍💥 $\to$ Blockchain used to keep track of the correct order

Note:

We actually covered this.

• POW and POS are both ways to ensure economic security

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PoS vs. PoS

Evolution Of The Blockchain Computer

• From the point of view of the primary developers
• .. Although history tells us this leads to the user experience as well 🤭

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Evolution Of The Blockchain Computer

• Bitcoin: Domain-specific. Fixed code and storage
• 🦖 A lot of other dino-chains are similar

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Evolution Of The Blockchain Computer

• Smart Contract!
  • ­A (limited) way to extend the code and storage of another blockchain computer
• ­ Ethereum, (most) Rollups, and anything else EVM-based
• ­ Solana, NEAR, ETH-killers and family

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Evolution Of The Blockchain Computer

• How about we have multiple blockchains with different code and storage each?
• ­Polkadot / Cosmos
• ­Some Ethereum Rollups

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Evolution Of The Blockchain Computer

• How about we don't expose the blockchain to developers?
• ­Polkadot JAM, ICP, with differing properties

Introduction Ends

Questions?

Reflection / Discussion

• Not financial advise 😁

What Have We Solved?

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What Have We Solved

• ✅ Commoditization of digital finance?

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What Have We Solved

• 💶 Payment integrated into the internet protocols?

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What Have We Solved

• A lot of other verticals attempted, but none are as successful as DeFi.
  • Identity, RWA, IoT, Gaming
• ­Why?
  • ­Some due to lack of scalability
  • ­ Some due to stickiness
  • ­Some due to lack of PMF

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Lack of PMF

• We cannot determine what problem can a technology can solve, if we don't exactly understand what that technology does.
• ­ Ask yourself: When/Why do you I need a truthful computer with the properties mentioned above?

Notes:

• Social interactions, in societies large enough when you cannot trust one another

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Why DeFi is Perfect PMF

👉 NOT A COINCIDENCE 👈

• ­✅ Social interaction, needs truthful computer as intermediary
• ­✅ Happens on entirely digital data
• ­✅ Limited computation and storage needs
• ­✅ Publicity is tolerable

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What Else Is a PMF?

Note:

Exercise to look at the list of applications that you use, and determine in which:

1. it is digital
2. You are interacting with other humans

Limitations / Frontier Problems

• ­The Oracle Problem
  • ­Personhood, Identity
• ­Private Computation
  • ­FHE / ZK-SNARKs / MPC

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Limitations: User Experience

• Blockchain developers tend to expose the underlying infrastructure to users

Notes:

• User Interface/Experience is the main bottleneck
  • The amount of underlying details that we expose to user is as if:
    • We asked an email writer to compose the email headers
    • To open a webpage you would have to send a GET request, then paste the results into a separate HTML viewer
      • Then when clicking on a new button you would repeat the same

(Politically Correct) Opinions End

Questions?

🌶️ Spicy Opinions

(DEFINITELY not financial advice)

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Speculation

• Over-speculation in blockchain as an infrastructure is..
• ­ 100% real

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Speculation

• DotCom bubble, happening 2 months after the internet was invented, with 20 times more capital

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Greed / Psychology

This industry is a unique mixture of

• A lot of capital
• A lot of potential to empower of individuals to build financial applications

Note:

I am sure some behavior scientists will look at our behaviors today as developers and investors in this space and so amazing studies on it

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Potential For Good and Bad

• Like any other technology, it is a double-edged sword
• I have spent ~7 years of my life on this, and I ~believe~ can see and understand that it has a great potential for good.