Blockchain
Technology

Andreas Park

Lecture 3: Finance Applications

Lecture 1: 30,000 ft overview

  • Motivation and background
  • Blockchain architecture
  • basic functionality
  • demo of workflow in a blockchain

Lecture 2: Drilling down

  • components of blockchain transactions
  • keys, signatures, and addresses
  • hashing
  • consensus protocols
  • mining

Lecture 3: Finance Applications

  • concerns and solutions for permissionless blockchains
  • private blockchains
  • tokens and coin offerings
  • crypto trading

Lecture 4: Smart contracts

  • ERC20 tokens
  • Solidity demo

Schedule of Topics

Objectives

  • components of blockchain transactions
  • keys, signatures, and addresses
  • hashing
  • consensus protocols
  • mining
  • A warning: this lecture is going to be a little mathy

Last Lecture:

Drilling Down

Lecture 3:

Finance Applications

Objectives

  • concerns and solutions for permissionless blockchains
  • private blockchains
  • tokens and coin offerings
  • crypto trading

Results from the poll

Comparing Bitcoin and Ethereum

  • first full application of a working public, permissionless blockchain
  • innovation: combines
    • proof of work for consensus with
    • public-private key signatures and
    • storing information in blocks
  • it's not a firm
  • it's not controlled by anyone
  • yes, there is standard software used but
    • no single person forces compliance to standard
    • all is open source
    • changes require a global consensus
  • can't do much other than transfer stickers

Bitcoin

  • Bitcoin = single-use
    • transfer coins
    • (exception: so-called "coloured" coins)
  • Ethereum = Blockchain 2.0:
    • cryptocurrency Ether is a means to an end
    • Example: How do you arrange a true blockchain-only exchange?
      • need an escrow => autoexecuting code that runs on a blockchain
  • create a "virtual computer" for decentralized code execution
  • code execution = require computing power
    • malicious code could "crash" virtual machine
    • pay for GPU cycles =>Ether is the "fuel" 
  • Big message:
    • Ethereum is not a "better" cryptocurrency
    • It is a code execution network that runs on Ether

Ethereum

  • developed and built by a Waterloo-based team around Vitalik Buterin
  • not a firm
  • team had the chance to sell their system to Google, but declined
  • instead built a "Foundation" => Ethereum cannot be "bought" 
  • founders still got wealthy as they did/do have a stake in the coins

Some Ethereum History

  • with this history comes a philosophy
  • Blockchain entities don't strive to be "firms"
  • they form teams for projects, invite everyone, not concerned about IP
  • they don't strive to get high-powered jobs or sell to a large bank
  • but yes, they want to drive Lambos 

Mining concentration

Source: blockchain.info 25/02/2018 

Source: etherscan.io 25/02/2018 

Ether

Bitcoin

Miners

  • have a huge say over changes in the protocol, and

  • they can collectively block changes, force forks, etc., and

  • have incentives that may run counter to the common good

Concerns and Shortcomings of Public, Permissionless Blockchains

  1. Not enterprise grade - runs on people's home computers
  2. Scalability
    • the feasible transaction frequency is much too low
    • Bitcoin: <10 TPS, Ethereum ~30 TPS, VISA: >10K TPS
  3. Energy consumption
    • proof of work = mining => uses way too much electricity
  4. Privacy:
    • all activities and contracts are visible (albeit by anonymous addresses)

Concern 2: Scalability in Bitcoin

  • block limit of 1MB => limits # of transactions per block

Root Problem

  • increase block limit (led to "Bitcoin Cash")
  • decrease content per block (Segwit => eliminate signatures from the blocks)
  • double-signed transactions ("Lightning Network")

Solutions

  • problem:
    • currently, getting on a block is competitive and people are throwing money (fees) at the problem => miners benefit
    • with larger blocks, total fees may decline
    • => Difficult to get miners on board

Concern 2: Scalability in Bitcoin

Source: bitinfocharts

Concern 2: Scalability in Bitcoin

S=1M

S'=8M

\Rightarrow~p*=\frac{a-S}{b}

p

p'

demand=supply

\text{demand}=a-b\cdot p
\text{revenue}=S\cdot p^*=\frac{a}{b}\ S -\frac{1}{b}S^2

revenue maximizing S*:

S^*=\frac{a-2}{b}

Empirical question:

1M vs 8M: which has higher revenue?

Concern 2: Scalability in Ethereum

  • ​Ethereum blocks have no size limit
  • but: gas limit imposes computation  limit and thus transaction limit
  • note: in contrast to Bitcoin, Ethererum always announced that it would eliminate proof-of-work eventually

Root Problem

  • Side Channels:
    • Keep two-party interactions off the main chain and use chain only for terminal settlement
  • Sharding
    • instead of storing all info on all nodes, break up the blockchain into shards

Solutions

https://blog.stephantual.com/what-are-state-channels-32a81f7accab

Concern 3: Energy Consumption

Root Problem

  • Irrespective of scaling solutions, increasing difficulty will require ever-increasing energy consumption.
  • Should real resources fuel the digital world?

Solution

  • Proof of Stake
    • Idea:
      • select people according to stake in the chain (to avoid Sybil attack)
      • they build blocks based on verified transactions
    • Problem: no working implementation yet
    • CASPER:
      • add punishment for malicious behavior

Key problem of Proof-of-Stake:

How to incentivize support of longest chain?

B3

B1

B2

B4

B5

B6

Where to add a new block B7?

  • PoW: only longest chain
  • PoS: could add both at B3 and  B6 (nothing-at-stake)
    • solution: punish deviations!

My personal problem: I have not yet seen a convincing theoretical model of PoS

Concern 3: Privacy/Secrecy

  • intrinsic feature of public blockchains is that information gets stored by public addresses.
  • logic of smart contracts is visible to all
  • => firms have need of secrecy, individuals have rights to privacy

Root problem

Solutions

  • large numbers of wallets/addresses
  • coinjoin
  • ring signatures
  • zero knowledge proofs

Concern 3: Privacy/Secrecy

  • Note: some tricks like coinjoin aren't enough.
  • See: "When the cookie meets the blockchain: Privacy risks of web payments via cryptocurrencies" by Goldfeder, Kalodner, Reismany, Narayanan

Zero Knowledge Proof

  • Basic feature of blockchain:
    • public-private key signatures to prove ownership
    • Why? concern that the signatory is fraudulent
  • Idea of Zero knowledge:
    • the verifier may be fraudulent
    • reveal that you are the owner of information without revealing the information
  • Problems
    1. occurence of transaction is still visible
    2. on Ethereum, consumes a lot of "gas"
      • transaction = 21,000 gas
      • ZK Snark = 1,800,000 gas
      • 20 cent transaction => $17 for ZKs

Summary

  • There are real concerns.
  • There are paths to solutions for the problems.
  • The economic foundation of some approaches on public blockchains is weak and not yet well understood.
  • Much work, including conceptual work, is needed, but much work is also being done.

Private/Permissioned Blockchains

  • public:
    • no restrictions on reading blockchain data (which still may be encrypted) and submitting transactions for inclusion into the blockchain.
  • private
    • direct access to blockchain data and submitting transactions is limited to a predefined list of entities.
  • permissionless
    • no restrictions on identities of transaction processors (i.e., users that are eligible to create blocks of transactions).
  • permissioned
    • transaction processing is performed by a predefined list of subjects with known identities.

Terminology

Why private/permissioned?

  1. KYC = Know Your Client
    • private allows operator to check who is using the chain
    • can restrict access to, e.g., investments when not suitable
  2. AML = anti money laundering
    • crypto-currency transactions can be used for money laundering
    • can be prevented when you know users
  3. No need for cryptocurrency
    • private blockchains can operate with monetary coinbase rewards
  4. Scalability/no need for proof-of-work
    • validation roles can be assigned to trusted parties => higher throughput
  5. Data protection
    • higher control over what is shared and how interactions are organized

Why not private/permissioned?

Let's discuss it!

Ethereum Enterprise Alliance

Common Idea:

  • build private blockchains on top of Ethereum
  • use open source tools

Advantages

  • preserve interoperability of systems
  • compatibility and free development
  • best of two worlds? 
  • 150 companies are members of EEA
  • US$400M invested in VC funding (CBInsight)
  • US$900M from tokens since Nov 2016 (Smith and Crown).

Raiden Network

Description Idea:

  • Raiden Network is an off-chain scaling solution for performing ERC20-compliant token transfers
  • no need for global consensus
  • How? This is achieved using digitally signed and hash-locked transfers, called balance proofs, fully collateralized by previously setup on-chain deposits.
  • = "payment channel technology"

Basic idea

  • two parties who plan a regular interaction put money in an Ethereum escrow account
  • they interact and final settlement occurs on the Ethereum blockchain
  • they maintain a hash-secured record of the interactions (both sides sign)
  • can be extended to multi-party interactions/networks of interacters

Quorom (by J.P. Morgan)

  • Idea: a permissioned version of Ethereum
    • known nodes
    • private interactions
    • trustless
  • Design:
    • privacy layer for smart contracts
    • contracts stored locally
    • hashes of encrypted contracts on public chain
  • Key feature: Zero Knowledge tech

Quorom (by J.P. Morgan)

AION

  • Allow creation of custom blockchains that connect via Aion network
    • => customize governance, issuance, and participants.
  • Provide federated inter-chain communication of data and value between all Aion network spokes.
  • Connect with the main Ethereum blockchain, allowing AION tokens to traverse chains between Aion-1 and Ethereum seamlessly

Features

  • high-performance virtual machine (VM) (for smart contracts)
  • scalable database

Premise

  • In the future there will be many blockchains.
  • Enterprises will operate various blockchains in-house
  • mined chains are not suitable for enterprises because they are dependent on entities (miners) outside their control.
  • Aion will combine them and enable interoperability

AION

transaction bridge supported by validator votes

votes ("signatures") get stored on Ethereum 

transaction bridge supported by validator votes; get paid in AION tokens

AION Blockchain

Special Features:

  1. Representative validators
    • like a representative democracy, vote for who should be a validator
    • vote is backed by a stake
    • rewards flow to backers
  2. Consensus protocol
    • "Proof of Intelligence"
  • require participants to train a predefined neural network so that
    • output ~ proposed ground truth
    • e.g., hash of current block | hashes of previous 𝑁 blocks.
  • Parameters of the trained neural network will serve as a proof that computation took place.

Hyperledger Sawtooth

What is Hyperledger?

  • not a blockchain
  • not a company
  • not a cryptocurrency
  • project by the Linux Foundation
  • open-source project

What is Sawtooth?

  • blockchain suite by Intel
  • consensus protocol: 
    • Proof of Elapsed Time (PoeT)
  • written in Python
  • allows permissioned and permissionless application

Hyperledger Sawtooth

What is PoET?

  • uses secure CPU instruction (available in new processors like Intel builds)
  • Instructions
    • => random selection of a  “leader”/scheduler
    • Like Bitcoin: "randomly" become first to solve puzzle and get one-time access to write the blockchain.
  • to be scheduler:  
    • “validator” (=nodes) use the secure CPU instruction to request a wait time.
    • Validator with the shortest wait time will be elected as a leader. 

Hyperledger Sawtooth

My understanding (vastly simplistic)

  • ​main idea: isolate consensus from transaction
  • transactions are send to validators
  • they check and form batches
  • validators send batches to block publishers
  • block publishers allow PoeT winner to validate blocks
  • a chain controller updates the "head of the chain"

Hyperledger Fabric

  • developed by IBM
  • implemented in Go
  • smart contract system: "Chaincode"
  • basic idea:
    • have two-party interactions
    • commit only what's necessary to the public chain
    • => save processing costs
    • => increase speed and privacy
  • Participants usually need to register to get the permission to join and issue transactions on a Fabric based blockchain

Key roles

  • consenter
    • orders the already validated transactions
  • endorser
    • build, validate and propagate transactions and chaincode
  • committer

Hyperledger Fabric

Hyperledger Fabric

Hyperledger Fabric

Hyperledger Fabric

R3 Corda

  • Similar idea as most others:
    • keep transaction details locally
    • rely on direct interactions with record keeping

Key feature

  • digital notaries that settle disputes by reviewing signed transaction data

R3 Corda

My take:

  • translation of the current world into the digital world
  • maintains position or rent-seeking institutions

Coins and tokens as financial instruments

  • to understand token/coin offerings, we must understand
    • venture financing
    • crowdfunding
  • But since someone will ask: what is an ERC-20 token?
  • Set of 6 mandatory functions that yield 4 items:
    • total token supply,
    • account balance,
    • transfer of  token from one party to another;
    • Approve the use of token as a monetary asset.

The financing journey

The financing journey

  • Stage 0: Initial capital required to start a business
    • usually provided by the entrepreneur and their immediate family.
  •  Stage 1: Friends and Family
  • often go to people who they know.
    • Empirical evidence: F&F firms do substantially worse than those that find other sources of financing (Zaccaria 2015)
  • Alternative Stage 1: Angel Investors
  • Individuals who buy equity in small private firms
  • Finding angels is typically difficult.
  • Stage 3: Venture Capital Firm
  • A limited partnership that specializes in raising money to invest in the private equity of young firms
    • Usually sets up a time-limited fund
    • Usually charge substantial fees.
    • Most VC firms charge 20% of any positive return they make.
    • Annual management fee of about 2% of the fund’s committed capital.
    • General partners take a share of any positive return generated by the fund in a fee referred to as carried interest.
  • Focus is on "massively scalable" activities
  • Often expect annual return of >20%
  • Key: you cannot collect money from anybody!

The financing journey: the exempt market

  • accredited investors
    • Outside friends and family, entrepreneurs can approach wealthy individuals who meet certain criteria
    • Income about $200K, wealth (non-leveraged) in excess of $1M, etc
    • commonly these are Angels or limited partners in VC funds 
  • Datasource: Ontario Securities Commission

The financing journey: the public

  • public listings come with the full regulatory reporting burden
  • Idea of securities regulation:
    • ensure that market participants can base their decisions regarding investments such as equities or bonds on a reliable and defined set of information.
    • Trading should be fair, reliable and offer efficient price formation.
  • accredited investors are considered to be "sophisticated enough" not to get easily duped
    • => that is why they are "exempt"
  • New thing: Crowdfunding

    • Recently permitted by the SEC in the US and the CSA in Canada; restrictions (among others)

    • Limits for investors (per firm and total portfolio value)

    • Must used registered platform

Crowdfunding around the world

  • Source: Law, trust, and the development of crowdfunding by Raghu Rau, (WP 2017)

Crowdfunding around the world

  • Source: Law, trust, and the development of crowdfunding by Raghu Rau, (WP 2017)

Economics of Crowdfunding

  • Type 1: 
    • traditional securities, just made available in different mechanism
  • Type 2:
    • Pre-sale of a product
    • helps entrepreneur ascertain demand

Crowdfunding around the world

  • Source: Law, trust, and the development of crowdfunding by Raghu Rau, (WP 2017)

Crowdfunding in Canada

Crowdfunding in Canada

  • Equity portals: 16
    • Often do real estate deals
    • Example: NexusCrowd, Crowdmatrix
  • Lending portals: 9
    • Examples: Borrowell, Lendified, LendingLoop
  • Other portals: 45

Crowdfunding through coins/tokens

Token Sales since Jan 2016

  • Data: coinschedule

Classification (Source: Satis Group LLC)

  1. Scam (pre-trading) (never intended to go anywhere)
  2. Failed (pre-trading): (not enough funding)
  3. Gone Dead (pre-trading): got funding, never made Github code contribution
  4. Dwindling (trading): got funding, wrote code, but hasn't gotten much tangible
  5. Promising (trading): as dwindling but got more done
  6. Successful (trading): steams ahead

Now for the ugly truth

Now for the ugly truth

Source: Satis Group LLC

Now for the ugly truth

Source: Satis Group LLC

Now for the ugly truth

  • New.bitcoin.com using Tokendata:
    • 902 crowdsales in 2017
    • 142 failed at the funding stage
    • 276 have since failed
    • => 46% of 2017 ICOs have already failed.
  • Some comparative stats:
    • U.S. Bureau of Labor Statistics reports: 1st year failure rate of businesses with employees is about 20%.
    • Gosh (2012, HBS study):
      • of 2,000 VC-backed startups $1 million from 2004 to 2010,
      • 75% never return cash to investors
      • 30% of the 75% implode.

Are tokens/coins securities?

“I believe every ICO I’ve seen is a security. … ICOs that are securities offerings, we should regulate them like we regulate securities offerings. End of story.”

 

Jay Clayton, Chairman, U.S. Securities and Exchange Commission, testimony before the United States Senate, February 6, 2018

“I have asked the SEC’s Division of Enforcement to continue to police this area vigorously and recommend enforcement actions against those that conduct initial coin offerings in violation of the federal securities laws”

What is a security? The Howey Test

  • 1946 U.S. Supreme Court case of SEC v. W.J. Howey Co.
  • instrument = security if
    • involves investment of money or other tangible or definable consideration used in a common enterprise
    • with reasonable expectation of profits to be derived primarily from the entrepreneurial or managerial efforts of others.
  • Note from furniture store to finance a customer’s purchases:
    • not a security (purpose is to facilitate the purchase)
  • Notes issued by a corporation for the general use of the company
    • buyer is primarily interested in the economic gain from the entrepreneurial efforts of others => is a security!
  • Form (formal certificate, nominal interests in the physical assets, etc) is irrelevant. ​

What is a coin/token a security? Swiss Regulator's View

  • Securities regulation:
    • ensure that market participants can base their decisions regarding investments such as equities or bonds on a reliable and defined set of information.
    • Trading should be fair, reliable and offer efficient price formation.
  • Legal definitions:
    • Standardised certificated or uncertificated securities, derivatives and intermediated securities which are
    • suitable for mass standardised trading
    • publicly offered for sale in same structure/denomination or are placed with more than 20 clients

Token and Coin Financing Categories

  • a debt or equity claim on the issuer.
  • Asset tokens promise, for example, a share in future company earnings or future capital flows.
  • Economic function: analogous to equities, bonds or derivatives.
  • Also: Tokens that enable physical assets to be traded on the blockchain

Payment

Asset

Utility

  • intended to provide access digitally to an application or service by means of a blockchain-based infrastructure.
  • Synonymous with cryptocurrencies; intended to be used, now/in future, as
    • a means of payment for acquiring goods or services or
    • as a means of money or value transfer.
  • Cryptocurrencies give rise to no claims on their issuer.

Categories => Securities? (Swiss finma view)

  • treated as a security

  • in pre-financing and pre-sale phases of an ICO, tokens that confer claims to acquire tokens in the future

    • treated as securities

Payment

Asset

Utility

  • if only to pay for application or service:
    • not a security

  • if additionally or only has an investment purpose at the point of issue:

    • => treated as security

  • treated as money
    • => not a security

Secondary features

  • underwriting and offering of a third parties tokens is a licensed activity
    • => must become broker-dealer
  • issuance of tokens with interest-like return promise
    • => deposit character
    • => must obtain a bank license
  • anyone who maintains payment services is subject to AML (not for utility though)

Considerations for Canada

  • Considerations above were for Switzerland
  • If you want to legally run an ICO and
    • reach a large group
    • have it tradable, 
  • then you either
    • need to abide by the strict public offerings rules, or
    • target only accredited investors ("exempt market offering memorandum"), or
    • avoid Canadians/Americans
    • hope that your coin does not get classified as a security.

Case Study 1: KIN

  • closed last year
  • a KIN token for a yet-to-be-issued coin
  • issued by KIK
    • company that had invented the Blackberry Messenger
    • unique model whereby users could unlock features (stickers!!!) if they agreed to, for instance, take surveys or watch ads.
  • KIK want to grow the ecosystem and issued the token to incentivize developers
  • total issue size: ~$90M
  • implied maximal valuation:
    • $1.25 billion
    • seriously???

Case Study 1: KIN

  • comments: from Raquel Jackson on Medium
    • "Everything KIK wants to do can be accomplished with fiat currency or a simple payment integration with their app."

Case Study 2: Tokenfunder

  • currently running
  • their coin is a security and they market it as such
  • has asked for exempt offering memorandum (via OSC LaunchPad)
  • => uses
    • the exempt market
    • applies crowdfunding rules (maximal investment amount)
  • is the first legal asset ICO in Canada

The SAFT protocol

  • Premise
    • utility or payment token is not a security once it is in operation.
    • before operation it is a security
  • Idea:
    • Simple Agreement for Future Tokens (“SAFT”) 
    • limit investor-base before usability to accredited investors by using a forward contract
    • don't worry about the "after"
  • Recent trend:
    • private, Reg-D compliant tokens (almost all 2018 fall under this rule)
    • on-chain "regulator" = limit the addresses that can trade

Source: Harbour (a tech firm)

What is it that an ICO can do that you cannot get elsewhere?

  • Entrepreneur’s vision?
    • => use cryptocurrency investor appetite as a benchmark. 
    • => like crowdfunding, learn product demand.

  • Lower commissions with cryptocurrencies (no intermediaries to feed).

  • Small minimum investment amounts.

  • Global phenomenon, global investor base.

  • Tokens are readily tradable.

  • Can be pre-programmed to carry out the company’s incentive payouts — or returns — as set out in White Papers and Investor Prospectuses.

  • Contingent fundraising.

  • Milestone automation.

What is it that an ICO can do that you cannot get elsewhere?

Common features of ICOs

  • many different sales mechanisms
    • auctions
    • staggered sales (prices increase from phase to phase)
    • usually send money to smart contracts
  • often, you buy a token that you get to use for a coin in the future
  • commonly, there is a foundation that manages future issuance
    • the role of the foundations are often undefined
    • foundations are located in low touch regulation jurisdictions

Economic Considerations I

  • little analytical work on ICOs
  • Gans and Cattelini (March 11, 2018 (!))
    • model as three stage process:
      • Stage 1: offer
      • Stage 2: first round of interaction
      • Stage 3: possible additional issuance of tokens
    • ICO used as a pre-sale mechanism
    • "monetary policy" = possible future issuance
    • Results:
      • crypto tokens reveal consumer demand
      • => "sometimes" entrepreneurial returns with crypto > with traditional equity financing.
      • Lack of commitment in monetary policy can undermine saving

Economic Considerations II

  • formally, an ICO is often like a 
    • small open economy in which
    • means of payment =/ unit of account
  • amount of money in the system affects
    • savings
    • price level
    • speculation
    • goods market production
  • => monetary theory is just as relevant as corporate finance...
  • (working on it ...)

Types of traders

Trading in Equity Markets today

Retail

Institutional

Pro-Traders

Exchanges

Wholesellers

Dark pools

Broker Internalizations

Where does trading occur?

Trading in Equity Markets today

Exchanges

Wholesellers

Dark pools

Broker Internalizations

How does trading work?

Trading in Equity Markets today

(

(

How to access the market?

Trading in Equity Markets today

Retail

Institutional

Pro-Traders

Retail: Canada

Trading in Equity Markets today

Rule: must send to exchange with best price 

Retail: U.S.A.

Trading in Equity Markets today

Exchange

Wholeseller

market order

limit order

In Europe: no best price obligation

Institutions: U.S.A.

Trading in Equity Markets today

Exchange

Dark pools

Pro Traders

Trading in Equity Markets today

Type 2: "borrow" broker-dealer system

Type 1: licenced broker-dealer

risk control

Big Message

Trading in Equity Markets today

  • You commonly don't access the market directly.

  • Brokers take many decisions but they are bound by regulations.

  • Critical: markets are formally linked by best-price rules.

A glimpse of overall infrastructure

Sue wants to sell ABX

Bob wants to buy ABX

sell order

buy order

Clearing House

Stock Exchange

Broker

Broker

3rd party tech

custodian

custodian

record beneficial ownership

central bank for payment

Types of traders

Trading in Crypto Markets

Retail, Institutions, and Pro-Traders are indistiguishable

not clear whether and which institutions are active 

Where does trading occur?

Trading in Crypto Markets

Exchanges

Dark pools

Smart On-chain contracts

Exchanges

Smart Contract

How does trading work?

Trading in Crypto Markets

Order Driven

Market Maker

How do you access the market?

Trading in Crypto Markets

Exchanges

Smart On-chain contracts

Within exchange operation

Trading in Crypto Markets

trade

lend

Settlement

Trading in Crypto Markets

trade

Fully decentralized

... 300 lines of code ...

two warnings 

  • there is no guarantee that people trade against your order, even if you post the best price
  • before becoming active, your order will be publicly visible and so you may get front-run

Summary of workflow

Crypto

Exchange

Traditional

Internalizer

Wholeseller

Darkpool

Investor

Venue

Broker

Settlement

Investor

Venue

Settlement

On chain

Main differences

Trading in Equity vs Crypto

  • regulated environment
  • firm trading rules
  • listing requirements
  • multi-step process
  • complicated settlement
  • many intermediaries

Equity Market

Crypto Market

  • unregulated environment
  • no trading rules - manipulation must be assumed
  • single step process
  • use of intermediaries is a choice
  • crypto exchange are closer to brokerages than equity exchanges
  • settlement a choice and straightforward
  • fully decentralized trading is possible

Web App

(website)

How will smart contracts be used? 

Front end: HTML

Backend

e.g. AWS Ruby

DApp

(decentralized)

Ethererum 

(call to smart contract)

Front end: HTML

We will use remix.ethereum.org

hereafter follows a demo

We will use remix.ethereum.org

https://github.com/blockgeeks/workshop/tree/master/src/contracts

[Old] Blockchain Module Part 3: Moving Along

By Andreas Park

[Old] Blockchain Module Part 3: Moving Along

This deck is for the third of four lectures on Blockchain technology in finance, taught at the Rotman School of Management, Spring 2018; for my 2018/19 classes, I will have split this class into multiple pieces, and this set of slides will become obsolete.

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