Lecture 7 - Blockchain Applications in various sectors and Decentralized Institutions

Question 1

Give an example of “Smart property”

Answer 1

Step 1: car controlled by a cryptographic key

Car has public key hard-coded

Activated upon receiving message signed by corresponding private key

Step 2: public key is dynamically updated based on Bitcoin block chain

Alice owns the car because she controls private key of green Tx output

Now Bob’s key activates car

Step 3: Create a single transaction that combines Bob’s payment to Alice and Alice’s ownership transfer to Bob

Alice and Bob sign separately, then broadcast

This is “Decentralized property ownership”

Question 2

What are the levels of (de)centralization?

In order least to most decentralized

Answer 2

Single mandatory intermediary

Multiple competing intermediaries

“Threshold” of intermediaries

No intermediary

Question 3

What is “idea of Assertions about the outside world?”

Answer 3

Idea: add a mechanism to assert facts 
○election outcomes 
○sports results 
○commodity prices 
●Bet or hedge results using smart contracts 
●Forwards, futures, options...

Most general formulation: prediction market

Question 4

What is a social business?

Answer 4

Social Business (SB): (NGO/NPO) 
•business model for investments for social causes such as poverty removal and welfare activities that are not attractive to traditional profit-based business models 

•primary goal is socio-economic development of the under-privileged

•SB gets funds from sponsors/social investors who may be
individuals, philanthropic foundations etc. to carry out the socio-
economic development projects

•to continue to sustained development activities, SB needs to have
continuous flow of funds from sponsors/social investors, which
needs a lot of trust in SB

Question 5

What are some Opportunities with Blockchain in social business?

Answer 5

Trust Factors: lot of trust into the operations of SB

Transparency: lot of transparency in operations of SB

Privacy: having transparency in the system does not
necessarily leads to privacy violations

Decentralisation: inherently distributed so few advantages

Auditability : many opportunities for auditing operations of blockchain

Example: Kræftens Bekæmpelse - Where does the money go?

Question 6

What are some challenges for blockchain in social business?

Answer 6

Digital Asset / Cryptocurrency: a native cryptocurrency
•will have challenges related to exchange with Fiat & other cryptocurrencies and also need to deal/comply with lot of financial registrations/regulations

Infrastructure and Deployment :
•SB needs to find suitable professional, technical help to develop the solution
+ needs suitable infrastructures and nodes to run and mine the blockchain
at least initially

Training and Adoption : Adopting to new technologies like blockchain and smart contracts takes time and resources + need proper training and orientation to adopt to the new ways of interactions