presentation on blockchain concepts, personal data ecosystem and possible synergies

1. Personal data and blockchain:
Opportunities and Challenges
Internet of Things Meetup
Guildford, October 4th
Michele Nati
Lead Technologist Personal Data and Trust
Digital Catapult, London
@michelenati

2. Personal Data: Opportunities
• Overall financial
benefit
• £15bn untapped wealth for UK
consumers
• The incentive to share
• 30% of consumers believe “to improve
services and benefit” is the most
important incen5ve for sharing personal
data
• How to incentivize
• 43% said the main incen=ve for sharing
personal data is if it was going to be used
to improve society
Personal Data and Trust Review: h<ps://www.digitalcatapultcentre.org.uk/pdtreview/

3. Personal Data: Barriers
• Trust
• 44% of consumers trust the public sector
most with their personal data
• 2% choose telecoms as the most trusted
sector
• 30% feel the retail sector is not clear on
how use their personal data
• Consent
• 65% of consumers are insure if data is
shared without their consent
• Loosing control
• 76% of consumers feel they have no
control over how their data is shared or
who with
Personal Data and Trust Review: h<ps://www.digitalcatapultcentre.org.uk/pdtreview/

4. Personal Data Ecosystem
• How data can be linked
together?
• How access can be granted
and controlled?
• How all involved parties can
trust each others?
• How the right incentives
can be created?

5. File sharing
• 80 Million Users
• Shutdown 2001, pay $26 Million
• 150 Million Active Users
• 43%-70% of all Internet traffic
• Still active

6. Decentralization
Controlled by one authority
Centralized Decentralized
Controlled community

7. Blockchain? WTF?
h<ps://www.youtube.com/watch?v=eAV2Gjkhztg
What is that “a” with
a ring around it?
Today Show, 1994

8. Blockchain in 2015
h<p://www.gartner.com/technology/research/methodologies/hype-cycle.jsp

9. Blockchain in 2016
h<p://www.gartner.com/technology/research/methodologies/hype-cycle.jsp

10. Blockchain app: Bitcoin
• Decentralized money
• Some benefits
• No transac5on fees
• No single authority
• Worldwide interoperability and exchange
market
• Access to digital currency for unbanked

11. How Bitcoin blockchain works?
Account: Cash
Date Descrip=on Increase Decrease Balance
Oct 1st Balance FWD 50K
Oct 2nd Cash sale 10K 60K
Oct 3rd Paid rent 1K 59K
Oct 4th Salary 1K 60K
Oct 4th Insurance 3K 57K
Oct 4th Cash sale 3K 60K
Ledger

12. How blockchain update the
ledger?
Central ledger Decentralized ledger
L
L L
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L L
L
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13. Blockchain and consensus
L L
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• 10 minutes new block of
transac5ons
• Miners compete for right to
update & get reward (25 BTC,
ca 10UK USD)
• More processing power/more
chance to win

14. Blockchain and consensus
L L
L L
L L
L
L L
L
L
L
L
L
L L
L L
MINER

15. Blockchain and consensus
L L
L L
L L
L
L L
L
L
L
L
L
L L
L L
MINER
Proof-of-Work
• Incen5ve is to play fair not to
cheat
• If 1 cheats, lose its chance; will
be spo<ed and isolated
• If 50%+1 do, network will lose
value, nodes will leave,
transac5ons will stop

16. Blockchain Ecosystem
• Blockchain: business case vs trust case
• Bitcoin: (and alt-coins) interoperable
incentives within the ecosystem
• Smart Contracts: consent management
• Decentralized and Autonomous
Organizations (DAOs): data sharing for
social benefits and causes

17. Do you need blockchain?
1. Consensus – is the use case benefiting from
agreement across all the parties that each
transaction is validated without 3rd party?
2. Provenance – is the maintenance of a
complete audit trail important for the use
case?
3. Immutability – is it important that the trail of
transactions cannot be altered?
4. Liquid trust – is there a need for an agreed
“system of record” trusted by the all network?

18. Blockchain and Personal Data:
An example
Benefits distribution and tracking
• Assign coins with clause on how they are
spent (alt-coin)
• Require to verify identities
Possible Risks (to address):
• (might) Leak privacy on people identity (e.g.
zero-knowledge proof required)
• Pseudonyms could be de-anonymized
• Deal with malicious behavior (in ethical way;
this might require third party authorities)
h<p://www.bbc.co.uk/news/technology-36785872

19. THANK YOU!
#DigiCatapult
info@digicatapult.org.uk
0300 1233 101
Digital Catapult
digicatapult.org.uk
/DigitalCatapult
@DigitalCatapult

20. Blockchain and identity
• Role in the Personal Data ecosystem
• Link all the data to one individual
• Be<er and personalized services – combining different a<ributes
• Identities should be
• Sovereign
• Unique and interoperable
• Verified
• Mul5ple and context-based (mul5ple personas)
• Blockchain role
• (Decentralized) User-managed
• Consensus – new forms of iden5ty (for unbanked)
• Notary func5on - Integrity
• Audit trail – non-repudiable
• Confiden5ality? (requires some thoughts)
(Attributes) Verification might still require 3rd party

21. BC and PD ecosystem:
An example

22. Blockchain evolution
h<ps://www.digitale-exzellenz.de/die-blockchain-evolu5on/
2009 BitCoin blockchain implementa5on
- Criminal ac5vity
- 2016: AML EU regula5on h<p://ec.europa.eu/jus5ce/criminal/document/files/aml-direc5ve_en.pdf

23. Blockchain evolution
h<ps://www.digitale-exzellenz.de/die-blockchain-evolu5on/
2013 Ethereum Smart Contracts presented
- Security and scalability concerns
- July 2015 launch aper crowdsale campaign

24. Blockchain evolution
h<ps://www.digitale-exzellenz.de/die-blockchain-evolu5on/
2016 May daohub.org launch
- DAO hacked
- June 2016 hard fork

25. Blockchain evolution
h<ps://www.digitale-exzellenz.de/die-blockchain-evolu5on/
? ML/AI will run organiza5ons
- What kind of control we need?
- How we guarantee ethical decision?

26. Blockchain evolution
h<ps://www.digitale-exzellenz.de/die-blockchain-evolu5on/

27. Blockchain evolution
h<ps://www.digitale-exzellenz.de/die-blockchain-evolu5on/

28. Governance in decentralized
systems
• Everybody can use blockchain, run smart
contracts, participate to DAOs
• But who takes decisions?
• Currently developers and miners
• SW licenses generally disclaim all liabili5es
• Who should be accountable for malicious
behavior?
• Not yet well-defined
• Shall core developers and miners be considered as fiduciaries? (duty of care,
loyalty and good faith)
• What governance structure will be
required?