iotmeetupguildford#20: michele nati, personal data and blockchain: opportunities and challenges,...

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

Personal Data: Opportunities

•  Overall financial benefit

•  £15bnuntappedwealthforUKconsumers

•  The incentive to share •  30%ofconsumersbelieve“toimprove

servicesandbenefit”isthemostimportantincen5veforsharingpersonaldata

•  How to incentivize •  43%saidthemainincen=veforsharing

personaldataisifitwasgoingtobeusedtoimprovesociety

PersonalDataandTrustReview:h<ps://www.digitalcatapultcentre.org.uk/pdtreview/

Personal Data: Barriers

•  Trust •  44%ofconsumerstrustthepublicsector

mostwiththeirpersonaldata•  2%choosetelecomsasthemosttrusted

sector•  30%feeltheretailsectorisnotclearon

howusetheirpersonaldata

•  Consent •  65%ofconsumersareinsureifdatais

sharedwithouttheirconsent

•  Loosing control •  76%ofconsumersfeeltheyhaveno

controloverhowtheirdataissharedorwhowith

PersonalDataandTrustReview:h<ps://www.digitalcatapultcentre.org.uk/pdtreview/

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?

File sharing

•  80 Million Users •  Shutdown 2001, pay $26 Million

•  150 Million Active Users •  43%-70% of all Internet traffic

•  Still active

Decentralization

Controlledbyoneauthority

Centralized Decentralized

Controlledcommunity

Blockchain? WTF?

h<ps://www.youtube.com/watch?v=eAV2Gjkhztg

Whatisthat“a”witharingaroundit?

TodayShow,1994

Blockchain in 2015

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

Blockchain in 2016

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

Blockchain app: Bitcoin

•  Decentralized money •  Some benefits •  Notransac5onfees•  Nosingleauthority•  Worldwideinteroperabilityandexchange

market•  Accesstodigitalcurrencyforunbanked

How Bitcoin blockchain works?

Account:CashDate Descrip=on Increase Decrease BalanceOct1st BalanceFWD 50KOct2nd Cashsale 10K 60KOct3rd Paidrent 1K 59K

Oct4th Salary 1K 60KOct4th Insurance 3K 57KOct4th Cashsale 3K 60K

Ledger

How blockchain update the ledger?

Centralledger Decentralizedledger

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Blockchain and consensus

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•  10minutesnewblockoftransac5ons

•  Minerscompeteforrighttoupdate&getreward(25BTC,ca10UKUSD)

•  Moreprocessingpower/morechancetowin


L L

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MINER


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MINER

Proof-of-Work•  Incen5veistoplayfairnotto

cheat•  If1cheats,loseitschance;will

bespo<edandisolated•  If50%+1do,networkwilllose

value,nodeswillleave,transac5onswillstop

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

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?

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

THANK YOU!

#DigiCatapult

[email protected]

0300 1233 101

Digital Catapult

digicatapult.org.uk

/DigitalCatapult

@DigitalCatapult

Blockchain and identity

•  Role in the Personal Data ecosystem •  Linkallthedatatooneindividual•  Be<erandpersonalizedservices–combiningdifferenta<ributes

•  Identities should be •  Sovereign•  Uniqueandinteroperable•  Verified•  Mul5pleandcontext-based(mul5plepersonas)

•  Blockchain role •  (Decentralized)User-managed•  Consensus–newformsofiden5ty(forunbanked)•  Notaryfunc5on-Integrity•  Audittrail–non-repudiable•  Confiden5ality?(requiressomethoughts)

(Attributes) Verification might still require 3rd party

BC and PD ecosystem: An example

Blockchain evolution

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

2009BitCoinblockchainimplementa5on-  Criminalac5vity-  2016:AMLEUregula5onh<p://ec.europa.eu/jus5ce/criminal/document/files/aml-direc5ve_en.pdf



2013EthereumSmartContractspresented-  Securityandscalabilityconcerns-  July2015launchapercrowdsalecampaign



2016Maydaohub.orglaunch-  DAOhacked-  June2016hardfork



?ML/AIwillrunorganiza5ons-  Whatkindofcontrolweneed?-  Howweguaranteeethicaldecision?

Governance in decentralized systems •  Everybody can use blockchain, run smart

contracts, participate to DAOs •  But who takes decisions? •  Currentlydevelopersandminers•  SWlicensesgenerallydisclaimallliabili5es

•  Who should be accountable for malicious behavior?

•  Notyetwell-defined•  Shallcoredevelopersandminersbeconsideredasfiduciaries?(dutyofcare,

loyaltyandgoodfaith)

•  What governance structure will be required?

iotmeetupguildford#20: michele nati, personal data and blockchain: opportunities and challenges,...

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