Blockchain Fundamentals PDF

Blockchai n Fundamen tals By Dr. Ghassan Alkoureiti Information Systems Department IT College Prepared by Dr. Ghassan 1 Blockchai n Fundamen tals By Dr. Ghassan Alkoureiti Information Systems Department IT College Prepared by Dr. Ghassan...

Blockchai n Fundamen tals By Dr. Ghassan Alkoureiti Information Systems Department IT College Prepared by Dr. Ghassan 1 Blockchai n Fundamen tals By Dr. Ghassan Alkoureiti Information Systems Department IT College Prepared by Dr. Ghassan 2 Learning Objectives 1 2 3 4 5 6 Understand a Be able to describe Explain blockchain Identify which Understand where Discuss some of technical definition blockchain technology to your aspects of blockchain is the most important of blockchain, technology as a clients, friends, blockchain going, how it use cases and including its main part of the broader and business technology seem works, and how to enterprise traits story of trade colleagues most important start preparing for platforms and relevant to it you Prepared by Dr. Ghassan 3 A Foundational Change in Trade Combines many disciplines – such as cryptography, distributed systems architecture, computer science, and economics Barter was one of the first ways to distribute goods 30% still happen in modern trade and services Historically trade depends individual reputations and on informal rules and agreements constraints: Cultural norms Prepared by Dr. Ghassan 4  5 A Foundational Change in Trade Standard Currencies Gold, Silver, Copper substantial amount of work to mine and mint Portable Standard weight Hard to counterfeit currency represents a more formal institution that we developed in order to help lower uncertainty in our trade and expand our ability to transact at a greater scale. Prepared by Dr. Ghassan  Record Keeping and banking A Increase in frequency and complexity of transactions Foundati Allows for accountability Earliest banking regulations – onal Code of Hammurabi (1754 BCE) Change Transaction recorded in stone tablets Storage of valuable in Trade Knights Templar became rich for Medieval banking services across EU and ME Line of credit for travelers Prepared by Dr. Ghassan 6 A Foundational Change in Trade Double Entry bookkeeping Luca Piciolo – father of accounting – 1340 AD provided an error detection mechanism for accounts ensured transparency for all stakeholders Accurate picture of a firm’s financial performance Prepared by Dr. Ghassan 7 A Foundational Change in Trade Imperfect technology Fraud happens 2016 estimate ~=25$ billion Absorbed through credit card processing fees Identity theft and hacking 16 million users' digital identity stolen Grows with more digitalization Middlemen trusted again to process transactions Prepared by Dr. Ghassan 8  A Foundational Change in Trade Web Technology Platform for transactions Amazon, eBay, Alibaba No need for trusted middlemen Global reach Minimize cost Credit card expansion Prepared by Dr. Ghassan 9  Course Focus Blockchai Cryptocurr Ticker Logo n ency Symbols Bitcoin Bitcoin BTC Ethereum Ether ETH Prepared by Dr. Ghassan 10 Defining Blockchain a blockchain is a “decentralized database that coordinates agreement on an append-only history of transactions across a peer-to-peer network” Prepared by Dr. Ghassan 11 What is blockchain? Digital ledger of data; but it is decentralized and permanent. Types of Blockchain Public blockchains Permissioned blockchains Private blockchains Prepared by Dr. Ghassan 12 Decentralized Database Blockchains are intermittently referred to as both decentralized and distributed. A database is simply a collection of data or information. Decentralized database - no single, centralized storage of data and no single authority or system administrator. Distributed database - all the nodes on the network contain information and they are equal and have equal rights. Prepared by Dr. Ghassan 13 Class Discussion* Who uses centralized database? Who is the personnel responsible for the database? Who uses decentralized database? Prepared by Dr. Ghassan 14  P2P Networks* Decentralized network architecture Each node has equal privileges and responsibilities Nodes (peers) act as both clients and servers Enables rapid distribution of large files Done through Seeders and Leachers Illegal file sharing and copyright infringement Examples: BitTorrent, PirateBay, Napster Prepared by Dr. Ghassan 15  Bank Centralized Database Everything is centralized We also trust that the banks will maintain an accurate record of their customers’ accounts. bank’s database and it is the keeper of the “truth.” Prepared by Dr. Ghassan 16 Bank Centralized Database Risk 2016 Wells Fargo banking scandal millions of checking and savings accounts were opened on behalf of clients without their consent Attributed towards aggressive marketing strategy reinforced by executive culture* Prepared by Dr. Ghassan 17  Bank Decentralized Database All of the nodes on the network have a complete copy of all of the banking records No central authority would control the system No one node on the network could exert control over all of the other nodes managing information in the database Closest example is Benefit Prepared by Dr. Ghassan 18 History of Transactions A key feature of blockchain technology is that it is really a specialized kind of database, called a distributed ledger Ledgers are designed to keep track of transactions Data being synced are the most current transactions and accounts Prepared by Dr. Ghassan 19 Peer-to-Peer Network Blockchain is one manifestation of Distributed Ledger Technology (DLT) running on a peer-to-peer (p2p) network using a consensus protocol among the peers (or DLTs share two core features: nodes) in order to come to an agreement about the database. The database is held locally by all the peers that participate as a full node on the network. Group of independent computers that are acting as one. Prepared by Dr. Ghassan 20 Prepared by Dr. Ghassan 21  “Coordinates agreement” Blockchains are community-verified, which roughly translates to “we can all check it” The verification process that all the nodes use to come to consensus is important Replaces the authority held by a central administrator of traditional database. a consensus mechanism allows many participants to maintain one truth together by using protocols, instead of each maintaining separate truths and trying to reconcile them. Prepared by Dr. Ghassan 22  “append- only” only be added to, not deleted immutable or permanent E.g. beginning of library book Prepared by Dr. Ghassan 23 Prepared by Dr. Ghassan Traditional Buying and selling goods and services Which Returning a purchase or calling Kinds of customer support Liking something on Facebook Transacti Exchanging phone numbers ons? Blockchain Blockchain analogous to writing a check “I agree to pay X dollars to Ms. K.” with signature. Blockchain is a series of carbon copies of such transactions. 24  Block = carbon copies of past transactions Which The check is a written document describing a contract Kinds of of sorts, or an agreement on terms. some people also refer to blockchains as an “Internet Transaction of agreements” that describe and execute transactions across a network s? Q: What happens if you did a mistake? Prepared by Dr. Ghassan 25 Prepared by Dr. Ghassan Elements of Blockchain - Nodes Any computer connecting to a blockchain network is a node participating in the network. To become a member of the “community of verifiers,” you have to become a full node. One user can operate multiple nodes on a blockchain Q: Guess the size of the whole Bitcoin blockchain these days. 26  Elements of Blockchain - Nodes How to be a full node? you must have a computing device (hardware) connected to the blockchain network download complete copy of the blockchain (software) Hard disk capacity Prepared by Dr. Ghassan 27 Elements of Blockchain - Nodes The more independent nodes there are, the more control of the network is decentralized and replicated, fostering greater blockchain security. Independe Blockchai Decentraliz nt Nodes n ed Security Prepared by Dr. Ghassan 28 Elements of Blockchain - Block Packaging transactions in a blockchain is a block 1 MB for Bitcoin & 10 minutes to create Blocks created are linked to the previous block via special addressing Blocks represents a chronological history of all the events that occurred in the network alphanumeric address associated with the transaction Prepared by Dr. Ghassan 29 Elements of Blockchain – Block Sample Prepared by Dr. Ghassan 30  Public and Private Keys Asymmetric cryptography built into the blockchain system Individuals use a private key to unlock their address Only share a public key with the others involved in the transaction Private key allows you (and only you) to unlock access to it for making transactions Private key can be used to generate corresponding public key; not vice versa* Private key serves as a digital signature to transactions Q: What happens if you leak your public key? Prepared by Dr. Ghassan 31 Public and Private Keys Prepared by Dr. Ghassan 32 Mining Prepared by Dr. Ghassan 33  Mining As part of the “community of verifiers,” a full node helps validate a blockchain database through a practice called mining. Miners are nodes that perform a certain amount of computational work – racing with each other to solve a mathematical puzzle. Q: But why mine? Prepared by Dr. Ghassan 34  Mining To help keep the P2P network going. A miner successfully solving the puzzle wins the right to contribute the newest block of transactions to the blockchain Gets newly minted coins, tokens, and/or transaction fees of newest block Q: Why award tokens to participating nodes? Prepared by Dr. Ghassan 35 Tokens or Coins Purpose of tokens is to motivate people to participate in a blockchain as a full node and help secure the history of transactions in the database. Does not exist physically; but is generated entirely virtually in blockchain.* Q: Difference between Bitcoin and bitcoin? Prepared by Dr. Ghassan 36  Consensus through Proof of Work Sybil control mechanisms has two consensus mechanism Proof of Work Proof of Stake Both prevent Sybil attacks – when a single adversary controls multiple nodes on a network and has undue influence on that network. Prepared by Dr. Ghassan 37 Sybil Attack Prepared by Dr. Ghassan 38  Attempts to be 51% attack Sybil Attack Blocks other nodes from participating effects Reverse transactions Creates double spending Prepared by Dr. Ghassan 39 Proof of Work Used by Bitcoin Does not totally prevent Sybil But makes it way more difficult to attack achieve You need to own the device which just won creating the newest blockchain Outcome of Proof of Work creates some randomness for articulating which node wins Prepared by Dr. Ghassan 40 Proof of Work Most established means of generating consensus in public permissionless blockchains Uses a lot of energy Bitcoin energy cost estimated to be equivalent if not more than developed countries like: Ireland or Switzerland. Prepared by Dr. Ghassan 41  Proof of Stake* Like PoW, participating nodes validate transactions But: Nodes can participate by pledging their crypto tokens Picking validators depends on the blockchain’s protocol: Some more staked crypto tokens, better chance of validating transactions Some about longer staking results in more chance of earning from transactions fees Others just random node Or combination of all above PoS blockchains include Ethereum (as of 2022), Polkadot, Cardano, Tezos etc. Prepared by Dr. Ghassan 42 Proof of Stake* Compared to PoW: Does not demand high energy consumption Requirement is high for some E.g. Ethereum is minimum of 32 Ether. How much is that today? Risk being slashed Slashing: Lose staked coins due to not correctly validating blockchain Rationale to penalize misbehaving nodes Offending validator can also be ejected from participating Each protocol has its own slashing mechanism Extreme case: lose of all coins; Other do not have any penalty Q: what happens if your device accidently did not properly validate the blockchain? Prepared by Dr. Ghassan 43 Qualities or Characteristics of Blockchains Security Resiliency Immutability Transparency Verifiability Permissibility Prepared by Dr. Ghassan 44 Qualities of Blockchains – Security To hack or tamper with a blockchain, a majority of the nodes would need to be compromised. This is called 51% attack. Larger the network gets, the more difficult it is to alter any transactions stored on its blockchain. Prepared by Dr. Ghassan 45 Qualities of Blockchains – Resiliency All the nodes on the network contain exact copies of the entire blockchain Fault Tolerance – highly unlikely that the system will go down due to power failures, geopolitical issues, weather, or other technical issues Prepared by Dr. Ghassan 46 Qualities of Blockchains – Immutability Once a block of transactions has been added to the chain it cannot be deleted or changed. History of ownership for a particular asset recorded on the blockchain can be easily tracked. Prepared by Dr. Ghassan 47 Qualities of Blockchains – Transparency All of the transactions stored in a blockchain are visible to all of its participants. The history of transactions is also easy to see because each transaction is “time-stamped”. Can also be seen as a nuisance to some. Prepared by Dr. Ghassan 48 Qualities of Blockchains – Verifiability You are who you say you are. People are working on different innovations and tweaks to blockchain structures that allow for levels of transparency or privacy to coexist with verifiability. Prepared by Dr. Ghassan 49 Qualities of Blockchains – permissibility Allow for scoping of who participates in the blockchain. Bitcoin is public permissionless blockchain. Question: What does this mean? Prepared by Dr. Ghassan 50  Types of Blockchains – Public Blockchain Participation is completely open and voluntary. E.g. Wikipedia If a member of the blockchain repeatedly tries to submit invalid transactions, the blockchain community will start ignoring that particular node. Provides traceability – You can authenticate the history of all the changes in ownership of an asset Prepared by Dr. Ghassan 51 Permissioning Blockchain Permissionless blockchains allow for anyone to participate as a node. Just by installing the software and copying the blockchain onto their computers Permissioned blockchains Scoped to a much narrower set of trusted or semi-trusted participants For private blockchains Participants can be from same, or different organizations. Question: Can we have public permissioned blockchain? Prepared by Dr. Ghassan 52  Public Permissioned Blockchain Rare scenarios the database is visible to anyone (read and verify functions). But the write function is limited to a set of known participants. Whether public, private, permissioned or permissionless, a blockchain still requires digital replicas of a ledger that are verified and shared among the participating nodes on a peer-to-peer network. Prepared by Dr. Ghassan 53 The Origins of Bitcoin and Blockchain White Paper published in 2008 by Satoshi Nakamoto. Borrowed concepts from cypherpunks and crypto- anarchists. Peer-to-peer concept for digital cash (like Digicash). Cryptography concepts: Hash chains – allow for a recorded chronology of events (like tweets). Merkle trees – verifying consistency of large data sets. Byzantine Fault Tolerance. Double spending problem – Spending same amount to two entitles. Prepared by Dr. Ghassan 54 Who is Satoshi Nakamoto?* Prepared by Dr. Ghassan 55  Double Spending Problem Unique to digital payments* In real world, you cannot turn around and spend that same dollar on something else. Bitcoin solves the double-spend problem with time-stamps and cryptography. Prepared by Dr. Ghassan 56 Types of Blockchains – Private Blockchain Businesses started to become especially interested in creating private blockchains. Want the operational benefits of blockchain technology e.g. shared reality But without opening themselves and their data to the world. Reading and writing capabilities are scoped to a set of participants, (not publicly accessible). Useful to learn in a more controlled sandbox. Prepared by Dr. Ghassan 57 Blockchain and Economics This is true for two distinct reasons: 1. Blockchains create a shared reality that is used for many kinds of economic transactions: between individuals, firms, and even objects. 2. The incentives baked into blockchain architecture (e.g., earning fractional token rewards for mining) require analysis from an economic perspective to make sure the system is not gamed or threatened by externalities Game theory are mathematical models on how rational actors will behave when one person’s loss represents another’s gain. Prepared by Dr. Ghassan 58 Lowering Uncertainty in Trade Value – a measure of the benefit of a good or service Usually measured in units of some currency Instead of using a bank or marketplace platform as a brokering source of trust, we can use a network like the Bitcoin blockchain to directly transfer value between two accounts. E.g. Mortgages – replacing the management of mortgages (and its inherent fees), with automated execution without error using the technology of blockchain. Prepared by Dr. Ghassan 59 Changing the Role of the Firm: A Nexus of Smart Contracts? Some economists view a company or a firm as a collection of contracts A contract is generally the terms of an agreement between parties that is legally enforceable Company can be thought of as a large organizational chart We can use blockchain technology to encode these relationships and agreements Prepared by Dr. Ghassan 60 Organizational chart Prepared by Dr. Ghassan 61 Smart Contract A smart contract is basically a small computer program that runs on a blockchain. Smart Contracts also called “Dapps” (Decentralized Applications) Contains a series of “if-then” statements Smart contracts is a way to lower uncertainty by coding the rules of various transactions into autonomous, if-then or “programmable transactions,” E.g. betting on matches. Uses API called Oracle in FinTech* (Application Programming Interface) Prepared by Dr. Ghassan 62 Decentralized Autonomous Organizations DAO a collection of smart contracts that could be used to create a set of interlocking rules for a digital corporation. DAO are also interchangeably called DACs (Decentralized Autonomous Corporations) Examples: DASH The DAO Prepared by Dr. Ghassan 63 The DAO* “The DAO” was crowd-funded in 2016. Built on the Ethereum platform. Code is open source. Designed to be a traditional venture fund that accepted proposals for projects to be built on Ethereum. Smart contract code governing The DAO enabled owners of DAO-tokens to vote on submitted projects through the blockchain and then automatically appropriate funds to those winners. The DAO token is effectively defunct. Prepared by Dr. Ghassan 64  The DAO and Ethereum Classic story* In June 2016, users exploited a vulnerability in The DAO code to enable them to siphon off one-third of The DAO's funds to a subsidiary account. The Ethereum community was split: Should we revert to state before hack? Or continue as is? Vitalik and his team decided to hard fork the Ethereum blockchain to restore virtually all funds to the original state Others believed that such intervention goes against decentralization ethos. So they continued with the original unforked blockchain, which is called Ethereum Classic. Prepared by Dr. Ghassan 65 Ethereum Classic* “Code is Law” 51% attack in January 2019 and July 2020. Made fake transactions. “Double Spending”. Solved with Thanatos upgrade. Still uses PoW despite efforts to migrate* Prepared by Dr. Ghassan 66 Smart Contract Uber made a $50 billion business out of connecting drivers with riders in an easy-to-use mobile app. Involves setting standards of payment, processing transactions, providing feedback mechanisms on drivers and riders, marketing and using algorithms to optimize routes, time, and rates. If we could create a smart contract template that contains the necessary terms of agreement between riders and drivers, it might be possible to disintermediate Uber itself. Could be run on a permissioned blockchain with a vetting procedure (or necessary conditions) Q: Do you agree of disintermediating Uber? Prepared by Dr. Ghassan 67 Types of Applications of private blockchain: Healthcare Blockchains – Financial Services Private Digital Identity Blockchain Supply Chain Management Prepared by Dr. Ghassan 68 Growing interest among businesses and governments Banks are investing heavily in permissioned DLTs/blockchains to cut their operational costs. transact across a shared truth or reality rather than comparing their separate databases with one another regularly. Organizations form and collaborate as industry consortia by applying federated or consortia blockchain applications E.g. BlockRisk framework: Using the consortia model allow sharing insurance claims information, without disclosing anything proprietary + without giving control to a single company Prepared by Dr. Ghassan 69 Blockchain and Insurance Application Prepared by Dr. Ghassan 70 Apps vs. Dapps Prepared by Dr. Ghassan 71 Hurdles for Blockchain Adoption Bitcoin – gen 1.0 Ethereum – gen 2.0 a more generalized blockchain that uses smart contracts to program transactions DFINITY – gen 3.0 ‘Internet Computer’ mega project with aim of migrating everything to blockchain* Prepared by Dr. Ghassan 72  DFINITY (ICP)* Uses The Internet Computer Protocol (ICP) token Consensus mechanism is special blend of PoS and PoW Vision to host all web content in decentralized nodes Prepared by Dr. Ghassan 73 Hurdles for Blockchain Adoption Entrepreneurs and technologists are tweaking the original model of Bitcoin to optimize for Privacy (Zcash) Transaction throughput and scalability (Litecoin) Programmable transactions (Ethereum, Solana) Chain interoperability (Cosmos, Plasma, Polkadot) Enterprise-oriented constructs (Corda, Hyperledger Fabric, etc). Prepared by Dr. Ghassan 74  Q: Why is blockchain a trilemma? Blockchain Trilemma Prepared by Dr. Ghassan 75 1. Blockchains are not scalable Every node processes all transactions and stores all states of a blockchain. more nodes does not make a blockchain more efficient. Ethereum ~7-15 transactions/sec Bitcoin to ~3-7 transactions/sec Question: How much Visa processes transactions/sec? Solutions: Off-chain processing; 2nd Layering Prepared by Dr. Ghassan 76 2. Blockchains pose privacy and confidentiality risks in transactions Public blockchains – visible to all Private/permissioned allow you to delineate how and what information is visible to whom. Solutions: Zero-Knowledge Proofs. Secret Storages Prepared by Dr. Ghassan 77  3. Blockchains are not interoperable Interoperability – Ability for contracts and transactions to reference one another across different blockchain architectures. “Internet of Blockchains” is an overall dream More interoperable is important for enterprise usage in the long term. Solutions: Parent-child chain formations (e.g. Plasma) Inter-chain settlement layers (e.g. Polkadot) Prepared by Dr. Ghassan 78 World of cyberpunks, cypherpunks, and cryptoanarchists Prepared by Dr. Ghassan 79 Silkroad Marketplace* Prepared by Dr. Ghassan 80 Business of Blockchain Many different blockchain “use cases.” “Use case” as a thumbnail description of the application and the problem it is attempting to solve. Prepared by Dr. Ghassan 81 Asset Tracking For a tangible asset, it may be important to accurately know its identity, provenance and certification. E.g. Food alert related to an E-coli outbreak affecting romaine lettuce Ability to quickly and efficiently track assets such as conflict-free diamonds, pharmaceuticals, artwork, land, and food all the way from the producer to the consumer Notarize the intellectual property of songs using a blockchain. It would be verified and assigned a unique identifier. Manage and fairer redistribution of royalties. E.g. Imogen Heap licensed her 2016 song Tiny Human using an Ethereum-based smart contract Prepared by Dr. Ghassan 82 Identity Management “self-sovereign identity” and refers the goal that attributes about you are certified (written) and stored once, but referenced (read) as many times as needed without necessarily sharing any such information publicly. E.g. similar to the CPR Smart Card By managing your personal identity on a blockchain via smart contracts, you can decide how much information you want to share with companies. Cookies and login credentials do not verify the KYC (“Know Your Customer”) Governments require organizations keep records of the identities of people for tax purposes and to flag potential money laundering and terrorism- financing Prepared by Dr. Ghassan 83 Internet of Things (IoT) Integration “Smart” objects engage with data using the Internet. Smart homes, autonomous vehicles etc. Smart objects will be identified on a blockchain and will have their own wallets (accounts) and smart contracts Transact with other smart objects based on rules and protocols. Potentially even negotiate deals and pay for them. Your solar power system could pool with a decentralized power exchange to sell any extra power that your panels generated. Prepared by Dr. Ghassan 84 Decentralized Autonomous Supply Chains Implementing smart objects and smart contracts across a supply chain can lead to a more frictionless and ultimately automated supply chain, where the rules and decisions can be codified. Walmart and Maersk experimenting with blockchaining. Blockchain can be used to: verify the provenance and identity of an asset log and execute transactions over time improve both supply chain efficiency and responsiveness. Prepared by Dr. Ghassan 85 Enterprise Blockchain Platforms A blockchain platform is a group of technologies that incorporate tools such as templates and APIs that make it easier to develop and launch blockchain applications. Ethereum, Hyperledger, Ripple, Quroum etc. Prepared by Dr. Ghassan 86 Enterprise Blockchain Platforms Prepared by Dr. Ghassan 87  Ethereum Created by Vitalik Buterin in 2014 (born in 1994) Generalized blockchain Use smart contracts to create programmable transactions that represent more than only financial transactions. Ethereum is a permissionless and public blockchain. Miners earn using PoS block validation as of 2022 (was PoW since inception)* Digital token – Ether (Q: What is its price now?) Most adopted altcoin (i.e., all non-bitcoins) Many blockchains stem from Ethereum protocol for its smart contract Prepared by Dr. Ghassan 88 Corda Developed by R3 in 2015 open-source permissioned blockchain platform. Sharing of data is done through contracts established between the participants. Corda does not use any digital tokens i.e., no native cryptocurrency. But does support smart contracts. Originally designed for the banking industry. Now application in insurance, healthcare and supply chain. strong industry consortia backing it. Prepared by Dr. Ghassan 89 Hyperledger Fabric 2016 – by 30 corporates. Promoted by IBM Hosted by Linux Foundation. So Open-Source. No native cryptocurrency Contains more modular blockchain components. New blockchain solutions could be created that allow for easy variations in the consensus algorithms and membership parameters. Prepared by Dr. Ghassan 90 Ripple 2012 designed for financial services industry Cryptocurrency is XRP Popular with banks because it is designed to make global financial transactions nearly free 0.00001 XRP* (Q: How much is 1 XRP?) 100 billion supply cap* XRP claims to minimize liquidity costs of international exchanges and is popular for cross-border payments. (SWIFT- 2.0)* Q: What does liquidity cost mean? False claims and investigation by SEC* Q: What do SEC do? Prepared by Dr. Ghassan 91  SEC regulates securities markets to protect investors SEC took Ripple to Court in 2020 SEC vs Accusation – XRP is a security. Hence, should be regulated Ripple* 2023 Ruling – XRP is considered security if sold directly to institutions, but no issue with retailers Prepared by Dr. Ghassan 92  Ethical and Other Issues with Blockchain What does it mean to have a global database (or computer) without a central authority that anyone can leverage to execute transactions? Dark web transactions; pump and dump; rag pulls Who should be held responsible (if at all) for loss of funds or errors in code? E.g. The DAO Prepared by Dr. Ghassan 93  Unsophisticated users could be vulnerable to abuse and end up making sensitive data unwittingly public (and permanent), or losing funds. Ethical E.g. participating in Ponzi schemes* and Other Social media cryptocurrency giveaway scams* Issues with Blockchai n Prepared by Dr. Ghassan 94  Pump and Dump* It is a form of rug pull scam dupe participants to purchase crypto token by spreading misinformation Scammers already own substantial crypto token Scammers deceive other pump and dump participants to buy* Sell in bulk when prices sky high and disappear Not exclusive to crypto world; Illegal with fiat Crypto tokens are still largely unregulated E.g. Squid games cryptocurrency hype 1 cent to 2800$ to few cents in minutes Prepared by Dr. Ghassan 95  Ethical and Other Issues with Blockchain Use of cryptocurrencies to finance what are being called “assassination” bounty markets a beating going for $2,000. Death by torture costs $50,000* Requester contribute tokens to a pool. Others can pitch in* Dark web hitman websites mostly scams* Assassins could collect the bounty without revealing their identity By sharing the private key once the requester is satisfied* Prepared by Dr. Ghassan 96 End of Any Questions? Comments? Concerns? Chapter Crypto-questions? Prepared by Dr. Ghassan 97