The City of Zug is a well mentioned city in the media recently. It is a very ordinary city in Switzerland with around 30,000 people living there. But things changed. Zug is a special city when it comes to low taxes what was recently exploited through so called ICOs, otherwise known as Initial Coin Off erings. It is a new way of crowdfunding
with crypto-currencies. During this year, the VC seed capital raised through ICO surpassed the classical IPO markets, drawing the attention to this topic especially from regulators all over the world This, and Zug’s fresh air with its lovely lake are why it has
attracted many entrepreneurs, including the Ethereum Foundation, to settle down there, making it the crypto valley of switzerland.

Zug is not only the crypto valley of switzerland but becomes also a cutting edge smart city. Zug is one of the fi rst cities having a cryptocurrency ATM as well as introducing uPort a “self sovereign identity solution” on the blockchain. Yes, you read it right! You can Issue your own ID and go to the city center to get it verifi ed. It’s an smartphone
app, supported on Android and iOS. It is created by consensus and aims to give ownership of your identity and data right back into your own hands where it rightfully should belong.

“A newly created identity is not really valuable… but it becomes more valuable when you interact with more parties, and they can attest to some things, whether it is a bank or a city” - Rouvn Heck, uPort lead developer

The idea of an open identity standard makes it very attractive for collaboration. It means that any city which like the idea of using uPort as an open Identity standard can have its own deployment without paying license fees. If a feature is missing, this can be added and any other party using that software would benefi t from that development. A scarcity of fi nancial resources is a common problem for cities. In addition to that, there is a huge scarcity of professionals as well. A way to get additional access to resources can be the local universities to collaborate with, what gives them the great opportunity to have students being involved in open source projects like uPort developing new use cases.

As the City of Zug is a great example how blockchain can create a new industry and attract young and intelligent people and skilled professionals. Following that example the City of Mittweida (With a population of 15k people and 7k students) decided to dedicate themselves to be a playground for blockchain related startups and studies.

Connected existing knowledge and competence together, the “Hochschule Mittweida” University of Applied Sciences is planning to have it’s Master Degree on Blockchain ready next July. In Addition to that the University created their Blockchain Competence
Center (BCCM) on the 14th of July, 2017 to connect applied sciences with an incubator program to attract new startups for the city.

With the Blockchain Autumn School the BCCM of Mittweida was able to attract people from all over Germany to actually have their first experience in trading Bitcoins, Ether, using Smart Contracts and Sharing Ideas how to apply that technologies. With a competition of over 22 participants and a price value of accumulated eight hundred euro the last day of the autumn school fi nished up, presenting exciting new ideas. Will be the future assessment cen-ters based on the blockchain? Can it help to fi nd a organ donor in time? What are the options to secure intellectual property with it?
The options seem to be unlimited.

The Company Slock.it with Christoph Jentz as the CEO is also based in Mittweida. With him, Mittweida hosts one of original coreteam-Developers of the Ethereum Foundation. Slock.it produces smart-locks secured by Smart-Contracts based on
Ethereum. Giving you the possibility to securely rent a lock with your digital identity.

Do you know what Identity Solution they might use? If you guessed uPort you are right! Furthermore the Director of the BCCM is looking forward to follow the example of Zug to have the first implementation of the uPort Identity Service in a German
city.

The Major Ralf Schreiber and Dr. Prof. Ittner, the diwrector of the BCCM made clear statements that they provide the circumstances needed to develop the city and make it as attractive to blockchain startups and ideas as Zug is.

Blockchain & sharing economy

Peter, is a 35 year-old Law consultant living in your city.
He loves biking, and has an expensive bike in his garage.
But, he doesn’t have enough time during the weekends to
enjoy riding it, as he spends most of his weekends traveling to business meetings all over the world. Jimmy, is a high- school student living two blocks from Peter’s. He also loves biking, but can’t aff ord to buy a bike like Tim’s to make his biking experience more pleasurable. Now, I know exactly what you’re thinking. You’re thinking how nice it would be if Jimmy could use Peter’s bike when he’s away. This is one of the things that could be securely achieved by using the blockchain technology. The blockchain eliminates the need to rely on a trusted third-party service provider to keep the bike secure and guard against damages or theft. Jimmy uses his smartphone app to search for available bikes in his
city and fi nds that Peter’s bike is available to rent. He sends a deposit to the ‘smart contract’ that controls the IoT lock on Tim’s bike. The smart contract now grants access to Jimmy to use Peter’s bike with a single button press on his smartphone. Jimmy can now enjoy riding Peter’s bike for a few hours and deliver it back in Peter’s house once he’s fi nished. With another button press, Jimmy can securely deliver the bike back to Peter and the smart contract calculates the rent for the time Jimmy has used the bike, subtracts it from the deposit and transfers the remaining amount back to Jimmy. What if, we could do the same for virtually any device/application/ service we’d like to share? All of it possible with the blockchain.

Written by Jensun Richie : Mathematician and Programmer

A technical introduction to the history of Blockchains

From Jensun Richie : Mathematician, Programmer and Blockchain Enthusiast

In 1994, Adam Back (British Crypto-Scientist) had an idea to “charge” e-mails with computation, in an attempt to curb spam emails. Before anyone could send an e-mail, their device would have to solve a puzzle. A very interesting property of those puzzles is that it takes a non- trivial amount of computational power and time to fi nd a solution to, but is extremely easy to verify its solution. By solving such a puzzle, the device therefore proves that it has indeed “spent” certain resources. Such a proof is called a “proof of work”. Unfortunately, this not only discouraged spammers, but also legitimate bulk e-mailers; and the idea was soon forgotten. Other artifi cial intelligence techniques later replaced the spam classifi cation problem. Several years later, in
2008, an unknown person under the pseudonym of Satoshi Nakamoto, used the “proof of work” to solve two very diff erent problems simultaneously. One is the “double-spending” problem of digital currencies, and the other is the “consensus” problem. This was the birth of Bitcoin and the Blockchain. Let’s understand it piece by piece. A block is simply a collection of “transactions” and other meta-information. The blockchain is, as the name suggests, a chain of these blocks. A participant of the Bitcoin network, is allowed to add a new block to the blockchain with a valid proof-of-work. In doing so, the participant is rewarded with new bitcoins in exchange for the computational
expenditure. This is how new bitcoins are mined. And, such participants of the network, who take interest in winning them are called miners. Let’s now consider a practical scenario where one might want to use a crypto-currency to buy goods and services. There’s a pizzeria in your neighborhood that accepts bitcoins. You buy a pizza, and pay for it with bitcoins with your smartphone. This transaction is propagated throughout the bitcoin network and added to a transaction pool. The miners now pick transactions from this pool to form a block, and engage in a global competition, trying
to fi nd a solution to the proof-of-work puzzle to earn the right to extend the blockchain with their new block and earn the bitcoin reward. It takes, on average, ten minutes for a block to be added to the bitcoin blockchain. Once your transaction is part of a block in the blockchain, your local pizzeria can verify it and give you your pizza. The more blocks the blocks that are added to the blockchain after the block containing your transaction, the more secure it is. Secure, in this context means, more resistant to change.

Soon, all sorts of ideas started emerging. People began to realize the true potential of the blockchain revolution. In 2013, the Ethereum project was born. Ethereum is an open platform for creating new blockchain applications on top it. Ethereum does this by building what is essentially the ultimate abstract foundational layer: a blockchain with a built-in Turing-complete programming language, allowing anyone to write “smart contracts” and decentralized applications where they can create their own arbitrary rules for ownership, transaction formats and state transition functions. Note that „contracts“ in Ethereum should not be seen as something that should be „fulfi lled“ or „complied with“; rather, they are more like „autonomous agents“ that live inside of the Ethereum execution environment, always executing a specifi c piece of code when „poked“ by a message or transaction. In general, there are three types of applications
on top of Ethereum. The fi rst category is fi nancial applications, providingusers with more powerful ways of managing and entering into contracts using their money. This includes sub-currencies, fi nancial derivatives, hedging contracts, savings wallets, wills, and ultimately even some classes of full-scale employment contracts. The second category is semi-fi nancial applications, where money is involved but there is also a heavy non-monetary side to what is being done; a perfect example is self-enforcing bounties for solutions to computational problems. Finally, there are applications such as online voting and decentralized governance that are not fi nancial at all. A “Decentralized Autonomous Organization” or DAO, in short, is an interesting
example. It can be thought of as a virtual entity that has a certain set of members or shareholders which, perhaps with a 67% majority, have the right to spend the entity‘s funds and modify its code. The members would collectively decide on how the organization should allocate its funds. Methods for allocating a DAO‘s funds could range from bounties, salaries to even more exotic mechanisms such as an internal currency to reward work. This essentially replicates the legal trappings of a traditional company or nonprofi t but using only cryptographic blockchain technology for enforcement. One of the simplest of such designs is a piece of self-modifying code that changes if two thirds of members agree on a change.

: Stay tuned and follow our upcoming articles to learn aboutthe latest ideas and developments and how you can become  part of it. Please let me know, if you would like to read about a specifi c topic. Feel free to ask your questions and send your
feedback to tim@inblock.io

Your Tim Bansemer : Blockchain Enthusiast and Consultant,Founder of inblock.io - Blockchain Consultation, Training and POC’s. IT Security Professional @tim_Bansemer