Cryptocurrencies, Blockchain & Smart Contracts: The New Wave of Decentralization
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This document discusses the rise of cryptocurrencies, blockchain technology, and smart contracts as part of a new wave of decentralization. It describes how blockchain acts as a distributed public ledger that allows for trustless peer-to-peer transactions. Blockchain has the potential to disrupt traditional financial institutions and facilitate applications like digital identity, supply chain management, and decentralized organizations. The document outlines several scenarios for how cryptocurrencies and decentralized technologies could develop in the future.
Cryptocurrencies, Blockchain & Smart Contracts: The New Wave of Decentralization
- 1. Cryptocurrencies, Blockchain & Smart Contracts: The New Wave of Decentralization 1 Raffaele Mauro Managing Director Endeavor Italy UAEU November 2016
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- 3. 3 Technology Finance & Venture Capital Policy Innovation Cryptofinance, Smart Contracts & Bitcoin
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- 7. I - Digital Content III – Financial & Political Institutions II - Physical Goods The 3 Waves 7
- 8. The First Wave: Digital Content Publishing Music 8
- 9. Disrupting Business Models 9Source: Internet Trends – Mary Meeker
- 10. The Second Wave: Physical Goods Transportation Housing 10
- 11. The Third Wave: Financial Institutions 11
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- 14. 14 Peer to peer lending Crowdfunding Disintermediation: from underground to mainstream
- 15. 15 Alt & Virtual Currencies
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- 22. 22 October 2016 Wallets 13+ M 3x Since 2014 Transactions / Day 197,000 Transaction volume ($) $ 116,1 M Market capitalization $ 11,8 Bn Merchants 100,000 Microsoft, Expedia, PayPal Hashrate ≈2,107,000,000 Gh/s -13x Since 2014 VC Investments all time $ 1,3+ Bn N° of VC backed startups 148 Open source finance goes big
- 23. 2014 -> Price drops + institutional acceptance Mark Andreessen – Tim Draper – Fred Wilson: Bitcoin today is like the Internet in 1994 23
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- 25. Distributed public ledger Network of communicating nodes sharing a public transaction database 25
- 26. 26 Cryptography & transactions • Private key: – Digital signature – Allows spending • Public key: – Allows signature verification – Represents the wallet address • Transactions are published in the blockchain
- 27. 27 Blockchain • Aimed at proving transactions • Contains all transaction history • Blocks record recent transactions + connected linearly • Longest chain enables verification / trust • Generates the “arrow of time = Solves the synchronization problem in decentralized networks
- 28. Mining • Miners solve complex computational problems • Mining enables transaction validation + block generation • Bitcoins released algorithmically • Fixed amount of Bitcoins every 10 mins 28
- 30. Effects • Decentralized, peer to peer trustless system • Not dependent on central banks/governments/big corporations • Full transparency + pseudonomity • Cryptographically secure • Resilience to marketplace failures • Viral growth 30
- 31. Limits • Rigid monetary supply => Volatility • 51% Attack vulnerability • Reliance on third parties • Block-Size / Fork problem • Path dependence • Inequality • Transaction speed • Non-neutrality / political implications • Other network vulnerabilities 31
- 32. 32 Gini coefficient > ~0.8
- 33. Remittances • Half of the world population is unbanked • Average remittance commission for African migrants > 12,5% 33
- 34. How to get bitcoins 34
- 35. How to easily trade €/$ with Bitcoins 35
- 37. Ecosystem 37
- 38. 38 Example: Coinbase Raised $106.7 Million in 4 Rounds Coinbase lets any consumer to create a Bitcoin wallet and start buying/selling Bitcoin instantly by connecting their bank account 2012 Seed Round $ 600 K 2013 Series A $ 6,1 M 2013 Series B $ 25 M 2014 Series C $ 75 M Investors include New York Stock Exchange, Andreessen Horowitz, Union Square Ventures, Draper Fisher Jurveston, Y Combinator
- 39. Accelerator & Investors Generalist Specialized Venture & Growth Early Stage 39
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- 41. 41 Tech giants
- 47. The first dedicated academic journal 47
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- 50. 21: The first Bitcoin computer 50
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- 55. 55 The Blockchain / Bitcoin 2.0 wave
- 56. 56Source: Startup Management, William Mougayar
- 58. Use cases 58 • App Development: Proof of ownership of modules in app development • Digital Content: Proof of ownership for digital content storage and delivery • Ride-Sharing: Points-based value transfer for ride-sharing • Digital security trading: Ownership and transfer • Digitization of documents/contracts: Digitization of documents/contracts and proof of ownership for transfers • Decentralized storage: Decentralized storage using a network of computers on blockchain • Company incorporations: Digitizing company incorporations, transfer of equity/ownership and governance • Decentralized Internet and computing resources: Decentralized Internet and computing resources to cover every home and business • Home automation: Platform to link the home network and electrical devices to the cloud • Digital identity: Provides digital identity that protects consumer privacy • Escrow/custodian service: Escrow/custodian service for the gaming industry; loan servicing and e-commerce • IT portal: A smart contract IT portal executing order fulfillment in ecommerce/manufacturing • Patient records: Decentralized patient records management • Digitizing assets: Improves anti-counterfeit measures • Reputation management: Helps users engage, share reputation and collect feedback • Prediction platform: Decentralized prediction platform for the share markets, elections, etc. • Authenticity of a review: Enables authenticity of a review through trustworthy endorsements for employee peer reviews • Marketplace for sales and purchases of digital assets: Proof of ownership and a marketplace for sales and purchases of digital assets Source: Let’s Talk Payments
- 60. On the top of the blockchain 60
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- 65. 65 Hyperledger
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- 67. 67 R3
- 68. 68Source: Richard Gendal Brown
- 80. 80 Research & Open Applications
- 82. Platform for executing user-generated smart contracts and decentralized applications 82 Decentralized Programming Language and Universal Platform
- 83. 83 Scenarios for cryptofinance & decentralized technology Basic: - Cryptofinance as sub-industry of Fintech innovation Optimistic: - Blockchain as the new payment layer of the Internet, like SMTP for email - Internet of Things powered by blockchain technologies Pessimistic: - Bubble & crash in cryptoasset (second mega-bubble) - Bubble & crash in VC in vestments in Bitcoin startups Utopian / Dystopian: - Decentralized technology radically disrupts governments, organizations and financial institutions
- 85. Profile Raffaele Mauro, Ph.D. Raffaele Mauro is passionate about technology, policy and global finance. Now Managing Director at Endeavor Italy, he is focused on high-impact entrepreneurship and venture capital, providing companies access to smart capital, talent and markets. Previously he was Head of Finance for Innovation & Entrepreneurship at Intesa Sanpaolo and worked at venture capital funds such as P101 Ventures, Annapurna Ventures and OltreVenture. Raffaele holds an MPA from Harvard University, a Ph.D. from Bocconi and is alumnus of the Singularity University Graduate Studies Program at NASA Ames. He is also Junior Fellow at the Aspen Institute, member of the “Young European Leaders – 40 under 40” cohort of 2011, member of the scientific committee at Blockchainlab.it and member of the executive committee at the Global Shapers Hub - Milano, a World Economic Forum community. Twitter: @rafr 85