Post on 02-Jul-2015
description
A rapidly changing financial landscape
November 2014
If the rate of change on the outside (of an organization)
exceeds the rate of change on the inside, the end is near....
-Jack Welch
Then…
Thx to R. Wieselfors, Ericsson for photos
…Now
Thx to R. Wieselfors, Ericsson for photos
Accelerating pace of change
Ray Kurzweil, Singularity Institute
People• High internet penetration• “Net generation”• 24x7 “mobile” workforce• Knowledge via MOOCs• Sharing not consuming
Technology • Broadband access• The cloud• Mobile phones• Internet of Things • Big data• 3D printing• Robotics/AI• VR/AR
Open Source• Software
• Hardware• Physibles
Convergence of…..
Finance• Microlending/microfinance • Crowdfunding/equity/P2P• Non-fiat cryptocurrencies• Mobile money/payments
In just a few years in Sweden…
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies
The genie is
out of the bottle….
New developments like crowdfunding and cryptocurrencies (e.g., Bitcoin)
have let the genie out of the bottle…..
All our basic assumptions about money and financial services are now
being questioned.
What is Crowdfunding?
Accumulation of small investments in individual projects by large number of individuals (the
“crowd”) via or with help of Internet and social networks (De Buysere et al., 2012)
Picture: FundedByMe
Local Stockholm success story: Flippin’ Burgers
Money raised:
SEK 36,502 /
€4,000
Number of
investors: 186
Date funded:
September 2011
Sector: Food
Enabling local, small-scale solutions
http://travel.cnn.com/best-americana-restaurants-europe-023346
How big is crowdfunding?
FundedByMe raised USD 10.5 mln to date
Swedish market to be SEK 100 mln in 2014
Global crowdfunding almost doubled 2012 to 2013 to USD 5.1 bln
March 2014 Kickstarter passed USD 1 bln in total pledges
By 2025 global crowdfunding could reach USD 90 to 96 bln (1.8 times today’s global VC industry)
Growth potential greatest in emerging markets?
USD 50 bln in China by 2025?
Four forms of crowdfunding
Form Benefits for funders
Donation-based Donation Intangible benefits.
Reward-basedDonation or pre-
purchaseRewards in addition to intangible benefits.
Equity-based InvestmentReturn on investment if company does
well. Rewards sometimes also offered and intangible benefits may motivate too.
Debt-based LoanRepayment of loan with interest.
Alternatively intangible benefits if loan given interest-free.
Ingram & Teigland 2013
Crowd equity taking off
Toborrow.se
One step in the financing chain
Nesta
Women in USA<30% of business owners
<15% of angel investors
<10% of venture capitalists
But…Women on Kickstarter 35% of project leaders
44% of investors on platform
>40% of projects women invested in had female project leaders
Marom, Robb and Sade 2014
Democratizing innovation through access to capital
“Made in Africa” 3D printer (Togo)
Winner of International Space Apps Challenge
http://www.engineering.com/3DPrinting/3DPrintingArticles/ArticleID/5712/E-Waste-3D-Printer-to-Mars.aspx
In just a few years in Sweden…Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies
Cryptocurrency mining equipment
http://techcrunch.com/2014/09/04/kncminer-raises-14-million-to-take-bitcoin-mining-to-the-moon/
Bitcoin = The power of community + open source + internet + CPU
Developed by self-organizing community of thousands of “strangers” across globe
Not one but many motivations (intrinsic, extrinsic)
SEK 91 bln in circulation vs SEK 38 bln of Bitcoin in five years
Approx USD 5.2 bln in circulation (Nov 2014) and 70,000 daily transactions
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707
What is a cryptocurrency?
Digital
Decentralized, peer-to-peer (P2P), i.e., no central, third party
Uses cryptography to validate transactions
Also uses cryptography to generate currency itself
How does Bitcoin work?
Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor”
Block chain • Shared public ledger • All transactions ever
made available• Chronology and
integrity enforced by cryptography
Mycelium Bitcoin Wallet
Bitcoin – one of many cryptocurrencies
Currency CodeYearEst.
Founder(s) Active Website PoW PoS
Bitcoin BTC or XBT 2009Satoshi Nakamoto (pseudonym)
Yes N/A Yes No
Ripple XRP 2013Chris Larsen & Jed McCaleb
Yes ripple.com No No
Litecoin LTC 2011 Charles Lee Yes litecoin.org Yes No
Peercoin PPC 2012Sunny King (pseudonym)
Yes peercoin.net Yes Yes
Dogecoin DOGE 2013Jackson Palmer& Billy Markus
Yes dogecoin.com Yes No
Namecoin NMC 2011 N/A Yes dot-bit.org Yes No
Mastercoin MSC 2013 J. R. Willett Yesmastercoin.org
No No
Primecoin XPM 2013Sunny King (pseudonym)
Yes primecoin.org Yes No
Rise of local currencies
A vocabulary list of currencies
Fiat currencyNational currency
Alternative/complementary currencyBonus points/vouchers, e.g., frequent flyer miles
Digital currencyIn-game currencies, e.g., Stardollars, Farmville cash
Virtual world currencies, e.g., Linden dollars, PEDs
Mobile currency, e.g., M-pesa
Cryptocurrency, e.g., Bitcoin
From Africa to Eastern Europe to ?
Real cash economy in Entropia Universe
http://blogs.forbes.com/oliverchiang/2010/11/13/meet-the-man-who-just-made-a-cool-half-million-from-the-sale-of-virtual-property/
•GDP >USD 440 mln•PEDs <--> USD, Euro•Record virtual good: USD 625,000
The future?
Facebook + banking license?
What does the future hold?
• Will we see a parallel to other industries, e.g., music, software, newspaper, books?
• Will “trusted” third parties no longer be needed since trust can be mediated through networks, which are self-regulating?
• What basic assumptions will no longer hold, e.g., do we need money?
”The future is already here, it’s just not very evenly
distributed."
- William Gibson
Robin Teigland
robin.teigland@hhs.se
www.knowledgenetworking.org
www.slideshare.net/eteigland
www.nordicworlds.net
@RobinTeigland
If you love knowledge, set it free…
If you like this presentation and would like to contribute to our research, we accept bitcoins: 14hs4JbnQLXE87GGzu84uXGaspmxmnLpwC.Thank you!!!!!