Blockchain Technology...③ Transaction Platform ④ Decentralized Database ⑤ Distributed...

vcapv.com © William Mougayar, Virtual Capital Ventures

William Mougayar

General Partner, Virtual Capital Ventures

Author, The Business Blockchain

Blockchain Technology: How Will It Affect Investment Management?

September 7 2016


Cryptography

ScienceBLOCKCHAIN

SoftwareEngineering

GameTheory

CryptographyScience

The Blockchain Novelty

3© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures

How to view the Blockchain

Source: The Business Blockchain (Wiley, 2016) © William Mougayar


Everything Today Requires DB Synchronization

via Private Networks or Trusted Third Parties

Owns Database AConfirms AA has

at least $5

Bank A

Owns Database BConfirms BB can

receive $5

Bank B

Customer AA wants to transfer $5 to person BB

SWIFT

ClearingHouse

© 2016 William Mougayar

EscrowsCustodians

Trusted Parties

Confidential to Ernst & Young.


The Blockchain Enables P2P

Transactions

Initiates transfer from their wallet

User AA

Receives funds in wallet

User BB

BLOCKCHAIN




Shared Documents Analogy


VS.


Many Facets to the Blockchain① Cryptocurrency

② Computing Infrastructure

③ Transaction Platform

④ Decentralized Database

⑤ Distributed Accounting Ledger

⑥ Development Platform

⑦ Open Source Software

⑧ Financial Services Marketplace

⑨ Peer-to-Peer Network

⑩ Trust Services Layer

8vcapv.com © William Mougayar, Virtual Capital Ventures

Blockchains, like the Web, need the

Internet

I N T E R N E T

WORLD WIDE WEB BLOCKCHAINS

Source: The Business Blockchain (Wiley, 2016) © William Mougayar


I N T E R N E

T

WORLD WIDE WEB


Native BlockchainApplicationsWeb Applications

Hybrid BlockchainWeb Applications

PUBLICBLOCKCHAINS

PRIVATE N E T S

Private Application

s

Hybrid BlockchainPrivate Applications

Private BlockchainNative Apps

4 Types of Blockchain Applications

PRIVATEBLOCKCHAINS

4 Types Blockchain Applications


In the mid-2000’s FinTech Attacked the Banks,and it was called “Unbundling

Banking” U.S.

Europe

� In startup fashion,

most attacks

aren’t head-on,

start small & look

harmless at first

sights, therefore

are ignored

� So, the banks

didn’t feel FinTech

initially, because it

crept up

� The blockchain will

repeat FinTechGraphs Source: CB Insights

BLOCKTECH in FINANCIAL SERVICES VIRTUALscape by William Mougayar

BLOCKTECH in FINANCIAL SERVICES VIRTUALscape by William Mougayar

INFRASTRUCTURE & BASE PROTOCOLS

MIDDLEWARE & SERVICES

Public Special

Services Software Development Special APIsGeneral APIs Platforms Smart Contracts

MinersPayment

APPLICATIONS & SOLUTIONS

Virtual Capital Ventures © 2015 1.7

ExchangesBrokerage

Banks

Money Services

Investments

Trading Platforms

Hard WalletsSoft Wallets

ATMs

Payroll & Insurance

Payments

Compliance

Merchants

Trade Finance

Source: http://startupmanagement.org/blog

Financial Data

Microtransactions

Capital Markets

Blockchain in Financial Services

Consumer Facing

Consumer Facing

B2BServices

B2BServices

Back-endProcessesBack-endProcesses

Inter Industry Intermediarie

s

Inter Industry Intermediarie

sHundreds of Processes

Billions of users

Millions of businesses

Dozens of Players


Mortgages

Digital identities

Wallets

Exchanges

Simple transfers & Payments

Increasing evolution complexity & delivery timeframe

IT & Business Reengineering

to support all these changes

Insurance

Payments

Trusts

Escrow

Clearing Networks

International Transfers

Trading & Capital Markets

Trading & Capital Markets

Thousands of Use Cases

Securities & instruments

Syndicated Loans

Clearing & Settlements

Assets Ownerships

Bond sales

Digital Receipts


SelfPublishing

SelfPublishing

E-Commerce

E-Commerce

Social Interactions

Social Interactions

IT Supremacy Internet Years

Defining Technology Eras

Personal Communications

Personal Communications

Blockchain Promise

1994 2015

Data computation

Database applications

Transaction processing

Business Intelligence

Global operations

Enabling

Decentralization

of

Trust

Value Flow

withoutIntermediaries


A T O M I C Blockchain

Programmable

ASSETS

TRUST

OWNERSHIP

MONEY

IDENTITY

CONTRACTS


Proofs as a Business / Service

© William Mougayar, 2016© William Mougayar, 2016


OpenBazaar: Decentralized P2P

Commerce


“The buying and selling works flawlessly, I'm very impressed. I've made over twenty purchases and the total fees were less than $1.40 for all twenty purchases and sales. That's great.”


And New Models Are Emerging

WORKWORK VALUEVALUETransactions

Actions

Tokens© 2016 William Mougayar

The Relationship Between Tokens, Value and Work



� FSI are undertaking a variety of activities:

� Poking at startups and trying them

� Planning their own blockchain initiatives

� Many have aligned with R3, DAH or Chain as their main partners

� For most of them, the attention is on cost savings

and process improvements, not pure innovation

(bottom line)

� Few are thinking strategically about how they

could innovate outside of the regulatory boxes

Some Thoughts on the FS

market



UNREGULATED

ENVIRONMENTS

REGULATED

ENVIRONMENTS

Innovation Potential for

Blockchain


NEW COMPANIES

ANDBEHAVIORS

NEW COMPANIES

ANDBEHAVIORS

INSIDEEXISTING

COMPANIES

INSIDEEXISTING

COMPANIES

THREATENEDOR

TRANSFORMED

THREATENEDOR

TRANSFORMED

JUSTTECHNOLOGY

JUSTTECHNOLOGY

How New Technology Permeates


Who will be the next Google of the blockchain?


Who will be the next Amazon of the blockchain?


Who will be the next ____ of the

blockchain?


The first large bank to accept

cryptocurrency?


Crossing $1B assets traded on

blockchains?


The first crypto-based economy

business?


Some Use Cases

Financial Services

� eTRS (ConsenSys, Microsoft, IPFS)

� Clearmatics, DCN for OTC derivatives

� Cambridge Blockchain catastrophe bond counterparty

validation

� CORDA / R3 Consortium

� Securities Insurance, Corporate Actions (Dividend/Stock Splits,

Ownership Registry, Trade Reconciliation, Cash Payments, etc.)

Government

� Delaware, Singapore, Estonia, Ukraine, Russia, Georgia, UK

Energy, Healthcare, Internet of Things


What To Watch For

� Regulatory sandboxes

� Blockchain record keeping acceptance

� Emergence of new clearing networks

� Documented benefits (costs, speed, risk,

visibility)


Implications for Fund Managers

� Sell side vs. Sell side

� Crowd funding of companies

� New Asset classes

� Private Blockchain Activity

� Investment opportunities


Become part of the conversations.


William Mougayar Investor . Entrepreneur

Blogger . Board Member

General Partner

Virtual Capital Ventures

[email protected]

1-416-648-7010

http://startupmanagement.org/blog

http://vcapv.com

@wmougayar

thank you

Blockchain Technology...③ Transaction Platform ④ Decentralized Database ⑤ Distributed...

Documents

Transcript of Blockchain Technology...③ Transaction Platform ④ Decentralized Database ⑤ Distributed...