The future of Fintech and Blockchain

The Future of Fintech and Blockchain

Speaker: Prof David Lee Kuo Chuen

© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen

“Stone Age”

In 1946, the birth of ENIAC ( the 1st generation computer)

“Agriculture Age ”

In 1991, the birth of the first web site (Internet).

“Industrial Age”

Cloud computing framework taking over of the client/server framework.

“Bronze/Iron Age”

In 1977, the birth of AppleII, and in 1981 the birth ofIBM (Intel 8088 )- PC

source：http://www.wtoutiao.com/p/156D8bB.html “云计算”已成「老炮儿」，将被“区块链”所革命！


• Industrialisation – Manual labour replace by Machine production• The development of the modern computers and internet is a proven fact.

• Centralization of authority – Key characteristic of feudalism • The essence of cloud computing is to provide a single platform to consolidate the hardware,

and software resources administered by different groups in different regions.

Why cloud computing belongs to the Feudal Industrial Age

Although，cloud computing has brought down the

cost of operation efficiently。

but，“Centralisation "has its shortcomings too，

• Data security.

• Disconnection between cloud computing

and terminal server”.

• Challenges to data accountability & trust

mechanism.



Is there a technology to overcome these shortcomings ?

One of the answers is Blockchain


In October 2015, the 1st Global Blockchain Summit

was held in Shanghai. Geeks, entrepreneurs, academic

experts, investors, corporate executives, and regulatory

policy makers gathered and discussed the business

applications and opportunities of blockchain

technology in industry, such as Payment, Internet of

Things, securities trading, digital assets management.

Over 200 guests from the financial industry, including

banking, payments, securities and commodities

attended the summit.

source：http://www.8btc.com/wanxiang-blockchain-labs-20151015© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

In a 20th January release, The People’s

Bank of China (PBoC) said that it is

moving toward the launch of its own

cryptocurrency. The bank wants to use

its control over the currency to reduce

money laundering, tax evasion and other

criminal acts. Blockchain will form the

backbone of its cryptocurrency.



A n I n t r o t oB l o c k c h a i n


Blockchain：Decentralised Database- First used in Bitcoin。

Encrypted transaction

Step 1

Block

Every online transaction is represented in a block

Step 2

Each block record, is distributed to all the participants

Step 3

Participants validate the block - transaction record

Step 4

Step 5

The block is added to the block chain- the transaction is recorded Step 6

Transaction completed

Encrypted transaction


Blockchain

Public chains Private chains

Consortium Chains

Fully Private Chains

E.g.：R3 CEV

E.g.：Bitcoin

Types of Blockchain Features of Blockchain• Decentralised

• Data is replicated on all the nodes in a P2P network, and each node’s copy of the data is identical to every other node’s copy

• Consensus mechanism

• All users in the network can come to collectively agree on the validity of the data recorded

• Irreversibility and crypto security

• One would need to command at least 51% of the computing power of all mining nodes to take control of the block chain -to overturn the consensus blockchain.

• Openness

• Data is open to all on the P2P network

• Anonymity

• Individual parties are never identified. Instead, security keys (public and private key pairs) are required to gain access to transaction output.

• Multiplatform

• Every blockchain node has the same calculation and data structure. Any platform will be able to compute the node.

source：http://www.8btc.com/what-is-blockchain; http:// community.qingcloud.com; https://blog.ethereum.org


Telecommunications Voting Healthcare Nortarizastion Banking

Equity brokerage &Exchanges

Insurance Web DomainInternet of

Things

……

Moreare

coming


Stock/Securities Exchange

1 Bitshares system 2 Blockchain Equity Exchange System.

• Real-time exchange; total transparency• All corporates can self issue their securities.• Open source system，enable tens of thousand of

transactions per second.

• Use mainly for the transactions of Privatecompanies shares.

• Overstock and project Link by NASDAQ are developing this system.


B a n k i n g

• E.g. Cash transfer• Present：You＝>bank＝>friend• Future：You＝>friend

• BIS research report：The development of block chain technology will change how central banks operate.

Benefits of block chain that banks can leverage on

• Security: irreversible, immutable, traceable

• Ease of governance : Utilises name base block chain, every node will be identified, e.g. alliances, issuers, general users

• Low operating cost : Reduce the cost of transactions

• Shortened the settlement time of financial transactions: UBS white paper: business process time can be reduced to 15 seconds.

• Santander bank: using blockchain technology will help the banking sector to reduce expenses by 20 million USD.

• Lower counter party riskssource：http://www.businessinsider.sg/11-banks-in-r3-consortium-use-blockchain-technology-to-trade-2016-1/?r=UK&IR=T


Banking R3

Blockchain applications for banking：From vision to realisation

•R3 (R3CEV LLC) leads a consortium of 42 financial companies in research and development of blockchain usage in the financial system.

•11 banks conducted trials on transactions through distributed ledger using Ethereum and Microsoft Azure.© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

I n s u r a n c e

Traditional coverage system

Decentralised coverage system

• All data is recorded into the

blockchain.

• Any user can start and end their

insurance coverage at anytime.

• No need for insurance funding pool.

Mode of insurance coverage

• Irreversible, immutable and

impartial, ensure self authenticationand fairness.

• The decentralised system removethe need for middleman, which

ensure high utilization of the fund.

Advantages


P2P lending

MoneyCircles is a mobile-decentralised P2P Savings & Loans marketplace built on private blockchain technology.

Through smart contract, MoneyCircles let people with a common bond, save & borrow from each other -a kind of credit union in the cloud, but without the usual costs and restrictions. 。

• Core Advantage：*No black box mechanism or money pool issues.*Transaction flows are open and transparent. *All users can monitor where the funds are transferred to and how the fund will be used.

• Millions of savers have money trapped in low interest savings accounts with institutions who want to lend, but may not be profitable for these institutions. Savers desire better rates and want their money put to better use. MoneyCircles.com aims to reconcile these two parts of the market, by making saving and lending more socially based, to better deploy deposits which will help significant parts of the society.

source：http://moneycircles.com/


Communication

Design flow of traditional communication devices：All nodes will connect through the shortest or the most efficient route.

Bitmessage as a central link for message delivery ：• Message is sent to users of the network,

and users can only access using theirprivate key.

• Avoid being track• Ensure data security and data transfer

security

GetGems a decentralised hub：• communication function is

similar to that of Bitmessage• Equip with Bitwallet• Transact and earn

cryptocurrency“gems”.• Users can click on

advertisements for monetary rewards.

Bitmessage


V o t i n g

Old, requires high maintenance , inefficient, and not fraud proof。

What does the blockchain means for voting?:• Verifiable source code for voting machines• Prevent voter fraud by eliminating the

possibility of more votes than registered voters.

• Instant, transparent and incorruptible voting data.

• Very low cost, easy to implement

Voting system that utilised block chain：• Complete voting

system• Secure• Innovative

Blockchain Apparatus Voting System:• Complete voting system• Focused on security: multiple audit trails,

including paper and the blockchain.• Uses innovative techniques that are not

present in any other voting system• Customizable ballots provide a familiar

interface for voters.• Friendly admin interface.

source:http://blockchaintechcorp.com/blockchain-apparatus/blockchain-voting-machine/

USA Current Voting system


V o t i n g

source： https://followmyvote.com/

Open source

ConvenientLow cost

Secure


Internet of Things (IoT)

Today supply chain: buyers, sellers andtheir banks are link with one another

Tomorrow’s supply chain: maintains thesame direct connections, plus completetrustable visibility into the flow of goods andthe flow of transactions.

• IBM and Samsung Electronics jointly developed the Autonomous Decentralized Peer-to-Peer Telemetry (ADEPT)

• ADEPT has several capabilities that are fundamental to building a decentralized (Internet of Things) IoT

• ADEPT operates on three open source protocols: Telehash for messaging, BitTorrentfor file sharing and Ethereum, a blockchain protocol for autonomous device coordination functions.

• Once a product is assembled, the manufacturer will register the product into the production system blockchain. When a consumer purchases the product, he or she can register the product into the manufacturer regional blockchain for authentication purpose.


Notarization

Blockai aims to develop

a new tool that enable

artist to prove and state

their copyright to their

artworks.

Uproov will explore

utilisting the blockchain

potential optimization of

time stamp ability.

Stampery wish to use

blockchain to replace

notarizers, and provide

authentication for

legality of sensitive

information.

Chronicled utilized

blockchain technology

to authenticate

collectibles sports shoes.

Irreversibility and incorruptibility allow Blockchain to be widely utilised for notarization purposes

source：http://www.8btc.com/blockchain-item?tagname=%E5%85%AC%E8%AF%81%E9%98%B2%E4%BC%AA© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

Bitproof innovated a

blockchain solution to setup

a one stop service to notarise

Education certificates.

BitSE develop Vechain the

first blockchain-based anti-

counterfeiting technology.

Factom utilize blockchain to help

businesses and government to

simplify records management,

record business processes, and

address security and compliance

issues.

source：http://www.8btc.com/blockchain-item?tagname=%E5%85%AC%E8%AF%81%E9%98%B2%E4%BC%AA

Notarization

Irreversibility and incorruptibility allow Blockchain to be widely utilised for notarization purposes


M e d i c a l H e a l t h c a re

A collaboration between Estonia government and guardtime

Healthbank：utilised blockchaintechnology that enable patients to management and share personal medical data with clinicians and researchers.

Applications：Population Health, medical records, patient data

Strengths：• Increase the transparency of healthcare services• Protect patient privacy (Insurance , credit providers, and patients can utilised

the blockchain solutions to manage claims and payments.)• Major data leak e.g. Anthem – 80 million patients and employees records ;

UCLA Health 4.5million patient records.• Increase the efficiency of bills payments process.


（ V i s a / D o c u S i g n )

The project is in the proof-of-concept stage. It brings DocuSign’s Digital Transaction Management (DTM) platform and eSignature solution together with Visa’s secure payment technology (via Bitcoin blockchain).

Users, through their Cars, will be able to pay for toll fees, buy pizza ,or subscribe for satellite broadcast programs.

Consumers can hop into a car in a showroom, configure the lease, insurance and other expenses such as parking and tolls, DocuSign it, pay via Visa, and drive off.。

source：https://www.docusign.com/blog/the-future-of-car-leasing-is-as-easy-as-click-sign-drive/

Contract:Utilise Docusign to verify lease and insurance.

Report:Check driving records

In car payment:Use Visa card

Service:Connections through Apps.


source：http://www.wanbizu.com/fazhan/201512015809.html；http://www.wanbizu.com/news/201602186602.html；http://www.wanbizu.com/news/201602186602.html

Government Administration

Ukraine will be the first to employ blockchain technology in its government administration system..

Bitnation is collaboratingwith Estonia to utiliseblockchain to administergovernmentaffairs…………

A new political party in Australia is advocating for the use blockchain as the mechanism for voting.


小蚁AntShares 布比区块链

Many more projects are in the pipeline© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen

WanXiang Blockchain Labs is a frontier research lab focusing on blockchaintechnology. The lab will gather experts in this field to work on technologicaldevelopment, business applications, industrial strategy and other aspects.The lab will also guide entrepreneurs, and provide reference for the developmentof the industry and policy making.Its overall aim is to benefit the society and economy with blockchain technology.

Products

WanXiang Blockchain Labs

source：http://www.blockchainlabs.org/

Bitcoin blockchainbased development

platform

Ethereum blockchainbased development

platform

Bitshares blockchainbased development

platform

factom blockchainbased development

platform


AntShares utilised blockchain technology to digitise physical real world assets and ownership rights. Through the node to node connection in the network, Antshares decentralised financial service processes, such as registrations, security issuances, assets transfers, and settlements administrations.

Areas for applications

Equity Crowdfunding

P2P Online lending

Employee Shares Issuance

Authorisation of e-contract

A n t S h a r e s

source：https://www.antshares.com© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

Jingtum BeiJing and HNA collaborate through blockchain

1 Corporate Wallet

Procurement detailscash

transfersettlement

• Utilise blockchain todevelop a low costsettlement system.

• Increase efficiency ofinformationdissemination

2 Supply chain financing

• HNA award employees with productdiscounts, rewards, and bonusesthrough the blockchain applicationdeveloped by Jingtum.

• Ensures confidential information ofemployees are secured, and allowsemployee to enjoy more discountsrewards.

3 Awarding of Welfare bonuses

• Utilise the encryptiontechnology that is based onJingtum block chain.

• Aims to solve thedifficulties in cashflow andfinancing ,and in high loaninterest faced by suppliers.

source：http://www.8btc.com/jingtong-hna


BuBi Blockchain

Applications

EquitySecured Private equity transactions。

Reward pointsManagement of customer rewards points。

Supply chainimmutable data management ，Supply chain management。

Value Propositions

source：http://www.bubi.cn/#page4

Efficient verifications of

transactions

Multiple signatories

authorisation

Efficient access to accounts ledger

Multiple assetsIssuance

Smart contractBlockchainExchanges


V i e w F i n

• Customised Blockchain solutions

• Accreditation of digital assets, Risks management,

Products Snapshots

Project Prometheus - Equity ManagementSolutions: Private or Permissioned Blockchainfor Equity Management• Uses：Equity registration, transfer, or OTC

trades.• Clients: Crowd-funding, Equity Exchanges ,

P2P Leading, Private Equities ,and clients requiring OTC trades.

Project Gaea - Land RegistrationSolutions：Private or Permissioned BlockChain for Land Registration• Uses：Provide trustless proofs for cross-regional

land rights-transfer , real time information validation, decentralised immutable data storage、and instant settlement for digital transactions.

Project Hermes – Royalty/reward Points management.Solutions：Manage customers reward points through Permissioned Blockchain.• Uses：Manage multiple reward points

programs .• Clients：All B2C businesses and services.

Project Themis - RegTech ChainSolutions：Private Chain Solution for Governments /NGOs to implement effective regulatory governance.• Uses：Immutable and time stamped record

management. Improve integrity of information and increase transparency.

• Clients：Governments, NGOs, Regulatory Bodies

source： http://viewfin.com/


数贝荷包Digital Wallet

Developed by Yi Cheng Interactive Technologies ，and Sunshine Insurance Group is the first corporate user of the digital wallet。Allow Sunshine insurance client to manage, transfer and transact customer reward points.

Product features and benefits

• Decentralised reward pointssystem。

• Users can self negotiate,transfer and transact rewardpoints. Increase the liquidityof reward points.

• Increases B2C and C2Cinteractions.

source：http://m.caijing.com.cn/api/show?contentid=4090411

Traditional centralised model Decentralised model© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen

Yangtze Delta Region Institute of Tsinghua University

together with Canaan, Hash, and BST established the China’s

blockchain applications research centre, which aims to develop

the use of blockchain technology.

Yangtze Delta Region Institute of Tsinghua University

Companies Introduction

• Founded in 2012, CanaanCreative is the worldwideleader in producing Blockchainservers and solutions forrepetition ASIC. Our productsare sold to over 150 countriesworldwide.

• 1Hash provides aprofessional and reliableservice platform for efficientbitcoin management ,anddevelopment platform forblockchain research.

• BST provides cloud computing(PaaS) service and softwaremanagement service (Saas) forBeijing government to manageinformation resource.

• Main product/service ： DigitalDXS-Cloud (Paas) ,and iTaxonomy

source：www.btc798.com/article-8759-1.html； http://canaan.io/zh/%E7%BD%91%E7%AB%99%E9%A6%96%E9%A1%B5/ ；http://www.synball.com/synball/home/；http://www.1hash.com/index.html


“One Belt, One Road”Blockchain applications

As the countries along the One belt ,One Road project transact using USD, the China government wishes to utilise blockchain technology to develop a cryptocurrency system which these countries can transact on. Through the Asia Financial Cooperation association ( to be established), countries members can work and decide on the rules, and protocols to ensure the security and the legality of the cryptocurrency system.

Improve financial cooperation, and communication

Help China corporatesto internationalise

Aid China corporates to minimise foreign investment pitfalls Digitise investment/trade information of the investments in countries along the “One Belt,One Road” project. Blockchain-• will ensure data security ,

transparency, and allow co-verification, and authorisation of information。

• Protect intellectual property rights。

Through the digitisation of production capacity ,and blockchainnetwork, China corporates can• Attract investors in countries along

the “One Belt,One Road” project• Carry out crowd funding in these

countries or internationally.• Or even conduct IPO on the

blockchain network.

Solve China’s problemof production over capacity

source：http://www.ftchinese.com/story/001065381?full=y© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

Blockchain 2.0：Ethereum

Ethereum is a decentralized platform that runs smart contracts:

applications that run exactly as programmed without any possibility of

downtime, censorship, fraud or third party interference.。

• Objective：Develop apps which run on a custom built blockchain that

enable shared global infrastructure and that represent the ownership of

property。

• Value proposition：enables developers to create markets, store

registries of debts or promises, move funds in accordance with

instructions or a futures contract, and many other potential

developments, all without a middle man or counterparty risk。© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

Microsoft, R3, Samsung ,Deloitte、RWE ,and IBM.

What problem does Ethereum wish to solve ?

Utilise smart contract to mitigate counter party risk

and issues

Blockchain 2.0 Core

- Smart contract, Smart Asset

- Rootstock a smart-contract peer-to-peer platform,

is rising fast to challenge Ethereum in Smart asset

developments.

Ethereum supporter？

Blockchain 2.0：Ethereum


Ethereum: decentralised smart application

source: https://slock.it/ethereum_computer.html

Rent, sell or share anything - without

middlemen Slock.it:

Utilise The Ethereum Computer to:

- Turn Personal Assets into Income : securely rent

access to any space or compatible smart object,

without intermediaries. Underused assets such as

temporarily vacant apartment is an opportunity to

make a profit.

- Develop applications for smart contract, and

smart asset to find, locate, rent and control any

object managed by an Ethereum Computer.


http://www.8btc.com/ito-ethereum

Making the world’ssystems honest

“Honesty is subversive” - Paul Snow


• In today’s global economy trust is in rare

supply。This lack of trust requires the devotion

of a tremendous amount of resources to audit

and verify records. Thus reducing global

efficiency, return on investment, and prosperity.。

• Incidents such as the 2010 United States

foreclosure crisis demonstrate that, the current

processes are terribly inaccurate, efficient and

prone to failure.。

• Factom removes the need for blind trust by providing

precise, verifiable, and immutable audit trail.

“Honesty is subversive” - Paul Snow


Factom’s blockchain technology can be

adapted to almost any organization.

• Businesses and governments can use

Factom to simplify records management,

record business processes, and address

security and compliance issues。

• power a remarkable range of applications,

e.g. audit systems, medical records,

supply chain management, voting

systems, property titles, legal applications,

and financial systems.。

Factom maintains a permanent, time-stamped record of

your data in the blockchain. Reduce the cost and

complexity of conducting audits, managing records, and

complying with government regulations

Application Usages Factom Proof- Network value

source：http://factom.org/

Proof of Existence :Document existed in this form at a

certain time

Proof of Process:Document is linked to this new updated

document

Proof of Audit:Verifying the

changes in the updated document© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

Factom Use Case 1 – Saving BoA $17 Billion

Factom could utilize the bitcoin blockchain to keep Bank of America’s records permanently engrained in the distributed public ledger. The entries are then “filed” into directory blocks and secured to the bitcoin blockchain every ten minutes. They can then be audited in real time and verified instantly, allowing everyone to double check the work completed and catch mistakes if they arise before they become a problem.

Background

Multiple mortgage companies, were fined billions of dollars due to a mishandling of mortage records. One of these companies was Bank of America who fell victim to a $17 billion fine, also known as the largest fine in history.。

Solution



https://youtu.be/DbRVPBFiy64

https://youtu.be/DbRVPBFiy64

Factom stores data for its clients using

encryptions that are called hashes in blockchain

in a decentralised system. Because the data is

encoded, no one except the user who created the

encryption can decipher it.

Blockchain technologies could prevent the

disastrous Sony hack ,and shift big companies

away from central databases.

Factom Use Case 2 - Protecting Sony Pictures with BlockchainTechnology

Background

Solution

On November 24, 2014, a hacker group which leaked out

confidential data from the film studio Sony Pictures

Entertainment. The data included personal information

about employees and their families, e-mails, salaries,

copies of then-unreleased Sony films….



https://youtu.be/lAhLqEn87kM

https://youtu.be/lAhLqEn87kM

Factom can digitized landownership documents

and store them in a decentralized blockchain.

Any land transactions and transfers can be

track . Furthermore unauthorized or illegal

changes can be detected and corrected.

Factom Use Case 3: Unlocking $9 Trillion in Land Value

Background

Solution

In many developing countries, land owners do not have

proof of rights to landownership 。Hernando De

Soto :”main problem of development is not that the

poor in the third world lack capital, but that many lack the

legal title to assets they already hold. Giving them legal title

will unleash this “dead capital” so that it can be used

as collateral for loans to fund businesses or expand

homes.。



https://youtu.be/uYQ5icxGvmA

https://youtu.be/uYQ5icxGvmA

Global PerspectivesThe potential of decentralised ledgers and block chains


Recent Developments – Collaboration Of Governments With Industry To Explore Strategic Potential Of Block Chains

Implementation of block chains is driven by:

1. The ability of block chain to provide a basis for cryptographic trust in a similar way to PKI• Block chains could leverage PKI’s deployed scale and governance

• PKIs could leverage block chain’s payment and ledger functions

2. Permissioned ledgers contain a data field of unlimited size• Information about a transaction, including the contract, licence or copyright,

could be included, providing a strong additional factor for trust.

• Enables ‘smart contracts’, offering efficiency and non-repudiation.


3. Smartphones are becoming the de facto trusted user device

The latest smart phones include new security features such as:

• Trusted Platform Module – secures digital certificates and cryptographic keys for authentication, encryption and signing

• Consumers can sign transactions (eg using a block chain) and payments (egusing a ‘trusted Bitcoin’) using smartphones.

Recent developments – Collaboration of Governments with Industry to Explore Strategic Potential of Block Chains


“Airbnb Co-founder Eyes Blockchain Tech For User Reputation And Trust”

13 Mar 2016

• Blecharczyk, Airbnb’s CTO said that Airbnb would be looking into Blockchain integration this year, or a similar distributed ledger system, to authenticate a user’s reputation and establish trust on the platform.

Source: http://www.theblockchain.com/2016/03/13/airbnbcofoundereyesblock chaintechforuserreputationandtrust/© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

http://www.theblockchain.com/2016/03/13/airbnbcofoundereyesblock chaintechforuserreputationandtrust/

“Microsoft & IBM Declare Blockchain Open For Business”

17 Feb 2016

• IBM has announced the official launch of its digital ledger deliverance

• Brings blockchain services to a cloud-based system

• Platform allows users to create, deploy and run blockchain-based applications.

• The London Stock Exchange Group is engaged in the development of open blockchain technologies with IBM• create solutions that will help manage risk and bring additional transparency to

global financial markets

Source: https://news.bitcoin.com/microsoftibmdeclareblockchainopenbusiness/© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

https://news.bitcoin.com/microsoftibmdeclareblockchainopenbusiness/

Although，

At present Blockchain still have

shortcomings.


• Is blockchain really superior to current solutions？What are the benchmarks？

* Can blockchain really reduce resources cost , improve service quality or

enhance users experience?

• Immutable public ledger, standardised contracts, accounting, and transactions

may seems too idealistic .

* Different nature of businesses ,and changing organisation needs will impede

the establishment of a single standard.

• To succeed, blockchain applications need to create true value to the users.

• Issues on the consolidation and allocation of resources：

*How should research resources be allocated ？Can related or similar resources

be consolidated to create synergies？

• What solutions ,and which industry domains should receive the most resource

funding?

source：“区块链落地还有多远”《财新周刊》 2016年第7期出版日期 2016年02月22日

Application suitability

Consolidation and allocation Of research resources.


• Ensuring security and immutability of data may drive up cost.

*To ensure the immutability of data（One needs enough computing power to

control more than 51% of the data copies to gain control of the

blockchain) ,implies incurring huge storage and resource power cost.

*Low storage efficiency：1.Huge amount of copies. 2.Blockchain size cannot be

reduced（expired and useless data will also be stored.).

• Rebooting of data is time consuming：New content X number of copies，and

coupled with distance and bandwidth, will be time consuming。

Affect user experience, e.g. high volume trading , processing huge data base.

• Illegal activities e.g. money laundering, financing terrorism, fraud, and

impersonation.

* A decentralised framework may not meet regulatory requirements.

* Early intervention and overregulation by regulators, may impede blockchain

developments, and the potential benefits of blockchain may not realised.

source：“区块链落地还有多远”《财新周刊》 2016年第7期出版日期 2016年02月22日

The likelihoodof reducing costs?

Regulatory requirementsConcerns ?


But Don’t Get Left Behind!

Noah'sArk


What is happening and what will happen?

• Unbundling and decentralisation of financial services

• Same data, same page, less errors

• Real time settlement without need for financial intermediaries

• Shaving off duplicative and redundant services

• Security boost

FINTECH

Banks Are Only The Beginning…


Capital Markets

• Smart Contract post trade settlement

• Automated

• Efficient

• No need for trusted third parties

Personal Insurance + Digital Identities

• Distributed ledgers with hospitals

• Seamless processing

• KSI authentication

• Boost claims efficiency

As Wide As Your Imagination Can Take You!


Real-time Accounting

• Immediate data flow

• Programmable accounting entries

• One master prime ledger to serve management, bank lending, regulatory purposes

• Less errors, free of manipulation

Company A

IRAS

B.O.D Suppliers

SH

Permissioned Public Ledger

Trade Flows

Real-time GDP Reporting

As Wide As Your Imagination Can Take You!Government Budgets

• Programmable smart contracts for budget allocation

• Real-time GDP and key data reporting

• Verifiable and trusted


Don’t rise with internet , but trip by blockchain。。。

Some internet companies may not pay much attention to ,or even disregard blockchain. If they miss this chance to utilise the blockchain development, the raise of blockchain may disrupt their technology roadmap.

-Yao Yu Dong（Director of China Central Bank- Institute of Finance）

千万别生于互联网死于区块链。。。


Regulators should keep up with financial innovations

MAS Ravi Menon： “If you start regulating every

one of those, you stifle a lot of innovation, and they

don’t get a chance to grow,” MAS will regulate

fintech firms only when they pose risks.

Support for FinTech：

• Promote Greater inter-operability across data systems is a key priority. E.g. an “all-in-one” addressing system, that will

enable e-payments using the payee’s mobile number, email address, social network account, or other proxies. Without

the need to know the payee’s bank account number.

• MAS will therefore introduce a “regulatory sandbox” approach that aims to give FIs more confidence to experiment and

launch their innovative products or services within controlled boundaries.。© 2016 Blockchain Research Group Directed by Prof David Lee

Kuo Chuen

Don’t Get Left Behind!


颠覆2.0


THE ECONOMICS OF FINANCIAL INCLUSION

• The problem of financial exclusion does not just exist in undeveloped

countries

• 7.7% of US households are unbanked and 20% are underbanked

• The underserved in the world turn to non-traditional forms of

alternative financial services such as those provided by cheque cashers,

loan sharks and pawnbrokers.

• For example, illegal workers in the US who cash cheques via agents such

as cheque cashing depots or convenience stores.


• The global picture of the unbanked and underbanked is even more skewed.

• Only 50% of adults in the world have an individual or joint account at a formal

financial institution (Demirguc-Kunt and Klapper , 2012)

• There are 2.5 billion adults in the world with no formal bank accounts, most of them

are in developing economies.

Source: newsroom.mastercard.com

THE ECONOMICS OF FINANCIAL INCLUSION


Mobile (Internet) Banking Penetration 2015.06


The Chinese Article advocate Singapore to use “Blockchain Technology” to expand its business network into ASEAN ( 10 countries, 600m people) ,and to adapt the Financial Inclusion model of China and Kenya to help Singapore’s neighbours.

-David Lee and Yan Li 15th May 2015, Lian Zaobao


Alibaba & Ali Pay


Financial Inclusion+ Sharing economy+ Blockchain = 颠覆 (Dian Fu)


http://www.smu.edu.sg/podcast/cryptocurrency-revolution-and-its-impact

BLOCKCHAIN THE DISRUPTOR

Oct 2014Podcast :

Decentralised

Bockchain

Reeduces

Business Cost


http://www.smu.edu.sg/podcast/cryptocurrency-revolution-and-its-impact

Bitcoin


Cryptocurrency


Financial Services and Blockchain


A software platform for fastBlockchain ,and SmartContract prototyping ,andapplication development.Blockchain As A Service

Drove effort to create a new architecture at IBM for connecting devices in Internet of Things (IoT)

Focused on wearable technologies • Apple Watch• Connected medical devices• Application of sensors and

connectivity to industry

Recruited Paul BrodyDeveloped RUBIX

Support from Big 4

Hiring people with expertise in Ripple, Hyperledger and Chain.

Aim to be neutral advisor for clients in implementation, rather than technical specialist

Blockchain Advisory

Commercial Sidechain“Liquid” to facilitate fastand secure transfersbetween exchange orbrokerage accounts

• Integrate multiple blockchains

• Distributed file storage permission

• smart contract capable blockchains

Strategic Partnerships


IBM Watson

• IBM is part of the Linux-based Hyperledger project.

• Offer ‘blockchain as a service’ for developers to use

within the IBM Cloud via a service called Bluemix. Its API

infrastructure allows external data to be plug into the

WATSON.

• Via the Watson platform, IoT information can be enter

into its blockchain suite. Such information can be

transfer from RFID chips, barcode scans or mobile

devices.

source：http://thenextweb.com/apps/2016/02/16/ibm-has-just-open-sourced-44000-lines-of-blockchain-code-on-github/


From Dark Net to Saviour?

• Is Blockchain a collaboration enabler?• A basis upon which people/entities can easily collaborate with distant

strangers/entities

• Is Blockchain an asset sharing enabler?

• Will Blockchain lead to a self governing IoT society based on voluntary institutions via voting?

• Will Blockchain lead to a large scale de-centralized collaboration?

• Will Blockchain be able to run a mutual insurance pool?

• Will Blockchain be able to establish a mutual credit system?


[email protected]陈万

Blockchain Research Group

W u Yu T i n g Z a n g M e n g Yu Sun Ming

Chen WanFeng Huang YiYa Lee YinHao

[email protected]

[email protected]

[email protected]

[email protected] [email protected]

[email protected]


Join our Blockchain, be A new node

！


Acknowledgements

•8btc forum•Mentioned companies

•Authors of cited websites

For sharing knowledge and information of Blockchain!


The future of Fintech and Blockchain

Economy & Finance

Transcript of The future of Fintech and Blockchain