Digital Currency Labs Inc. – Copyright © 2015

Unlocking Blockchain’s Potential______________________________________________________

George Samman, Blockchain Consultant & Advisor

“In the future, virtually every function in the world of Financial Services will be displaced, disintermediated

and decentralized.”

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Copyright © 2016 Scott Adams

• Inter-person trade - 150,000 years ago.• Rise of Barter. • Trust became difficult. • Barter grew inefficient.

A Bit of History

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• Development of money, credit, brokerage, banking.

• Rise of the Intermediary.

A Bit of History

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Our technology has finally caught up with our desire to transact, without the need to

trust the other party, and without the need for an

intermediary.

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“Finance 2.0”• Internet gave us a powerful way to

share and access information.

• Blockchain now gives us a powerful way to share and access value.

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• Internet based form of currency.• Borderless.• Instantaneous. • Authenticated.• Non-repudiated.• Immutable.• Peer-to-Peer networking; decentralized.• Can be used real world; payment for physical

goods and services.

It All Started with Digital Currency

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• Essentially an online payment system.• Invented by Satoshi Nakamoto.• “Bitcoin: A Peer-to-Peer Electronic Cash

System”. • Released as open-source software in 2009.• System is peer-to-peer; transact directly

without needing intermediary.• Transactions verified by network nodes.

Most famous = Bitcoin

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Graphic - How It Works (courtesy American Banker)

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• Ripple• Ethereum• Litecoin• Dogecoin• Stellar• PeerCoin• Dash

Other Digital Currencies

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Over 675

digital currencies.

Other Digital Currencies

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• A permissionless distributed database. • Protocol maintains continuously

growing list of data records.• Hardened against tampering and

revision, even by its operators.• No central repository; no single admin.• Trustless.• Technically, NO intermediary.

Technology Layer IS Blockchain

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15Copyright © 2016 Financial Times

16Courtesy – StackExchange

• Most secure record-keeping technology ever devised.

• Every bit of information stored on an immutable time-stamped list.

• Replicated on servers across the globe.

• Allows for full transparency.

Why Blockchain in Financial Markets?

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Distributed Ledger

Independent permissioned

blockchain

Distributed virtual

machine (Turing-

complete)

Smart contracts

govern off-chain assets

Network achieves

settlement finality

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Look at what blockchain can do.

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• Beneficial impact on pricing and costs.• More accurate customer tracking across

borders and banks.• Reduce risk of defaulters.• Facilitate fast, efficient, and secure

transfer of digital assets. - Bonds, Stocks, Futures, Options.

• Digitally 'signing' and time-stamping assets.

Cryptographic signing of transactions

Look at what blockchain can do.

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• All about making processes simpler and life easier.

• Blockchain is also a platform that can be coded and built upon.  

• Smart Contracts.• Asset creation/exchange.

Blockchain getting a lot of attention!

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Financial Institutions of All Types Getting Involved

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• IBM Goes Big on Blockchain Unveiling Services Suite and Strategy.

• Microsoft Partners With ConsenSys offer Blockchain platform for Developers.

• “Blockchain-As-A-Service”

Global Technology Firms Involved

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• Private or Public Blockchains.• Sidechains.• Alternative blockchains.• Smart Contracts.• Asset creation/exchange.• Identity Management.• Remittances.

This is Just the Beginning

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• Regulators have a deeper understanding now.

• Not only focused on threats of digital currency.

• Reviewing transparency as a benefit.• Ease the burdens of regulation?• Competitive advantage?

Regulatory Standpoint

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Bitcoin Has Its Critics…

MasterCard CEO Ajay Banga:

Bitcoin "starts bumping up against societal rules, which I worry about…it

doesn’t give me the safety and security of knowing that I am who I am, and I’m

paying who I know, which is what traditional currency does."

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JPMorgan CEO Jamie Dimon:

Bitcoin "is going nowhere... There is nothing behind a bitcoin, and I think if it was big, the governments would stop it."

… Who Seem to be Coming AroundMasterCard invested in Digital Currency Group; venture firm that has invested in 65 different bitcoin and cryptocurrency businesses.

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JP Morgan has:• Signed on with R3• Begun a trial project using

blockchain• Invested in Digital Asset

Holdings• And more…

Critics Miss The Point

• Technology will revolutionize how we transact; how we exchange value.

• Improve money remittances worldwide.

• Better, cheaper, faster payment processing.

• Servicing the unbanked and under banked.

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2015 was a transitional year:• UBS, Barclays, JPM etc launch blockchain

innovation groups.• ItBit gets Banking Charter license.• Finalization of NYS BitLicense Requirement.• TeraExchange adds former head of NYSE.• Coinbase enables high frequency trading.• NASDAQ to trial blockchain technology.• Overstock launches T0 (“tee-zero”).

Developments over the past year

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• Bloq, the "Red Hat for blockchain", launched with Jeff Garzik.

• Bitcoin Price Passes $420 Mark Amid Institutional Attention.

• Mizuho, Microsoft Japan Trial Blockchain System for Syndicated Loans.

• IBM and Microsoft supporting open source landscape.

• 7 Asian Banks Investigating Bitcoin & Blockchain Tech.

• China's Central Bank Weighing Blockchain Tech for Digital Currency.

2016 Has Already Been Game Changing.

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Still Going Through Adoption Chasm & Trough of Disillusionment

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• Reduced cost of trading.

• Reduced cost of compliance.

• Greater transparency to regulators.

• Smart Contracts, Smart Property.

• Major disruption across a broad range of industries, not just financial services.

What This Means for Financial Markets in the Future.

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The financial markets are changing.

Learn the technology.

Understand the Use Cases.

Reevaluate how our industries operate.

Prepare; it will impact your business.

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Thank YouGeorge Samman, Blockchain Consultant & Advisor

Email: george.samman@gmail.comTwitter: @sammantic

Blog: sammantics.com37