blockchain technology...③ transaction platform ④ decentralized database ⑤ distributed...
TRANSCRIPT
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
vcapv.com © William Mougayar, Virtual Capital Ventures
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
4© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
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.
5© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
The Blockchain Enables P2P
Transactions
Initiates transfer from their wallet
User AA
Receives funds in wallet
User BB
BLOCKCHAIN
© 2016 William Mougayar
Confidential to Ernst & Young.
6© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
Shared Documents Analogy
Confidential to Ernst & Young.
VS.
7© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
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
9© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
I N T E R N E
T
WORLD WIDE WEB
© 2016 William Mougayar
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
10vcapv.com © William Mougayar, Virtual Capital Ventures
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
© 2015 William Mougayar
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
13vcapv.com © William Mougayar, Virtual Capital Ventures
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
14vcapv.com © William Mougayar, Virtual Capital Ventures
A T O M I C Blockchain
Programmable
ASSETS
TRUST
OWNERSHIP
MONEY
IDENTITY
CONTRACTS
15© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
Proofs as a Business / Service
© William Mougayar, 2016© William Mougayar, 2016
16vcapv.com © William Mougayar, Virtual Capital Ventures
OpenBazaar: Decentralized P2P
Commerce
vcapv.com © William Mougayar, Virtual Capital Ventures
“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.”
18© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
And New Models Are Emerging
WORKWORK VALUEVALUETransactions
Actions
Tokens© 2016 William Mougayar
The Relationship Between Tokens, Value and Work
Confidential to Ernst & Young.
19© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
� 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
Confidential to Ernst & Young.
20vcapv.com © William Mougayar, Virtual Capital Ventures
UNREGULATED
ENVIRONMENTS
REGULATED
ENVIRONMENTS
Innovation Potential for
Blockchain
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NEW COMPANIES
ANDBEHAVIORS
NEW COMPANIES
ANDBEHAVIORS
INSIDEEXISTING
COMPANIES
INSIDEEXISTING
COMPANIES
THREATENEDOR
TRANSFORMED
THREATENEDOR
TRANSFORMED
JUSTTECHNOLOGY
JUSTTECHNOLOGY
How New Technology Permeates
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Who will be the next Google of the blockchain?
23vcapv.com © William Mougayar, Virtual Capital Ventures
Who will be the next Amazon of the blockchain?
24vcapv.com © William Mougayar, Virtual Capital Ventures
Who will be the next ____ of the
blockchain?
25vcapv.com © William Mougayar, Virtual Capital Ventures
The first large bank to accept
cryptocurrency?
26vcapv.com © William Mougayar, Virtual Capital Ventures
Crossing $1B assets traded on
blockchains?
27vcapv.com © William Mougayar, Virtual Capital Ventures
The first crypto-based economy
business?
28© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
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
29© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
What To Watch For
� Regulatory sandboxes
� Blockchain record keeping acceptance
� Emergence of new clearing networks
� Documented benefits (costs, speed, risk,
visibility)
30© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
Implications for Fund Managers
� Sell side vs. Sell side
� Crowd funding of companies
� New Asset classes
� Private Blockchain Activity
� Investment opportunities
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Become part of the conversations.
vcapv.com © William Mougayar, Virtual Capital Ventures
William Mougayar Investor . Entrepreneur
Blogger . Board Member
General Partner
Virtual Capital Ventures
1-416-648-7010
http://startupmanagement.org/blog
http://vcapv.com
@wmougayar
thank you