VS BankingBankingCRYPTOCURRENCY
THE CURRENT FINANCIAL SYSTEMCAN AND WILL
DISRUPTHOW
The recent emergence of cryptocurrency has the POTENTIAL TO CHANGE THE WAY PEOPLE BUY AND SELL SERVICES throughout the world.
Near the end of 2013,bitcoin alone approached a
$14 billion
Bitcoin and altcoins have gained rapid momentum, but there is still much more room for
Each day, the amount of bitcoins traded is equal to only 0.7% of the credit card transaction volume in the U.S. alone.
IMPACT.
market capital izat ion.
TRANSACTIONS PER DAY(in $USD)
NYSE TRADING VOLUME (May 2014)
(2013)
(2013)
(2013)
(Last 6 months ending June 15, 2014)
U.S. CREDIT CARD TRANSACTIONS
PAYPAL TRANSACTIONS WORLDWIDE
WESTERN UNION WORLDWIDE
BTC TRANSACTIONS WORLDWIDE
$35.7 billion
$11.2 billion
$493 million
$225 million
$78.2 million
However, to truly understand why cryptocurrency could change the game, one must look at how and why our financial institutions were created in the first place.
0.7%
Retail banking as we know it took thousands of years to develop.
Before banks, people used to store currency at temples for safety.
Some of the first financial intermediaries were "money changers", merchants who would take money in one currency, and exchange it to another for a profit.
Modern banking begins in early Renaissance Italy.
The world's oldest continually operating bank, Monte die Paschi di Siena, is founded in 1472.
Cheques are invented in England.
Bills are used for the first time.
ATMs, electronic payment systems, and online services are all offered for the first time.
A SAFE PLACE TOKEEP MONEY
Security
Saving& Investing
TO GROW MONEY THROUGH INTEREST
AND ACCESSTO INVESTMENTS
It has taken THOUSANDS OF YEARS for the financial system to develop. However, retail banking has always relied on many of the same principles:
15TH CENTURY
17TH CENTURY
19TH CENTURY
20TH CENTURY
In order to offer these services,banks and other intermediaries need to
pay rent, staff & other expenses.Thus, adding additional costs and inefficiencies to consumer transactions.
ANCIENT TIMES
14TH CENTURY
PAYMENT SYSTEMS
T H E O R I G I N S
OF BANKING & OVER TIME B A N K I N G
ConvenienceAN EASY WAY TO
ACCESS THEIR MONEY
T H E S E C O S T S A R E W E L LE M B E D D E D I N T H E S Y S T E M :
ACCOUNT FEES
ATM FEES
OVERDRAFT FEES
WIRE TRANSFER COSTS
CHEQUE COSTS
MERCHANT FEES
Instead of having a person or company as an intermediary in a transaction, cryptocurrency uses a mechanism called the BLOCKCHAIN. In just SIX SHORT YEARS,
the popularity of cryptocurrencies have soared.
AVG BTC TRANSACTIONS PER DAY: ($USD)
NOTABLECOMPANIES
The blockchain is a public ledger of transactions that is TRUSTED, SECURE, AND SHARED. Cryptography allows it to happen, and it removes the middleman.
Each transaction is verified extensively by the network to be true, so it is NEAR IMPOSSIBLE FOR A FRAUDULENT TRANSACTION.
<$100,0002010
2011
2012
2013
2014
$1.1 MILLION
$1.7 MILLION
$40.5 MILLION
$74.3 MILLION
Today, over
100,000 MERCHANTSaccept bitcoin.
EXPEDIA WORDPRESS
DISH NETWORK VIRGIN GALACTIC
SHOPIFY
SPUN OFF OFBITCOIN PROTOCOL
CRYPTOCURRENCYT H E I N N O V A T I O N O F
OF BITCOIN& ALTCOINS
T H E Q U I C K R I S E
LEDGER
LITECOIN
NAMECOIN
PEERCOIN
DOGECOIN
O T H E R C R Y P T O C U R R E N C I E S
0100110101011101010101011101101010100101010100101010110100010100101010001011
The marriage of concepts behind bitcoin and cryptocurrency creates the opportunity to disrupt traditional finance and even other areas of life:
LEDGERLEDGERLEDGERLEDGER
P2P BLOCKCHAIN OPEN SOURCE
NETWORK
DECENTRALIZED CRYPTOGRAPHY
Interactions withoutintermediaries
Massive computing power
No central authority Enforces integrityof blockchain
Self-sustaining,public ledger
Code is public andcan be built upon
Every year, billions of dollars go to companies that process transactions - in the digital age, this is as simple as transferring digits between computers.
InefficientTransaction
EfficientTransaction
(Intermediaries: Bank, Credit Card, etc.)
(No intermediary)
Examples ofhow this
CAN & WILLDISRUPT THE
ECONOMY
P A Y M E N T S Y S T E M S
YOU BUY LUNCH FOR $20
CREDIT CARD CHECKSWITH YOUR BANK
2
1 1
2
3 3
4
CREDIT CARD SENDS MONEYTO RESTAURANT’S BANK,
AND CHARGES 3%(merchant gets $19.40)
CREDIT CARD CHARGES YOUINTEREST / ANNUAL FEES
YOU BUY LUNCH FOR 0.03 BTC
BITCOINS GO DIRECTLY TO VENDOR AND TRANSACTION IS VERIFIED TO BE TRUE BY NETWORK
MERCHANT GETS 0.0299 BTC(0.0001 BTC fee to miners,who process transaction)
IN THIS CASE FEEWORKS OUT TO 0.3% MORE
EFFICIENT!
10X
B A N K A C C O U N T S
The average Canadian SPENDS NEARLY $200 IN BANK FEES each year.
Allows you to keep money safe and make
transactions for a monthly fee.
Allows you to store money safe in a digital or paper wallet at virtually no cost. Bitcoin also has a known money supply (21 million BTC)
BANK BITCOIN
Bank run, fiat money with unknown future risks
(inflation, deflation)
Without proper preventative measures, someone could break into wallet
RiskRisk
What does it all mean?
D O W N T H E
ROADBecause bitcoin is open source, mechanisms such as the blockchain
can be built upon to spur even more financial innovation.
And some less obvious areas:
C R Y P T O C U R R E N C Y A N D T H E B L O C K C H A I N A R E C H A N G I N G T H E G A M E F A S T.
T H I S D I S R U P T I V E T E C H N O L O G Y C A N A N D W I L L T R A N S F O R M O U R E C O N O M Y.
FINANCIAL WORLD
THE MIGHTY TITANSO F T H E
INTERNET DNS
BANKS, INSURERS, CREDIT CARDS, PAYMENT SYSTEMS, AND EXCHANGES MAY BE THE NEXT INDUSTRIES FUNDAMENTALLY
DISRUPTED BY THE DIGITAL REVOLUTION.
CSE: NEU / FSE: 1W4
www.newnote.com
VOTING MUSIC DISTRIBUTIONSTOCK EXCHANGES
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BITCOIN DOGECOIN
TRADING STOCKS, FOREX, & BONDS USING DIGITAL CURRENCIES
BITCOINBASEDLOANS PAYMENT SYSTEMS
CONNECTING BITCOIN TO BIG RETAILERS
INSURANCE RELATEDSERVICES
It's never easy to predict how disruptive technologies will be applied, but here are some that experts have identified:
DIGITIZING HARD ASSETS SUCH AS GOLD FOR LIQUID TRADING
ESCROWSERVICES
