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

REDDIT

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