CHRIS GRUNDY

Bitbond

Berlin, June 16th, 2017

Chris Grundy, Head of Marketing @ Bitbond

The #unbank

Featured on

Understanding the evolution and potential of Blockchain

• 2005: Hurricane Katrina hit the Gulf Coast of the United States causing huge damage to the entire region. One of the worst discoveries in the aftermath: Years of public archives such as birth certificates and medical records were destroyed and lost forever.

• 2015: Chipotle shuts down dozens of stores after public health officials link them to an e.coli outbreak. Chipotle’s stock price drops by 45%, leading to the resignation of CEO Montgomery Moran.

• 2016: Wiring 50 US dollars from New York to London takes up to five days, costs more than 30 US dollars in transaction fees, and conversion to pounds sterling comes at a charge.

Bitcoin: A Peer-to-Peer Electronic Cash System

A distributed

public ledger, i.e.

the blockchain

AddressBalance

1KQRjL3kuSWzkdCVQfUCeN1EEvLEVWt4hj 1.05 BTC

14ndGTpRkaaswsVaG19ZTY8G3c7XZxSNX1 0.34 BTC

18xqbHpYrxduTEXiCoGhi5j7TNQahU6ZCC 2.68 BTC

Solution

Blockchains solve the double-spending problem

Basic components of a Blockchain

• The blockchain consists of two components:• Transactions• Blocks

• These make up a chronological sequence of blocks containing typically thousands of transactions propagated to the network.

What are the ingredients of a Blockchain?

There is also no need to understand

https in order to shop on Amazon

Users don’t need to understand protocols

Blockchains have at least 6 use case areas

1. Remittances

2. Cross-

border lending

3. Payments

4. Speculation

5. Supply

Chain

6. Smart

contracts

Open / permissionless

Programmable via APIs

Trustless

Third-party independent

Cost-effective

Global and fast

Advantages of blockchain based payments

Blockchain technology enables bank-independentfinancial services

$431.6 billion• In officially recorded remittances to developing countries in 2015.

African remittance market is

particularly inefficient

• Average cost to send remittances to Sub-Saharan Africa is ~10%. By far the most expensive. (South Africa is 17%)

• 3x more than to SE Asia or S. America

• $1.8 billion lost in fees paid each year

Blockchain applications solving real problems

• The Problem• SolarNow is an African startup that provides

solar energy and financing solutions throughout East Africa.

• The local bank was the only option for cross-border transactions. The service was poor, taking 2-3 days to solve issues or complete a transfer, and payments would often be missed or delayed. As the team makes frequent, small transactions (<$1000), the $18-$20 fees per transaction were adding up exponentially.

• The Solution• BitPesa’s customer service proved superior,

with a 75% faster response time. Transaction speed is now significantly faster, moving from several days to several hours.

• Standard $18-$20 fees per transaction have been eliminated, saving the team significant costs on frequent small transactions.

• “The cost is much lower compared to our commercial bank.

$2 trillion• Is the global funding gap for small to medium sized businesses, according

to the World Bank

Bitbond connects borrowers and lenders globally

The first global SME loans marketplace –

only possible with blockchain / bitcoin technology

Small business

borrowers

Retail and institutional

lenders

We score borrowers based on business accounts

• PSP • Accounting

• reads applicant’s data through API connection

• Example

• Account type • Marketplace

• continuous data evaluation improvement via machine learning project with Potsdam University

• Business owner

• conducts KYCand fraud checks

• Credit score and debt capacity

Based on

● Identification documents

● Revenue and feedback on

marketplace accounts

● Transactions in payment

accounts

● Business standing based

on internal accounting

● (Absence of) fraud

indicators

● Data which banks

normally don’t consider

We’ve originated over 1,800 loans

1,800 $ 2 m

Originated loans Total originated loan volume Registered users

from 120 countries

100,000

Many different blockchains exist

Overview of Bitcoin and Ethereum

● Built for all kinds of

blockchain applications

● Turing complete, with

own programming

language Solidity for

smart contracts

● Ethereum is a decentral

virtual machine

● Among other things the

network supports issued

multi-purpose tokens

● Mainly created as a

digital payment network

● Scripting language

purposefully not Turing

complete, doesn’t allow

loops

● Blockchain gets bloated

and slow to search if

metadata is overused

● Architecture intentionally

kept simple

• Invented by Vitalik Buterin in 2014

• Distributed and Turing complete

• Open source• Uses its own cryptocurrency

called Ether• Ethereum was designed as a

Smart Contract platform

A Smart Contract is a piece of Software that stores rules for negotiating the terms of a contract, automatically verifies the contract, and then executes the agreed terms.

Using Blockchain in the Supply Chain

• In October, Wal-Mart started tracking two products using blockchain: a packaged produce item in the U.S., and pork in China. While only two items were included, the test involved thousands of packages shipped to multiple stores.

• It gives them an ability to have an accounting from origin to completion. If there’s an issue with an outbreak of E. coli, this gives them an ability to immediately find where it came from. That’s the difference between days and minutes.

• Everledger is a global startup that uses the best of emerging technology including blockchain, smart contracts and machine vision to assist in the reduction of risk and fraud for banks, insurers and open marketplaces.

• They built a global, digital ledger that tracks and protects valuable assets throughout their lifetime journey. They collect an asset’s defining characteristics, history, and ownership to create a permanent record on the blockchain.

Ascribe.io

• Create a permanent and unbreakable link between you and your creative work.

• Trace where and how your work spreads on the internet.

• Securely share your digital content with friends, family or fans. Transferring work is made as easy as sending an email.

Lock in attribution, securely share and trace where your digital work

spreads.

IBM’s Hyperledger

• IBM Blockchain is a public cloud service that customers can use to build secure blockchain networks. This could allow any private company or government agency to set up a trusted network, which would allow the members to share information freely, knowing that only the members could see it, and the information couldn’t be altered once it’s been entered.

Blockchain applications make sense when...

● Participants have adverse interests

● Central points of failure should be avoided

● Accurate time-stamping is required

● Database entries must be “set in stone”

● Large-scale redundancy of small amounts of data is

beneficial

For more information

• Bitcoin: An Electronic Peer-to-Peer Cash System - Satoshi Nakomoto (https://bitcoin.org/bitcoin.pdf)

• Ethereum: A Secure Decentralised Generalised Transaction Ledger -Gavin Wood

• Mastering Bitcoin - Andreas Antonopolous• The Blockchain Revolution - Alex & Don Tapscott• Deloitte - Getting Smart about Smart Contracts• Cognizant - Blockchain’s Smart Contracts

Thank you for listeningTwitter: @grundy_10