ICA JapanJune 26, 2018

Blockchain and Smart ContractsWhat’s next after ICOs?

Jeff Wentworth, Co-founderjeff@curvegrid.com

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Curvegrid

Building a blockchain application server Established May 2017 in Tokyo, Japan

Jeff Wentworth, Co-founderPreviously Vice President in Storage Engineering at Goldman Sachs, built a data migration system that moved more than 2 petabytes of data.

William Metcalfe, Co-founderFormer CTO at Gilt Japan and early employee in NYC, built systems to support a user base that grew from zero to 9 million.

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AgendaIntroduction to blockchain

Why is blockchain important?

Current adoption and sentiment

What’s next: capital raising, securities settlement and clearing, trade finance, insurance, banking the unbanked, identity, document attestation, ...

Blockchain and AI

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Two page overview of blockchainA blockchain is a database that’s distributed amongst thousands of participants.Participants can transact securely over the Internet without trusting one another.Bitcoin was started in 2009 and $3 trillion Bitcoin is now traded every year.

Alice

Bob1 Bitcoin

Verify

Alice and Bob don’t have to trust each other because they trust the Bitcoin blockchain.

BVerify

Verify

Verify

Alice sends Bob 1 Bitcoin over the Internet while all the other participants verify the transaction.

5Pay Bob 1 Ether every monthfor 12 months

These complex transactions are actually apps or “smart contracts” that run on the blockchain. A “token” is a type of smart contract.

Two page overview of blockchain (Cont.)Blockchain works because of math and cryptography, so a blockchain’s currency is called a cryptocurrency.Ethereum is a newer blockchain. Started in 2015, $850 billion worth of its cryptocurrency, Ether, is traded every year.Ethereum added the ability to perform complex transactions.

Alice Bob

Hold payment unless Bob provides a signed invoice by the 12th of the monthsmart contract

or token

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Two Significant Blockchains: Bitcoin and Ethereum

Bitcoin Ethereum

Introduced 2009 2015

Exchanging Money ✓ ✓

Abstract Computing ✓

Smart Contracts ✓

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Transactions are grouped together into blocks. Blocks are appended to the ledger.

Introduction to the Ethereum blockchain

Block Transaction Account Debit Credit

12938 1 Alice 2,000 Ξ

Bob 2,000 Ξ

2 Carl 1,500 Ξ

Diana 1,500 Ξ

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Introduction to the Ethereum blockchain

Block Transaction Account Debit Credit

6054 1 contract Wallet { ...

function remit(address _recipient, bytes32 _pwHash, uint _timeout) public payable returns (bool success) {

trackedBalance = msg.value;remitter = msg.sender;recipient = _recipient;pwHash = _pwHash;deadline = now + _timeout;

return true;}

...}

Wallet is a computer program that was uploaded to, and runs on, the Ethereum blockchain.

remit() is one of the functions that Wallet can

perform.

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One Application of Blockchain: Crypto TokensPrivate currency with rules

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Think of coins as a platform’s core currency

Coins (Platforms) Tokens

OmiseGo

Tether

EOS

Ardor

TenX

Bitcoin

Ethereum

Ripple

Bitcoin Cash

Litecoin

Source: CoinMarketCap, https://coinmarketcap.com/tokens/, Oct 2017

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Tokens are built on top of a platform

Coins (Platforms) Tokens

OmiseGo

Tether

EOS

Ardor

TenX

Bitcoin

Ethereum

Ripple

Bitcoin Cash

Litecoin

Source: CoinMarketCap, https://coinmarketcap.com/tokens/, Oct 2017

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Remember Smart Contracts?

Block Transaction Account Debit Credit

6054 1 contract UsefulToken { ...

function balanceOf (address _owner) returns (uint balance) {return balances[_owner];

}

function transfer (address _to, uint _value) {balances[msg.sender] = balances[msg.sender].sub(_value);balances[_to] = balances[_to].add(_value);

} ...}

The computer code within UsefulToken governs the creation, destruction, and transfer rules of the token.

Subtract from “my” balance on the subledger of UsefulToken balances, and add to someone else’s.

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Token subledger within larger Ethereum ledger

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Token subledger within larger Ethereum ledger

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Why is blockchain important?Compare with the fees and

overhead of... Fast transactions, low fees : Flat fee of $0.10 to send any amount of money globally in seconds.

Complex transactions :Stocks, bonds, futures, real estate contracts, insurance, etc. No middle man. Low fees. Fast confirmation and clearing.

The blockchain acts as a financial escrow service ;Transactions between people who don’t have to trust each other.

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Market Opportunities

Fast transactions, low fees : Flat fee of $0.10 to send any amount of money globally in seconds.

Complex transactions :Stocks, bonds, futures, real estate contracts, insurance, etc. No middle man. Low fees. Fast confirmation and clearing.

The blockchain acts as a financial escrow service ;Transactions between people who don’t have to trust each other.

Businesses will start to take advantage of the blockchain in the areas of finance, remittance, trade finance, contracts, asset tracking, logistics and more.

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Initial Coin Offerings (ICOs)

Source: https://www.cbinsights.com/research/blockchain-vc-ico-funding/

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Source: https://www.gartner.com/newsroom/id/3873790, May 2018

Current Adoption and Sentiment

Only 1 percent of CIOs indicated any kind of blockchain adoption within their organizations, and only 8 percent of CIOs were in short-term planning or active experimentation with blockchain, according to Gartner's 2018 CIO Survey. Furthermore, 77 percent of CIOs surveyed said their organization has no interest in the technology and/or no action planned to investigate or develop it.

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AgendaIntroduction to blockchain

Why is blockchain important?

Current adoption and sentiment

What’s next: capital raising, securities settlement and clearing, trade finance, insurance, banking the unbanked, identity, document attestation, ...

Blockchain and AI

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What’s Next: ICOs ⇒ Raising Capital

Source: https://www.pwc.ch/ico, 2018-06-26

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What’s Next: Banking

Source: https://www.cbinsights.com/research/blockchain-disrupting-banking/?utm_source=CB+Insights+Newsletter&utm_campaign=aa617392f7-Top_Research_Briefs_02_10_2018&utm_medium=email&utm_term=0_9dc0513989-aa617392f7-89367521

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What’s Next: Securities Settlement and Clearing

Source: Exchange data, Curvegrid

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What’s Next: Securities Settlement and Clearing

Source: Exchange data, Curvegrid

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What’s Next: Securities Settlement and Clearing

Source: Exchange data, Curvegrid

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What’s Next: Securities Settlement and Clearing

Source: forkdelta.github.io

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What’s Next: Securities Settlement and Clearing

Source: etherscan.io

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What’s Next: Trade Finance

Source: https://www.cnbc.com/2018/05/14/hsbc-makes-worlds-first-trade-finance-transaction-using-blockchain.html; http://www.cib.db.com/insights-and-initiatives/flow/trade_finance_and_the_blockchain_three_essential_case_studies.htm

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What’s Next: Insurance

Source: https://www.cbinsights.com/research/blockchain-insurance-disruption/

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What’s Next: Banking the Unbanked, Self-Sovereign Identity

Source: https://insight.wfp.org/what-is-blockchain-and-how-is-it-connected-to-fighting-hunger-7f1b42da9fe

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What’s Next: Document Attestation

Source: https://www.docusign.com/products/blockchain

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Blockchain and Artificial Intelligence (AI)

Source: https://medium.com/@Francesco_AI/the-convergence-of-ai-and-blockchain-whats-the-deal-60c618e3acccImage Credit: Phonlamai Photo/Shutterstock, https://www.shutterstock.com/g/PhonlamaiPhoto

Thank You

ICA JapanJune 26, 2018

Jeff Wentworth, Co-founderjeff@curvegrid.com