Blockchain Technologies, Digital Currencies and the future of - - PowerPoint PPT Presentation

Blockchain Technologies, Digital Currencies and the future of International Financial Centres

Prepared by Bitt Inc. for ICAB Annual International Business Workshop Presentation August 25, 2017 info@bitt.com

Blockchain and Distributed Ledger Technology

A blockchain is an append-only database of transactions that cannot be tampered with. It consists

• f a few key elements:
• It is a shared, openly accessible, replicable

ledger

• It’s governance is a distributed database

synchronizing mechanism known as a consensus algorithm.

• It represents triple ledger entry bookkeeping

where every transaction that takes place on a distributed ledger has a mathematical receipt called a transaction ID.

• It is publicly verifiable by anyone and every

single transaction is accessible to view.

• It is an immutable ledger and cannot be edited,

forged or tampered with.

Benefits of a Blockchain

• It is ‘trustless’ and allows for ‘trust and

verification’ for all transactions committed to the ledger.

• It operates through consensus and cannot

be tampered with by a single individual or entity.

• It provides an immutable public record of

transactions which add to transparency, accounting and compliance measures.

• It removes the risk of forgery that fiat

currency carries and eliminates the ‘double-spend’ problem.

• It enables an interconnected financial

ecosystems and global value transfer systems.

• It provides mathematical representation of

towards the “Internet of Things”

A blockchain is a secure and open digital ledger system that cannot be tampered with or changed at any time. This means that everyone on the ledger has access to all recorded entries within the blockchain at every moment in the lifespan of the transaction.

What’s Blockchain, Simply Put?

Blockchain Payment: How it Looks

Major Bitcoin Merchants

Bitcoin Payment: How it Looks

Bitcoin Payment: Sending

User A is sending to User B’s Sending to Address:

• 3JUoJ3a4gZ4ZUsj38

cWHQupR8p9MPvP kPK

User B Receiver Address:

• 3JUoJ3a4gZ4ZUsj38

cWHQupR8p9MPvP kPK

User A is sending 0.001222 bitcoin to User B. User A User B

Verification: Payment

Transaction ID:

• 3a42b43656f63659a04

1755e7d2c73cf35698c2 173201522e69a29b8a7 c2af76 Receiver Address:

• 3JUoJ3a4gZ4ZUsj38cW

HQupR8p9MPvPkPK

Verification: Multiple Sources

Transaction ID: 3a42b43656f63659a041755e7d2c73cf35698c2173201522e69a29b8a7c2af76

https://blockchain.info https://blockexplorer.com

Financial Institution Stakeholders

Blockchain Applications

Digital Currencies Types

By issuing digital currency, a central bank can solve the problem

• f not having a legal tender to securely, efficiently and uniformly

be the medium of exchange in electronic payments settings. In effect, a central bank digital currency solves the problem of inefficient physical notes in much the same way that physical notes solved the problem of cumbersome precious metals.

Central Bank Issued Digital Currency

Benefits of Blockchain applied to Digital Cash Issuance

• The inability to transact in ecommerce and

digital settings.

• The recurring cost of printing and coining

physical currency.

• Security and risks of theft in transportation and

storage.

• Logistical challenges and costs of transporting

physical cash.

• Limitation during transactions where both

parties must be present.

• Time consumption to count physical cash.
• The circulation of counterfeit currency.
• Physically damaged currency requiring removal

from circulation.

• Challenges tracking tax evasion and money used

for illicit purposes.

• Bacterial, fungal and virulent contamination of

paper notes and coins

Building Blocks of Digital Money using Blockchain

• Blockchain Digital Assets are

cryptographically-secured tokens that hold value and can be transferred between two parties without the need of a central counterparty.

• Blockchain and Distributed Ledger Technology can be

built on top of to design next generation financial tools such as the “Barbados” digital dollar.

• Financial tools is utilizing blockchain technology can

accomplish micropayments and payment channels to accomplish a low cost, scalable and secure digital fiat currency.

• With blockchain-backed cash the transaction is the

settlement with the added benefit of immutability and integrity.

• These Digital Assets open the door to smart

economies through increased stability, efficiency, security and mobility.

Digitization of The Money Base

The Caribbean Systemic Financial Problems

Restrictive Barriers to Ecommerce and Innovation in Payments Financial Inclusion and Unbanked Citizens Lack of Banking Infrastructure Lengthy Settlement Times High Remittance Cost No Open Gateways and Open Payment Standards Fragmented Currencies De-Risking

The Future of International Financial Centres

• Heavier dependency on Blockchain Technology for

clearing, settlement and value transfer.

Reason: Cheaper, Faster, Secure

• Utilizing the full scope of transparency that

blockchain offers to increase the accounting practices, compliance accuracy and reporting integrity.

Reasons: Immutable and Untampered Ledger Entries

• More accessible and open gateways into legacy

financial services in order to maintain competitive edge.

Reason: Increased Competition

• Democratized and Distributed financial networks in

terms of services offered and accessed.

Reason: Open Standards create opportunity for participation

Questions?

Ask About….

• Application of blockchain within the government

sector and possible areas of research and innovation

• Bitt’s primary mission towards building the

Caribbean’s first Settlement Network

• Bitt’s software model to create a Digital Cash

ecosystem for a Central Bank

• Bitt’s commitment to AML, CTF and AF
• The potential impact of blockchain towards the field
• f accounting, compliance, legal or governance.
• Cryptocurrencies worth buying as a speculative

investment

• Resources to learn more about bitcoin, blockchain

and the future of decentralized digital currencies

• Or anything…