Digital Currencies: a Challenge for Luxembourg Financial Sector? - PowerPoint PPT Presentation

Digital Currencies: a Challenge for Luxembourg Financial Sector? Fintech APSI Day – 26 th March by Chris Marcilla Head of Virtual Currencies Working Group

The Tree that hides the Forest Blockchain Sidechain Smart Contracts Blockchain 2.0 Fast Cash-like Secure Transparent Storage Value Private Remittances Authentication 2

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VOLATILITY NO CENTRAL Satoshi Nakamoto, AUTHORITY Founder of Bitcoin 4

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TECHNOLOGY 6

What is Bitcoin? PEER TO PEER NO CENTRAL CONTROL DECENTRALIZED OPEN SOURCE 7

What is Bitcoin? EVERY TRANSACTION IS RECORDED IN A PUBLIC LEDGER: ‘THE BLOCKCHAIN’ 8

How does work a bitcoin transaction? AAA = 5 BTC BBB = 2 BTC JOHN MARY 5 BTC 2 BTC Address AAA Address BBB 9

How does work a bitcoin transaction? MINING COMPETITION VALIDATION 10’ Pushing Transaction REWARD 3 BTC AAA = 5 BTC BBB = 2 BTC JOHN MARY 5 BTC 2 BTC Address AAA Address BBB 10

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How does work a bitcoin transaction? MINING COMPETITION VALIDATION 10’ Pushing Transaction REWARD 3 BTC AAA = 5 BTC BBB = 2 BTC JOHN MARY 5 BTC 2 BTC Address AAA Address BBB 12

How does work a bitcoin transaction? Group Consensus Validation AAA = 2 BTC BBB = 5 BTC JOHN MARY 2 BTC 5 BTC Address AAA Address BBB 13

bitcoin is SCARCE 14

bitcoin is DIVISIBLE 100 cents 100 000 000 Satoshis Minimum Transaction = Less than 1 cent 15

bitcoin is TRANSPORTABLE Small or no Fee Anywhere Real time 16

bitcoin is FUNGIBLE History of every bitcoin is public 17

bitcoin is NOT ANONYMOUS 18

Value Storage Value Transfer Payments Privacy Instantaneous Free 19

Digital Currencies for Banks Today 2-4 days 3-5 seconds CROSS-BORDERS TRANSFERS IN LESS THAN ONE HOUR? 20

Digital Currencies for Funds SMART CONTRACTS SECURITIES CREATION CUSTODY DISTRIBUTION 21

Why 100 k Merchants Accept Bitcoin? HIGH FEES COST SAVINGS FRAUD & CHARGEBACKS RISK ELIMINATION CROSS BORDER INTERCHANGE GLOBAL REACH NEW CUSTOMERS CUSTOMER CAN DISPUTE 22

Hedging bitcoin Volatility OTC REGULATED MARKETS FORWARDS, SWAPS AND FUTURES UP TO 2 YEARS 23

Bitcoin Regulation FEB 2014 : CSSF IS OPEN FOR BUSINESS FEB 2015 : BITLICENSE PUBLISHED MAR 2015 : REGULATION TO COME 24

GAMES OF THRONES 25

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$ 260.0 27 Source: Pantera Capital

Digital Photography in 1995 28

Digital Photography in 1995 29

Services Digitization 10 Billions 10 Billions 41 Billions 10 Billions 30

Who wants to be Uber-ized? 31

THANK YOU. Virtual Currencies Working Group Contact: cmarcilla@accm.lu @chris_marcilla Thanks to: 32