BLOCKCHAIN HIGHLIGHTS FROM BLOCKSPOT BLOCKCHAIN CRYPTOECONOMICS CONFERENCE
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Editor Olga Snigireva Editing Coordination Daniel Esteves Rolo Bracons Ferreira Olga Snigireva Production Coordination Daniel Esteves Rolo Bracons Ferreira Olga Snigireva Photo Credits Olga Snigireva Design Concept Daniel Esteves Rolo Bracons Ferreira Olga Snigireva Production Support Mário Jorge Caeiro Reviewer Mário Jorge Caeiro Partners Politécnico de Leiria 10
table of contents 13 CORPORATE BLOCKCHAIN Justin Wu, Sebastião de Lancastre, Luis Roque, Paulo Rodrigues, Yegor Karatov
23 DASH AS A DEVELOMENT PLATFORM Fernando Gutierrez
29 THE POWER OF SMART CONTRACTS
35 WHAT’S THE ROLE OF BITCOIN AND CRYPTOCURRENCIES IN THE GLOBAL CONTEXT? Roger Benites
41 DECENTRALIZED WEB: WHAT COULD BE EXPECTED? Anderson McCutcheon
47 LIVING IN YOUR OWN BLOCKCHAIN CITY Graham de Barra
Gonçalo Sá
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12
PART I
CORPORATE BLOCKCHAIN
SPEAKERs
Justin Wu Sebastião de Lancastre Paulo Rodrigues Yegor Karatov Luis Roque 13
Justin Wu
SebastiĂŁo de Lancastre
Luis Roque
Founder and General Manager of Etherify.io
CEO of Easypay
CEO of HUUB
Ethereum Enthusiast and
Worked at UNICRE. In 2000
Co-founder and CEO of
founder of two portuguese
founded Easypay Payment
HUUB, a tech startup focused
stratups: Meetup and
Systems. In 2010 he was
on disrupting the Supply
Etherify.io — a blockchain
responsible for the success
Chain Industry, which have
venture studio based in
of two National reference
set up two operations,
Lisbon, Portugal that brings
projects: the Pordata and Eu
Portugal and Netherlands,
the power of Ethereum to the
Believe.
and is coming now in the US.
real world.
Wu profile
14
Lancastre profile
Roque profile
Paulo Rodrigues
Yegor Karatov
CEO of IntellectEU in Portugal
Chief Compliance Officer of Finom
Worked as Head of the
In 2013, joined Cryptonit
portuguese SWIFT Service
bitcoin exchange as
Bureau and Head of the
compliance manager.
Portuguese blockchain/DLT
Responsible for risk valuation,
Banking Working Group.
client due diligence and AML
Now works for IntellectEU’s
procedures. Co-founded
Lisbon Office and Global
Beetle.io’s in 2016.
Departmentt.
Rodrigues profile
Karatov profile
15
Companies like Microsoft and IBM have already launched their own blockchain platforms. Why is blockchain is reaching corporate in your opinion?
Egor Karatov: Many people and companies today think that blockchain is actually a disruption, but from my point of view, blockchain is not a disruption, but it’s a platform to build disruptive technologies. For example, we have seen Bitcoin is a disruption in finance and we see new disruptive ideas evolve. To answer the question why corporates turn to blockchain, one of the first things is that they see it as a technology which would save them costs. And I think it is one of the pillars they see in blockchain a technology for cutting costs.
Sebastiao de Lancastre: I think the reason one is to develop new things. When Bitcoin was launched, almost ten years ago, I think all of us would like to have it that time, to have a system to send money anywhere in the world, immediately at a costs of cents. Today we cannot do it this without blockchain or Bitcoin. With Bitcoin we can send money anywhere in the world instant at a cost of cents. So, the primary, in my opinion are the solutions. If it is a good solution, then we manage the cost.
Luis Rouque: What we have with blockchain is like a cross-industry application, this is where the interest comes in. We have companies like Microsoft and IBM in a lot of different industries, starting from RainTech to Splash and to Healthcare. We have a lot of different applications and we are trying to integrate things, making our systems capable of exchanging information without the systems. Why? Because there are several different entities in the process, like a ten to eleven hundred entities can happen to be in the process and we want to have a way to easily give the same information to everyone. In any process, you have a lot of validation happen during process, in terms of control, regulatory and financial. Basically, we have different properties that enter the system and we can’t guarantee that this is valid here and also valid 10 miles up front. Let’s talk, everyone has built the communication channel between everyone and have a specific way to solve decisions, and this gives you the visibility, even insurance that you are in the process. The processes become more efficient, so the administrative costs are reduced, because a lot of the paper work is not needed to go around. 16
Paulo Rodrigez : First of all, it’s very important to have such open discussion, when everybody is talking about everything knowing nothing about it. Regarding technology players, basic value of the technology, whether it’s coming from the Bitcoin or Ethereum or any other close community is to sell their own solutions. Companies like IBM, you didn’t mention Oracle, Microsoft they all have their cloud services available. If customers come to them, knowing that blockchain has a value, so these providers would say if you come to us, we have specific services oriented for blockchain. That’s why everyone has a business with them, because they benefit from the new technologies, they build other services that go around blockchain. Blockchain by itself doesn’t solve the problem. It’s a way to bring new features that might come interesting, so that everyone could benefit from it.
Justin Wu : Another point that I’d like to add is that blockchain itself is a single source of regulators and complaints. In certain areas we have high abilities for cost saving like 20-25% of operations, so some of these solutions make the business more efficient. We can use blockchain as this single source of collecting truth because it’s public. We can use it as a unified data source to prevent inefficiencies across different industries, across different companies. It saves a lot of time, so this is why blockchain is already in corporate sphere, especially if we’re talking about companies like Microsoft, we are talking of cutting costs by 10-15-20% a year.
What is maturity level of blockchain solutions and is it ready for production?
Justin Wu : The two key things here: social proof by distributors and also scale. If we have major companies of the world doing services with blockchain, these companies will encourage other companies to say — OK, these guys are betting on blockchain, so we are also going to invest in that. But, there’s the main obstacle for production of blockchain services — a scaling. This scale is important and maybe the amount of transactions per second. Currently according to benchmark, it is able to handle about 2,000 transactions per second. Facebook, for example, is able to handle 20,000 likes per second, while Bitcoin now handles 3 or 4 transactions per second. This is a huge difference in terms of scale. So why are big players not building on Bitcoin blockchain? There are currently over 150,000 different 17
transactions on Bitcoin blockchain, in enterprise solution, which really depends on speed to serve million customers instantaneously, it’s not possible to create mission-critical services on top of blockchain. Ethereum is one of those systems, that is the most closest to solve the scaling issue, later some solutions will be launched on top of Ethereum, which will allow for blockchain transactions to happen with up to one million transactions per second. And this will be finally appropriate.
Paulo Rodrigez : I will say yes, we are ready for production — why do I say that? Because we are started to have different platforms coming to a stable version, which allow to build on top of it. For example, Quorum from JP Morgan — it’s perfectly feasible. I would say also that the only trick there is that the platform was made within JP Morgan. So it’s very difficult to sell them to other banks, because they serve to specific solution. I would say that for now we have already platforms that can give us a tool to have solutions not to address Visa or MasterCard for sure, we haven’t promise for that. That’s the Bitcoin, Bitcoin started addressing directly the banks, it was massive in terms of impact. But we have millions of news cases that don’t need to meet the level performance like Visa or MasterCard, that’s possible with versions that we already have, so for me — I would say yes, we are ready.
Luis Rouque: Yes, I think we are ready to start testing it, because the technology is still on its first phase of development. We have seen the Internet in the beginning of the nineties and I mean that’s a lot of things that must be done in terms of optimizing at the transaction level and even on security base. The main reason for us not having that much of solutions happening today is that we have still a little bit lack of trust and lack of knowledge. Basically, when we need multiple parties to be involved, we have to bring all of them into the same level and they have to trust on the platform that they are using. In terms of protocols, we must have standard protocols for us to be all aligned. It might look to be critical, but if you look to different kind of business like Hyperledger and others, we don’t need that amount of transactions, we can live with a lot less. So mainly we have to ensure the security and ensure that all the parties stay clear, all the conditions, all the parameters that the network is full of are done and that is the main challenge. I think that would be the next step and if smallest companies look at the big ones they see that they are using a specific center – yes, they definitely will use it to solve their own problems.
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Sebastiao de Lancastre: Yes, I agree as well, we are ready to use blockchain from today. The point is that 99% of the solutions don’t need such a huge amount of data to be processed. The point is that, we can start today, we do step by step, that’s the way we do business, all of us, step by step.
Egor Karatov: I would say no because I see a lot of regulatory issues when it comes to blockchain. Of course it’s all about standards. Rules are to be established because industry players — they need to know how do they enter the industry and how do they embrace blockchain. And now we are at the formation stage, so to say. I would compare blockchain to TCP/IP protocol in mid-eighties, for example. When the companies were actually reluctant to go into this technology, but then gradually we’ve seen Hewlett Packard and other industry giants embracing the TCP/IP technology and we’ve seen the World Wide Web evolve. In the nineties we’ve seen the thousands and hundreds of thousands of new companies create new products with that technology. So I would say that blockchain is building the fundamental layer for the future products to evolve on that basis. My colleagues have also mentioned the scalability problem, and I think that this problem is less relevant because there are already solutions that are being offered and I think this already provides enormous opportunities for actually optimizing and scaling the blockchain and everything that’s related to blockchain, I will say no, but we are right at the beginning and this is just a start.
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Which areas of economy will be affected by blockchain?
Egor Karatov: I’m actually working in the area of complaints and risk management regards to clients and because I have competence in this, I can say that digital identity with finance actually embrace blockchain when they actually evaluate risk. We see interesting products pop up promise that will provide possibility to evaluate risk better and take knowledgeable decisions. So I will say,t in 5-10 years a lot of companies will embrace identity solutions based on blockchain.
Sebastiao de Lancastre: We could all use blockchain to share data. Then we have a problem of data protection. So, losing the protection or data, they don’t know. A good example is having different bank accounts. Imagine, every time you go to live in a different country you could carry your accounts with you. This is a very good example of how we can use blockchain and have the same account in different countries with different jurisdictions and everything else. That is possible to have it. These are too many examples of how you could use blockchain to help companies and the society.
Luis Rouque: There are at least three areas. I think it is a cross-industry environment that you have here with the blockchain. But when we look specific, in the supply industry for example. About 80% of the people that are employed in the supply industry are actually doing some administrative work or controlling work. That is because you have to keep up record and you have to be sure that the cargo that is going around the world is actually at that point. So they monitor that location and keep the track of it and also make sure that partners are doing exactly what they should do. In terms of quality control, tracking and also in terms of the regulatory because they have to ensure that the process is being fulfilled in the right way. They have to query your cargo: where is it, where it comes from. There is a lot of different aspects here in terms of the administrative processes that company have. So basically, when you are able to set up a blockchain, all your applications are on top of this. You keep a record of everything that is happening and is on the transaction level. You don’t have to wait for a batch to run at night, you don’t have to wait for someone to pick up the phone and 20
call the carrier to know where the cargo is. So basically, the idea is that all of that information is actually flowing through the system. If you are a regulatory agency you just query it to understand where the cargo is, where the cargo has been. I would that the administrative work is 100% replaced, but I will say that a big percentage of it becomes useless. And I think this is one of the advantages of using blockchain. On the ground, on the transaction level, on the industry level we have a lot to gain with this reduction of the administrative work and the controlling. So basically we could remove all these.
Paulo Rodrigez : Regarding how corporates can involve using blockchain, first of all I would say corporates must understand blockchain. That it’s really hard to understand what’s out there, we can see a lot of articles, we can see that the whole world is moving to blockchain. Everyone is going there and I don’t know and don’t understand why I should go there. So that’s why we arrange this kind of sessions where we explain what blockchain is, where we talk about consensus between different models. So once you understand the concept and once you understand you have the usecase where you have different parties involved that don’t trust each other, that’s a perfect example of blockchain usage. But we have to understand why it is a perfect example. It seems because we can trust in the system instead of trusting a third trusted party. This is not just about the central bank, this is not just notary when we buy a house, it’s everywhere. We always have this third trusted party. And you have third trusted parties in supply chain for example. We should understand that blockchain gives an opportunity of not needing this third trusted party.
Justin Wu : We can also reduce paperwork and administrative force, there are a lot of applications that blockchain helps to solve. And when we have new technologies like blockchain, it’s sometimes useful to compare it to other technology. For example Internet, when it first came up nobody had the idea of social media to emerge. The idea of what I’m trying to say, is that blockchain is a new layer on top of which we can build new applications.
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22
PART II
DASH AS A DEVELOpMENT PLATFORM
SPEAKER
FERNANDO GUTIERREZ 23
Fernando Gutierrez Head of Legal of Dash Core Team
Fernando Gutierrez currently organizes efforts of the Dash
Dash details:
Core Team in Legal and User Support areas, but dabbles in any other activity that he can contribute to, specially Marketing. He has been in the team for more than three years and can no longer remember life before Dash. Besides Dash, he invests in real estate and co-owns a video games company. In the past he held several positions in sales, marketing and business development at one of the largest telecom companies in the world where he was part of a high potential management development program. He is a registered lawyer and economist. 24
https://www.dash.org fernando@dash.org /dashpay /DashPay
I’m going to talk about how Dash is a great eco-system to work in besides a currency. Those of you who are already into cryptocurrencies, probably know Dash. It’s been around for a long time, but there are some of the aspects I want to cover. First of all, I’m going to make a quick overview of the currency aspect of Dash, which is important to understand the only part of the approach.
Dash is the best cryptocurrency for payments
The payment system is broken and was sold
at the moment. And I say this because as it
out, so there was a vacant space. And here
was told before, the better solutions are still
we are, launched in 2014. It’s only three years
to be developed and proven. Just yesterday
and we are around 50 people working for the
BitMEX exchange was recommending at min-
project. And there are developers from other
imum fee of 60 US dollars for a transaction.
crypto-systems, who are also working for us.
Six–zero dollars, and the average fee yester-
The market capitalization is 3.5 billion USD.
day was 14 USD. That makes payments abso-
We are fifth in terms of market cap, behind
lutely impossible in the Bitcoin network. If we
B itcoin, Ethereum and Triple. We’ve been
look at Bitcoin Cash — it has also its challeng-
experiencing huge growth in all the metrics
es, I don’t think they will be able to pull off
recently (Table 1). It not just a number specu-
the payment solution either. Payments is the
lation, there is something behind that.
new space that we go in. We all do payments.
25
KPI
Q3
Q4
Q1
Q2
Q3
QoQ
YoY
2016
2016
2017
2017
2017
Growth
Growth
Active addr. /day (th)
9.61
8.74
18.94
24.88
28.59
+16%
+201%
Trans./day (th)
1.55
1.24
3.12
4.89
5.19
+21%
+282%
Non- MN Active Nodes
2,267
2,087
4,346
5,862
5,712
-3%
+152%
TPV ($, B)
0.12
0.08
1.47
6.43
14.30
+122%
+11,849%
Network congestion
0.4%
0.3%
0.7%
1.0%
1.1%
Avg. hashrate (TH/s)
0.6
1.3
2.4
4.1
31.2
+667%
+4,744%
Reddit subscribers (th)
2.35
2.59
4.23
6.09
9.34
+53%
+297%
Youtube subscribers
3.51
5.21
10.35
14.90
17.80
+19%
+407%
Usage
Health
Social Media
Table 1. Dash Key Performance Indicator
The answer is that we have two tier network
trust. Because if you try to subvert that layer
— we have miners like Bitcoin, we have users
of the network, you would have to buy half of
and we have nodes. At the scaling problem,
it supply. You have to pay for each node. As
45% of the problem goes to miners and 45%
I’ve said they keep paying 45% of the block
g oes to nodes. That gives a global resourc-
reward. In our current prices, each master-
es to grow network and give us the capacity
node is getting 3,000 USD per month, that’s
we need to be able to fill the space of pay-
about 9% of entire investment for them. But
ments. And there are masternodes. They are
besides that, it gives them a lot of resources
centers, alike environment which proofs that
to grow. Yesterday we had the 4,707 master-
you have 1,000 Dash — a current price is al-
nodes, and because we have such big layer
most half of the million dollars. If you proof
of the nodes proven with coins, you can trust
it, you can set a masternode and start getting
Dash network.
payments. Because of that, the network have 26
to integrate cryptocurrency you need to set
Two tier network
up a node with DAPI. DAPI is being launched in January. We are always coming to what a community trusts. In our case, the decentralized API, what it does? It queries. Let’s say, let’s
Miners
Masternotes
build a wallet, a Dash wallet. In this case you would query the network, the masternodes would be selected randomly. Now you would not be a copy of blockchain, but you have all
Users
the advantages of the blockchain. Blockchain is ready for payments, but sometimes we need more things besides payment
Thanks to two tiar network innovation, we can
and ledger of transactions, so we’ve created
build another layer on top of that. We build
all things in the masternodes. We’ve created
s ecure instant payments. We have brought
some storage for network objects. This will al-
the valuation of the instant transaction. User
low us to keep our usernames, password re-
can always do a normal transaction and wait
covery and Appstore. Many things that don’t
for it to be confirmed in the next block, which
need to be stored in the blockchain, but you
happens every 2.5 minutes. But if you decide
don’t want to be stored in a central server ei-
t o have an instant transaction, it is slightly
ther. There’s a complex system braking the
more expensive and depending on the size.
data in many pieces, so you cannot change
T he transaction can be securely confirmed
the objects that are available. This is redun-
in around a second. This is possible because
d ant, many different masternodes at the
those masternodes are checking the transac-
same time can’t see the information.
tions. So you can have technically confirmed transaction in a second. And this is huge ad-
In summary, we have a reliable and scalable
vantage for merchants and anyone who re-
network, business-friendly, and integrations
ceive payments.
a re easy with DAPI. We always want cheap transactions, this is important for business-
We have also private transactions. Bitcoin pri-
es, because we build on top of the economy
vacy is very limited. Our blockchain is not like
o f super expensive market. Then there are
that, we believe the value of everything being
multiple roles in a system: you have miners
public, but we also believe in value of money.
l ike in almost any coin, but you also have
Every single unit of money should be private.
a masternodes and they are not volunteers
Thanks to the masternode scheme that we call
a ny more. They are paid. You can work di-
DAPI — decentralized API, right now we can
rectly for the protocol you get paid. And that’s
integrate a crypto space. Why depending on
mostly how the platform goes.
someone else to get your money? If you want 27
28
PART Iii
THE POWER OF SMART CONTRACTS
SPEAKER
GONÇALO SÁ 29
Gonçalo Sá Decentralized Hacker of ConsenSys Diligence
Self taught Destroyer and Hacker. Gonçalo Sá studied currency
Gonçalo’s details:
exchange and cryptocurrencies markets fundamental and technical analysis for several years. Co-founded 3 startups in very different areas: Events app, BioTech hardware and AdTech. Currently works as security specialist at ConsenSys — a blockchain venture production studio, where help to build an ecosystem of consumer-centric products and enterprise solutions using blockchain technologies, primarily Ethereum. 30
Gonçalo Sá @GNSPS /GNSPS
I’m very much into Decentralization as I think it is the only possible evolution from where we are now. I do a lot of things for Ethereum, so all of the things I’m going to talk about come from the Ethereum eco-system. But I think my statements generally work for any kind of blockchain. And for any blockchain smart contracts definitely are not tokens.
Smart contracts are necessary simple. This is not entirely true, but it’s true with the sense that they are mission-critical. It should be simple and as testable as possible. Ethereum was the first, let’s say, working project production, which was meant to be example of decentralized autonomous organization (theDAO) and this is meant to be a decentralized PC. It was the first currency that had a radically different value proposition through decentralized computation. So, at the time, theDAO came into the ICO, they raised a hundred and sixty million dollars which at the time was 20% of the whole market. It has been instantiated on the Ethereum blockchain, and has no conventional management structure or board of directors. Sadly theDAO’s contract had an exploitable feature and all of its funds started being dumped into a single hacker’s wallet. It was its end before it turned a month old. So, when we think about theDAO and the whole topic of simplicity when I was telling you that smart contracts are necessarily simple, what I meant is it must be like small bits of mission critical software. And we should really care to test it before launch. And we should strive to valuate on chain, not execute.
Smart contracts are expensive. There is no cheap computation, cheap computation happens slowly. Once again, I’m talking about Ethereum eco-system, there are expensive computation, because they are sharing virtual machines. So you pay for every bit of code that gets executed. One example of this is uPort application and platform. Onboarding one user on the uPort App used to cost two point five million Gas. Here Gas is a denomineer of the ETH token, so Gas is dynamically priced, it’s not a token by itself, it’s always dependent on ETH. Let’s say Gas is a different token with dynamic price, so it doesn’t suffer from the inflation or deflation of the currency. Gas is what you pay when you execute smart contracts. 31
2.5M gas* 100 000 users* 15 GWei = 3 750 000 000 000 GWei = 3750 ETH ~= $ 1 125 000 (US Dollars)
Scheme 1. Price for onboarding of 100,000 users
It’s all transparent. We can work through math (Scheme 1). So, onboarding one user used to coast 2.5 million Gas. If you have 100,000 user base, which is not much, it’s a crazy low for most of the projects that we see now. Gwei is just a small, small portion of one Ether. Other words, just one measure of Ether. So for a hundred thousand users you get, you are going to pay this much for its execution, uPort was paying for all of it. This means you pay 3,750 ETH for a hundred thousand user base, which market price is more than 1 million US dollars. So this is completely unsustainable. Smart contracts are really expensive. This brings me to solution of this token, which is issued by offload computation. Make sure that you are offloading your computation to the front end, it’s a new paradigm altogether. Do not try to think of how to build applications so far, not try to build them on top of the Ethereum, that’s not the way to go. You should offload your computation to the front end. There are a couple of scalable solutions up there, that make what used to be normal applications in the market like TrueBit. TrueBit is that kind of scalability where the offload computation is used. You have the computation off chain and you do the computation on chain, but still, Ethereum is more about protocols than it is about applications. Solutions like these make applications that now possible to build on top of Ethereum chain, but still, it’s not its purpose, it’s not its original function. Projects like TrueBit are helping make verifiable computation ever more scalable.
32
Smart contracts are not replacing Web 2.0. I think that calling this Web 3.0 itts a terrible naming decision, because it’s something that is not compatible with what was there before. Web 3.0 is not a replacement for normal web. There are a lot of protocols being built, and the web is becoming something new, but it’s not a replacement. This works side by side, so Web 3.0 will exist side by side with the normal web. But the structure is there, protocols are there, they are not a replacement for TPC\IP protocol. Communication happens on the normal Internet. It’s not something magical that we invented. Web 2.0 protocols will be the building blocks of the Web 3.0.
Smart contacts are a new way for a humans to interact. Now we have programmable money. That’s what smart contracts are. They are nothing more, nothing less than programmable money, which means that we get to program incentives, and if we can program incentives, we can make ourselves organize around common objectives, and this is particularly machine to machine economy to organize itself as web. So we are now coming to a point where we can organize human and machine around common objectives. And this is what actually smart contracts are there for.
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34
PART IV
WHAT’S THE ROLE OF BITCOIN AND CRYPTOCURRENCIES IN THE GLOBAL CONTEXT?
SPEAKER
FERNANDO GUTIERREZ 35
36
Roger Benites Founder of BitInka Bitcoin Platform
Latin american entrepreneur, Roger Benites is a founder
InkaPay details:
and CEO of BitInka — the most important Exchange in Latin America, created in Peru in 2013. Had experience working on major international companies like IBM and GM. As a Bitcoin enthusiast and experienced entrepreneur, has supported cryptocurrency and blockchain technology since its beginning. His vast experience in the financial sector and the e-commerce have given him the necessary vision to develop a simple solution for the daily financial needs of individuals and companies. InkaPay, his new international payments
https://www.inkapay.com roger@bitinka.com /inkapayoficial /inkapayoficial
platform, is the sum of his knowledge and life experiences.
Inkapay is a payment platform that uses blockchain technology to send and receive money transfers among internal and external users in less than 30 minutes across 11 different countries and 9 currencies: American Dollar, Argentinian Peso, Boliviano, Chilean Peso, Colombian Peso, Euro, Nuevo Sol, Real, and Yuan. Coming soon Mexico, India and the UK.
37
We see nothing wrong with transactions fees,
and those Bitcoins are cheaper to exchange
and they are not big if sending money from
into USD. What was actually happening, that
Portugal to Spain because this is the same
person didn’t want Bitcoin, no. He just wanted
b an k s y stem. But if to send money in any
to convert peso into US dollars. And that was
other country, it is completely expensive. It
the challenge. Our first goal was to deal with
can be up to 17% to send money, so imagine
blockchain technology as a local exchange.
a hardworking employee that comes here to Portugal and 17%. He wants to send 100 euro,
First of all, we are trying to teach everyone
but it will be 17 euros to send the money. This
a bo u t c ryptocurrency. The reason why we
is crazy, he is working for fees.
are talking about it, is because you have to know blockchain and Bitcoin, you have to un-
So we want to change this using blockchain
derstand the background of Bitcoin to use it
t ec h n o l ogy. InkaPay is using Bitcoins and
in the exchange and payments. This is huge
allows you to send money at low costs. For
i ss u e f or emerging market sending money
example, a person in Argentina buys Bitcoin,
across the globe for a lot of people.
How does InkaPay work?
38
“
We are heading to conquer Europe and Asia, we have everything prepared to go big — really big.
“ We work with the 35 different banks across
to consider is our local presence, with offices
the world. This means that I see a lot of bank
and extensive integration with the most im-
managers who work with us. And I tell them
portant banks in each of the countries where
that all the bank institutions, financial insti-
we operate, which not only provides us with
tutions from the beginning of Bitcoin under-
a better response capacity, but also provides
e st i m a t e it. The main purpose was to use
the security and confidence of operating with
blockchain technologies to benefit not only
a local company that has the necessary struc-
for the people but also for banks themselves.
ture to deal with any unforeseen events.
The banks would be able to penetrate markets where they didn’t have any business be-
InkaPay allows you to centralize all of your
fore. Blockchain technology offers a synergy
payments and charges on a single platform
between the future and now.
through an easy-to-use, comfortable and intuitive interface. We protect all transactions
InkaPay is a payment platform based on block-
with the most advanced security parameters
chain technology that allows you to send and
and with the permission to move your mon-
receive cash payments in only 30 minutes, in
ey through the main banks of the countries
more than 10 different currencies, in between
where we operate. It is simple. Once your ac-
users using the same platform or outside the
count has been verified, you need to make
platform. We can make it a simple and effec-
a deposit in your local currency. Feel free to
tive process for the whole world. Fast, simple,
receive payments for your products or servic-
and low cost. The platform has a very impor-
es in foreign currency, when and where you
tant advantage that no other exchange on the
are, using the same platform, and withdraw
planet offers: the possibility of buying Bitcoins
from your bank account without complicated
in your local currency… our users do not have
procedures; and with our new E-Commerce
to think about making international transfers
API, which integrates InkaPay with your web-
to be able to recharge their balances in their
site and makes payments and charges from
respective accounts. Another important point
your customers in different currencies. 39
40
PART V
DECENTRALIZED WEB: WHAT COULD BE EXPECTED?
SPEAKER
ANDERSON MCCUTCHEON 41
Anderson McCutcheon Co-founder of Synereo
Anderson McCutcheon has Interdisciplinary technological and
Synereo details:
marketing background.Worked at big gaming platforms: Full TIlt and 888 Holdings. Now he is a Head of Acquisition at Riot Games EU and Co-Founder of Synereo — one of the world’s top decentralization projects, a global social network, powered by a distributed and decentralized server enabled by an extensible open source P2P stack.
42
https://www.synereo.com /synereo /synereo
Synereo company has been in the blockchain space for three years now, we saw old school of ICO in 2015. People who have made decisions very quickly that time probably have been very smart. But people who bought Bitcoin very early could not have foreseen what is happening right now in the market, because it is not caused by decentralization of blockchain or Bitcoins. And there are a lot of very confused people right now who come in the industry, and we talk about confusion that coming out from CEOs, investors, developers and legislation. because some things are very positive, some things are negative and very hard to determine what will be next.
I would like to discuss these differences be-
organization. Blockchain is a lot of things that
tween decentralization, blockchain and cryp-
are not cryptocurrency and is not dependent
tocurrency. These are three very different con-
on cryptocurrency. So, the substance of the
cepts with different companies, with different
blockchain is the cryptocurrency. Basically we
projects. This organization has been around
talk about blockchain is applied to this decen-
for a while, especially if we talk about decen-
tralization, and cryptocurrency is applied to
tralized computings for computing projects,
blockchain. And even within cryptocurrency
like TOR, Torrents or SETI, which have been
itself there are a lot of examples of defining a
used for many years. These are all decentral-
currency. Bitcoin, probably, is the most simple
ized data sharing projects, that has been very
example, because today most people prefer
successfully processed with millions of users.
to use it as a stock value. But it has failed as
All of these decentralization methods have
a currency. We can’t use it because there are
nothing to do with blockchain or crypocurren-
extremely high fees. Dash is a much better
cy. One of the applications of this organiza-
way of using cryptocurrency as a currency.
TOR SETI Blockchain
Identity Public records Currency Securities Process State
Cryptocurrency
Torrents
Blockchain
Decentralisation
tion is the blockchain. It’s a substance of this
Programmable money Anonymous money Digital money Garbage
43
It’s very important to look at this eco-system,
destinations. Eventuality, this is a symptom of
which is now obtain a lot of attention and a lot
the centralization of the Internet. This is not
of money and see where do these projects fit,
a bad thing, it’s a very much necessary pro-
in terms of the value and the money current-
cesses because without them a lot of people
ly pouring into the system. Among many of
would not have access to the Internet. And it’s
holders of Bitcoin there are discussions about
very important to understand that within the
the inflated value, and the fact that all values
competence of our industry, people do not
of cryptocurrencies are inflated because of
care about blockchain, people do care about
Bitcoin. The inside people are discussing it’s
best products developed on the blockchain.
very likely to be a sort of explosion that we
For instance, people are not using Facebook
c an e x pect — not for the technological as-
b ec a u se it’s very well done, they are using
pect, but purely for heavy demand. The peo-
Facebook because everybody uses it and it’s
ple that are not inside but really wanting to
an easiest way to interact and get socialized.
get into it, build projects in this eco-system,
So we should definitely not develop a market
they don’t know what is going to happen. This
from blockchain for normal people because
is important, because they are also calling it
they shouldn’t care about blockchain, but they
a bubble. So we have this three types of peo-
should care about a better product.
ple: the insiders, close to being insiders and the outsiders. They are basically saying differ-
Today if you look at your phone, it has enough
ent things. Other way, my suggestion is, you
storage, bandwidth and computational power
should probably hedge you back if you have
to have this all these WhatsUp or Instagram or
any cryptocurrency. So it’s very important to
Foursquare applications. So you don’t actually
presently make a distinction between decen-
need WhatsUp as a central company, that’s
tralization, blockchain, and cryptocurrency.
worth tens of billions dollars. WhatsUp can work peer-to-peer, it takes up less storage, less
The Internet as you may remember was de-
computational power, less bandwidth than
centralized, if you were using the Internet in
Torrents, if we can power Torrents peer-to-
1995 and 1994, the channel and Internet it-
peer. Basically, we need those giants to build
self was decentralized and it was very hard
a system from technological point. Obviously
to use. Today it’s very simple to use Internet,
our applications work very well. So why would
essentially just joining the Internet you can
we want to change things. The reason is be-
b e p r o vided with five or six websites. And
cause at the moment these are few compa-
this will be enough to meet all your inquiries.
nies we need, they are monetizing our atten-
You can use Facebook for your social publi-
tion. Facebook, for instance, is continuously
cations and get in touch with people, you can
optimized for the purpose of monetization,
use Amazon for all your shopping needs. Four
the more time you spend on Facebook, the
or five destinations would be enough to meet
more money you pour to the system. This ap-
all your needs and you will have thousands
plies to everything: you are essentially being
of use cases that are basically met by these
monetized for spending more time. Compa-
44
nies make sure that you keep coming back.
at the person as they present themselves, I’m
The way of getting a customer come back is to
looking at them through the prism provided
continuously reinforce customer’s beliefs. It is
by the platform, that is selling and controlling
important for you to continuously receive a
my attention. As we move towards a system
string of opinions that are implying to your be-
w he r e data is easily available about every
liefs, and if you get opinion which is outside of
single person, and the person behavior is de-
your beliefs, you unsubscribe. In general peo-
fined by a profit of a company, it’s important
ple tend to subscribe to what they agree with,
for us to gain control over how we measure
and if they see that the thing they subscribed
people and not though the prism of moneti-
to is not in line with their belief, they are more
zation. This is actually one of the dangers of
likely to unsubscribe. This is why companies
the blockchain.
must focus on attention of users. Today all these companies like League of Legends, Netf-
Bl o ckchain is permanent, immutable, open
lix, Instagram, Facebook and Twitter, they are
and digital. China is a good example, because
actually competing in the exact same space.
regime in China is now trying to implement
They are competing for your attention. If you
a system called social scores, where people
spend 40 hours on Facebook then you don’t
would have permanent records that contin-
play League of Legends. All these companies,
uously record their performance as a citizen.
they are optimizing towards the same thing
And people will start to see each other with
— towards your attention. The more time you
a citizen score. It means there are things that
spend with them, the less time you spend on
come to this score and definitely some things
other platforms. The bottom line is that these
that they cannot and should not do. I can have
companies employ perception of the people
the person to behave in the way that I want
to crate very clever machine algorithms that
them to behave in order to make sure that the
actually optimize themselves in order to make
score stay good. So the person will never go
sure that you feel great all the time you spend
to the protests against government, because
on these platforms.
they know that from that point on they will inherit a certain score, their children will have
These platforms, which are now an internal
to inherit that score. And it looks like it may be
p ar t of our lives, have become the way for
blockchain-enabled. It means that every other
us to measure our concerns and the value of
system can form the blockchain and start the
people in our lives. One of the key issues here
data, which can never actually be changed. So
i s t h e fact that we are moving towards the
it’s extremely important for us to provide an-
more data to be informed. Let’s say, 20 years
other view and build decentralized solutions
ago if I would meet anyone, I’d know nothing
possibly based on the blockchain that provide
about them. Today, if I meet a person, one of
users with a different way of looking for peo-
the first things I do is google them and see
ple, not through the prism provided by the
what they look like on Twitter and Facebook.
biggest companies.
And I would point that I’m not actually looking 45
46
PART VI
living in your own blockchain city
SPEAKER
Graham de Barra 47
Graham De Barra CEO of Opera Incubator
CEO and expert in regulation, payments and decentralised
Festy details:
consensus-based algorithms (Blockchain), Graham has launched campaigns in human rights and technology and founded several blockchain startups. With a drive for innovation and technology development, Graham is an ethical entrepreneur and currently leads Opera Incubator — Europe’s largest blockchain incubator based in Cork, Ireland.
http://festy.ie graham@festy.ie /operaincubator /operaincubator
48
The topic of my presentation is about how to live in a blockchain city. This is the theory of a concept of the environment where we desire to use blockchain technology. This sphere and this concept could be applied to Lisbon, could be applied to Porto, could be applied to any city across the world. So, let’s begin to live in a blockchain city.
Blockchain city supposed to be the city where
system if I want to give someone some mon-
you social and economic desires starting to
ey, I don’t need to tell this to anyone. I don’t
integrate providing economic freedom. What
need to say Visa that I need to get your per-
we’re talking about here, we currently live in
mission and you are in control of me, and in
a permission-based system, that is based on
control of her, and everything we touch. That
trust. In other words, we seek permission for
what blockchain city is.
doing things from people that we assume are playing fairly and equally. What we’re really
We are familiar with cryptocurrencies, but for
talking about here actually is permission. You
some reason, we don’t bring it into our every-
get permission to run your buyers, to open
day business. It might be the first time you’ve
yo u r bars, to trade with people from other
heard of it, some may have heard of Bitcoin or
countries, and they also need to get permis-
Ethereum or maybe some other types of cryp-
sion from their governments and their coun-
tocurrencies. What cryptocurrency is? It’s the
tries to be able to trade with you. Of course
emancipation of these financial circles which
the most important one here is your bank ac-
we all are faced. Cryptocurrency is basically
count. All of you have a bank account, I hope…
a currency like asset that exists on the Internet
if you are not one of the unbanked. To have
online. So there’s no bank, there’s no branch,
a bank account, what does it actually mean?
you don’t need to set up a bank account with
We’re again asking for permission to trade in
anyone. There’s no permission. There’s no ID.
businesses. You don’t own your business, the
There is no one to discriminate against you
bank owns your business. You don’t own an-
based on your ethnicity. There’s no one to dis-
ything. So we need to really understand here
criminate you based on the country you are
it’s we need to insert permissionless system.
from. This is what the life with cryptocurren-
What is the permissionless system? What is
cy can bring. But it is still not used in day-to-
the permissionless cash? With permissionless
day life and therefore is not counted as real
49
currency. The idea of using cryptocurrencies
tocurrency on my wristband if I’m doing a pub
in the everyday life rather than just hold it in
crawl or a festival or an event.
a reserve is what we want to prioritize. How to make it? How to get there? How to use Dash
What is Festy? Festy is 50% less fees than Visa,
or ZCash or Bitcoin Cash in the everyday life?
it’s contactless, it’s a payment processor, it’s
How to make this revolution? And this is what
a full POS-system and it’s free for consumers.
I want to talk about.
We do not share the data, we do not sell the data to insurance companies. We have a bit
There are a lot of services where you can use
more integrity unlike any of the Vodafone Pay
your Dash currency, for example Amazon or
or any of the Visa Pay that you’re using and
Ai r bnb, but I want to talk about Festy. This
automate a bookkeeping. This is very handy.
is essential place where you can store your
These are just some of the features. We have
cryptocurrencies and use them in everyday
a very clear transfer history which you can see
life. The inspiration comes from music festival
in the smartphone app. When we looked at
I’ve been last year. It was strikingly obvious
this company we needed to look at how this
for me as a cryptocurrency enthusiast of 5-6
businesses will scale. As any good entrepre-
years, that I need to be able to stand there
ne u r, when they would think about scaling
and use my cryptocurrencies, which should
they’d go to Asia. Let’s picture Seoul, just last
be integrated into day-to-day fashion and let
week we came back from Seoul, South Korea
me use it in retails. I’m wearing one of these
and Hong Kong. We spent some time there,
Festies right now and Festy is essential just
we looked at the Octopus card — a very inter-
like a wallet. There’s really no difference. It’s
esting system which came out in 1997. They
as physical, it’s a cash, I could have my cryp-
ar e way ahead of us at Festy, but they use
“
What cryptocurrency is? It’s the emancipation of these financial circles which we’re all faced.
“ 50
it for transits. It’s not specifically what we’re
for us was internally to see in the future, when
interested in, but once we tackle payments
we have larger adoption rates. Especially at
we can add transit and everything later. If you
festivals, we’ll be able to target and know who
know McDonald’s or 7-eleven, there’s seven
is selling more and what’s there for you. We
million transactions, there is 50 million Hong
k now the places where there’s more beeps
Kong dollars every day. So you can imagine
t han in the others. We know the best plac-
how easy this is. It’s a tap system, 95% of the
es for you to place your fans and your drink
economically active people at Hong Kong have
companies. This is really great for a festival
one of these cards. We did a lot of research
organization.
on different hardware, different POS systems, software’s with different partners, different
By the way, because I think there’s a serious
buyers. For example, in Seoul we went to the
cash flow issue at these places. I unfortunate-
Wo l fgang Pub. We saw some POS-systems
ly don’t have a photo, but there’s a brilliant
that were integrated into the
moment with one of my de-
bar, so the car would literally
velopers. We went to Body’n
just slide over the table as we
Soul this year in West County
were getting the drink. This is
Westmeath. It was the same
when you’re dealing with 30
as Electric Picnic. There was a
million people in this small is-
spray-painted van of Bank of
land. This is exactly how they
Ireland with an ATM parked
fix their problems. They don’t
in the middle of a field with
h a ve issues of time delays:
about a hundred young fel-
going to the banks, going to
l ows trying to get cash out
ATMs. What they have is very
of it. That’s the competition,
good. And that’s the kind of
the same situation occurred
system we want to build. This would be an
and Electric Picnic. People were queuing for
example of machine: it’s deep, it’s beep and
up to three hours to get cash out from ATM
the transaction is done.
and there was a limit of 50 per withdrawal. So currently there’s a huge monopoly by these
We were able to do a proof of concept with
p ermission based companies that you all
fifty people. They were volunteering at wel-
work with. Why are you working with them?
fare and we thought it would be a good idea
No one told you have to work with them, but
to sponsor the welfare team. So we gave them
somehow you do. You bought the illusion that
e ach a Festy wristband at the beginning of
you’re paying someone four percent which is
Electric Picnic and by the end of it pretty much
more than you’re paying your own staff. Why
a ll of them had spent and depleted all of
don’t you get rid of them? Fire them! We suc-
funds that we had placed on each wristband.
c essfully launched an alternative. We’d like
That was very exciting to get some of analytic
to integrate such systems in your buyers, in
data from 3 days of Picnic. Some of that data
your locations such as cryptocurrency ATMs, 51
so people can go in from cash. ATM is not re-
liament recently, which is another partner of
ally the word it operates like an ATM, but it
o urs, they’ve quote-on-quote. They will not
wouldn’t be classified as an ATM. It wouldn’t
regulate cryptocurrency. That was stifle inno-
require some of the financial licenses of reg-
vation, there were also conversations, debate
ular money because it’s not regular money.
and discussion where banks were called out.
It’s cryptocurrency. Cryptocurrency is current-
These were the members of European Parlia-
ly recognized as a currency by the European
ment, of your Parliament, these people are
Court of Justice. In most countries it’s com-
representing you. So this directly affects you
pletely allowed to occur because people are
as a business and as a citizen. One question
realizing that actually this is safe, this is the
was posed by a bank and it was something
life, this is the lifeline for the economy. We’ve
l ike how can you allow these online digital
been based on banking for so long and this
c urrencies to operate without any control.
i s really the solution. At and European Par-
Meaning where are we in this, where is our
52
slice of the pie? Isn’t this a Ponzi scheme? And
opposite of what your Visa card payment pro-
t o be quite honest, because you’re honest
cessor wants, because they want your cut.
businessmen. Here I have to be honest with you. All currencies are Ponzi schemes. It was
By adopting Festy we allow person-to-person
a very deep revelation for me, for European
t ransactions to happen like cash, but living
Parliament to state this. The only way for us to
on line where you don’t need any permission
move forward and out of this fraud which has
t o set up your bank account. With Festy or
been basically going on for so so long, is to fil-
with cryptocurrency you can keep in your own
lip beyond these currencies and towards cryp-
hands. So if you want to save some fees stop
tocurrencies. At least we can control them, we
waiting for permission.
can understand them. They are transparent online where you can see transactions. This is the opposite of what a bank has, this is the
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