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A Financial Tech Tsunami Driven by Blockchain AI Crypto Economics

How to Cope in / with a Financial and Tech Tsunami driven by Blockchain, AI and Crypto Economics?
The world economy and the financial industry are only in its early days of digitalisation and disruption.
We are going through a wave, or tsunami of emergent disruptive fintech systems and blockchain decentralised models that will change things forever.
At the moment there is a process of digitalisation / Tokenisation of the economy/ financial industry.

A Financial Tech Tsunami Driven by Blockchain AI Crypto Economics

  1. 1. THE EMERGENCY OF A DIGITAL ECONOMY AND CRYPTO ECONOMICS STRATEGY - CONSIDERATIONS, DILIGENCES + RISKS author Dinis Guarda, founder of lifesci | ztudium | intelligenthq.com | hedgethink.com | traderdna.com
  2. 2. The world economy and the financial industry are only in its early days of digitalisation and disruption. We are going through a wave, or tsunami of emergent disruptive fintech systems and blockchain decentralised models that will change things forever. At the moment there is a process of digitalisation / Tokenisation of the economy/ financial industry. CONTEXT DIGITALISATION AND DISRUPTION MODELS
  3. 3. CONTEXT FINTECH TRENDS AND TRANSFORMATIONAL THINKING
  4. 4. CONTEXT FINTECH TRENDS 8 STAGES
  5. 5. CONTEXT FINTECH TREND WHAT EXECUTIVES THINK?
  6. 6. Fintech
  7. 7. EVOLUTION OF WEB, CROWDFUNDING, DIGITAL, CRYPTO ECONOMY Digital AI IOT Blockchain CrytoEconomy and Token Startup new world
  8. 8. IMF’ CHRISTINE LAGARDE AND CRYPTOCURRENCIES 'We are about to see massive disruptions in the financial industry. it's time to get serious about digital currency. (…) It's time for the world's central banks and regulators to get serious about digital currencies." IMF didn't rule out that it could at some point develop its own cryptocurrency. IMF Managing Director Christine Lagarde told CNBC about developments in financial technologies.
  9. 9. The question is how this new digital models of decentralised and distributed finance and economics, can impact the society both in a positive and negative ways and what risks they bring us?
  10. 10. CONTEXT EXPONENTIAL GROWTH - EXPONENTIAL DECAY
  11. 11. CONTEXT EXPONENTIAL GROWTH - FINTECH
  12. 12. CONTEXT EXPONENTIAL GROWTH - TECHNOLOGY - AI
  13. 13. “The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.” Satoshi Nakamoto Bitcoin open source implementation of P2P currency
  14. 14. REALITY CHECK Share of the internet economy in the gross domestic product in G-20 countries in 2016, source statista.com CONTEXT DIGITAL ECONOMY VS DIGITISATION OF WORLD ECONOMY
  15. 15. The global increasing use of digital technologies can add over $1.36 trillion to total global economic output in 2020, (data from 2015) according to a study by Accenture and Oxford Economics Source. This may be only a fraction of the total global gross world product (that has various valuations according to different sources, but generally sized between $70 and $87 trillion source Bloomberg / WEF), but there is still a substantial space for contribution to growth. So how to manage a valuation between real economy and commodities such as gold and the emergence of digital crypto currencies among others Bitcoin? DIGITAL TECHNOLOGIES AND CRYPTO CURRENCIES
  16. 16. In the internet era, the rent-seeking applications captured all the value. The protocols they were built on top of captured almost none. Source Pantera Capital https://medium.com/@PanteraCapital/vcs-missing-97-of-the-trade-blockchain-letter-november-2017- e02abd27c47f WEB VS BLOCKCHAIN PROTOCOLS
  17. 17. Crypto Economics = The emergent commoditisation / digitalisation / Tokenisation of the economy with new digital / crypto models of finance and trading using decentralised DTL blockchain foundational technologies.
  18. 18. The world economy is only in its early days of digitalisation. At the moment there is a process of understanding the parallel between commoditisation and digitalisation / Tokenisation of the economy and special new digital models of finance and trading will be critical in this new world. We can call this new model Crypto Economics. What is challenging is how to leverage real economy and digital economy, and how this affects established financial models? this is paramount as there is a dysfunctional unbalance between all present economic fundamentals, relations between commodities values and all digital assets, such as tech stocks and bitcoin valuations and old solid commodities value such as Gold, silver in one hand and bitcoin and digital currencies or tech platforms worth more than most of the countries. WORLD ECONOMY AND A NEW CRYPTO ECONOMICS MODEL
  19. 19. “Bitcoin’s threat to the financial system and will lead to state-sponsored digital currencies, as governments will have no choice.” Citigroup CEO Michael Corbat In an interview with Bloomberg at The Year Ahead summit in New York CONTEXT DIGITALISATION AND DISRUPTION MODELS
  20. 20. “The sort of big memetic contribution that Satoshi made is the fact that he’s treated cryptographic protocols as being economic protocols, where the economics is not just an afterthought, the incentives are a fundamental building-layer of the entire system.” Vitalik Buterin
  21. 21. IMF DEFINITION OF TAXONOMY OF VIRTUAL CURRENCIES
  22. 22. To put things + the global economy in perspective: Total crypto market $240 billion Total equity market $71 Trillion Global Economy GDP $80 Trillion Global debt over $213 to $300 trillion How is this will change with blockchain cryptocurrencies crypto economics ai GLOBAL ECONOMY, EQUITIES, DEBT AND CRYPTOCURRENCIES
  23. 23. SECURITY CRYPTO ASSETS FUND TOKENECONOMICS - TYPES AND FUNDAMENTALS There are various types ways to measure Tokens – Tokenomics also known as crypto or digital currencies COMMODITY TOKENs MAIN TYPES AND INDUSTRY AREAS UTILITY
  24. 24. THE ALPHA CRYPTO DIGITAL CURRENCY BITCOIN
  25. 25. THE ALPHA CRYPTO - DIGITAL CURRENCY - BITCOIN
  26. 26. MAPPING THE BITCOIN ECOSYSTEM FAMILY TREE
  27. 27. CURRENCY SECURITY VALUE ASSET COLLECTIVE ITEM THE ALPHA CRYPTO - DIGITAL CURRENCY - BITCOIN There are various types ways to measure Tokens - also known as crypto or digital currencies COMMODITY VALUE OF EXCHANGE BITCOIN PAYMENT FORM UTILITY REWARD SYSTEM
  28. 28. BITCOIN HISTORY AND WHY YOU CAN CHEAT WITH IT
  29. 29. BITCOIN NODES ECOSYSTEM (REAL TIME DATA NOV 2017)
  30. 30. BITCOIN AND CRYPTO WALLETS 16M+ A GROWING ECOSYSTEM
  31. 31. Gold and elements can be measured by weight (oz, g, kg, t). Mass and weight are the measuring units endowed by nature. Fiat currencies, or any other abstract commodity or money (including Bitcoin), cannot be measured that way. An abstraction can only be measured in units of itself. Gold and silver are therefore the only form of money today that are traded in weight. Fiat currency on the other hand cannot be measured by anything other than other currency, at least since Nixon ended the convertibility to gold in 1971. In that respect, Bitcoin falls into the same category. Gold is easy to track because it has a global tracking system. This helps to preserve the value of the investment option because it makes it harder to fake, steal or misroute. As we evolve to a digital economy Bitcoin can / is becoming a global digital tracking system. GOLD AND BITCOIN ANALOGY
  32. 32. Tracing or stopping Bitcoins is impossible because it is originally designed to evade government entities. Whether you are going to avoid paying taxes or try to fund activities that should not be funded, Bitcoin is there. It is untrackable and highly-encrypted. No wonder, it was the preferred digital currency of choice for cyber punks, sometimes online drug dealers and people looking to get other people assassinated and other cyber criminals. Keep this in mind because this can be a serious limitation on Bitcoin should global governments decide to regulate cyber currencies. But with the inception of blockchain the system of distributed ledgers and smart contracts a new world is out there. BITCOIN - SMART CONTRACTS AND BLOCKCHAIN
  33. 33. CONCLUSION
  34. 34. CONCLUSION – TOKENS VS STOCKS
  35. 35. Some critical considerations to look: • Governments, regulators and financial institutions need to consider decentralised models in order to enhance industry resilience, integrity and stability and work in governance structures while using data driven technology to leverage this. • Crypto Economics models needs to be at the centre of any government, financial organisation or regulator and by chain effect any business. CONCLUSION
  36. 36. Some critical considerations: • KYC (know your customer) and AML have to be digitalised and use blockchain smart contracts ASAP. • Managing information security to safeguard against attacks for both customer and the bank has to be done through DLT and associated AI and encrypted solutions. • Distributed ledgers and the adoption of blockchains has to become a default setting but not as a fashion but as a part of the DNA both technological and governance wise. CONCLUSION
  37. 37. Some critical considerations: • Users and UI and UX frictionless banking needs to be at the heart of financial services industry and within the sustainable way how to remain competitive. • Best counteractions taken by banks to face the decline of correspondent banking are facing change, being prepared and not runaway of worst deny the tsunami happening now, not in six months, 1, 2, 5 years from now. CONCLUSION
  38. 38. Citigroup CEO Michael Corbat: “I don’t think governments are going to take lightly other people coming in and potentially disrupting their abilities around data, around tax collection, around money laundering, around know-your- customer.”
  39. 39. Are we preparing and educating ourselves for this? Are we preparing common citizens for this? Are we preparing central governments for this? Are we preparing financial organisations, and regulators for this? And how is crypto-economics impacting new emergent sectors, as the sharing economy and circular economy? CONCLUSION AND CALL TO ACTION
  40. 40. Dinis Guarda: founder Has been working / collaborating with the likes of
  41. 41. Thank you How to Cope in a Financial and Tech Tsunami driven by Blockchain, AI and Crypto Economics? author Dinis Guarda, founder of Ztudium / lifesci

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