Presentation held at the UAE University November 2016

1. Cryptocurrencies, Blockchain & Smart Contracts:
The New Wave of Decentralization
1
Raffaele Mauro
Managing Director
Endeavor Italy
UAEU
November 2016

2. 2

3. 3
Technology
Finance &
Venture Capital
Policy
Innovation
Cryptofinance,
Smart Contracts &
Bitcoin

4. 4

5. 5

6. Digitalization
Decentralization
Smart
Disintermediation
The 3 Ds
6

7. I - Digital Content
III – Financial &
Political Institutions
II - Physical Goods
The 3 Waves
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8. The First Wave: Digital Content
Publishing Music
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9. Disrupting Business Models
9Source: Internet Trends – Mary Meeker

10. The Second Wave: Physical Goods
Transportation Housing
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11. The Third Wave: Financial Institutions
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13. 13

14. 14
Peer to peer lending Crowdfunding
Disintermediation:
from underground to mainstream

15. 15
Alt & Virtual Currencies

16. 16

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20. 20
2013 peak
2011 “bubble”

21. 21

22. 22
October 2016
Wallets 13+ M 3x Since 2014
Transactions / Day 197,000
Transaction volume ($) $ 116,1 M
Market capitalization $ 11,8 Bn
Merchants 100,000 Microsoft, Expedia, PayPal
Hashrate ≈2,107,000,000 Gh/s -13x Since 2014
VC Investments all time $ 1,3+ Bn
N° of VC backed startups 148
Open source finance goes big

23. 2014 -> Price drops + institutional
acceptance
Mark Andreessen – Tim Draper – Fred Wilson:
Bitcoin today is like the Internet in 1994
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24. 24

25. Distributed public ledger
Network of communicating nodes sharing a public transaction database
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26. 26
Cryptography & transactions
• Private key:
– Digital signature
– Allows spending
• Public key:
– Allows signature
verification
– Represents the
wallet address
• Transactions are
published in the
blockchain

27. 27
Blockchain
• Aimed at proving
transactions
• Contains all
transaction history
• Blocks record
recent
transactions +
connected linearly
• Longest chain
enables
verification / trust
• Generates the
“arrow of time =
Solves the
synchronization
problem in
decentralized
networks

28. Mining
• Miners solve
complex
computational
problems
• Mining enables
transaction
validation +
block generation
• Bitcoins
released
algorithmically
• Fixed amount of
Bitcoins every 10
mins
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29. Monetary supply
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30. Effects
• Decentralized, peer to peer trustless system
• Not dependent on central banks/governments/big
corporations
• Full transparency + pseudonomity
• Cryptographically secure
• Resilience to marketplace failures
• Viral growth
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31. Limits
• Rigid monetary supply => Volatility
• 51% Attack vulnerability
• Reliance on third parties
• Block-Size / Fork problem
• Path dependence
• Inequality
• Transaction speed
• Non-neutrality / political implications
• Other network vulnerabilities
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32. 32
Gini coefficient > ~0.8

33. Remittances
• Half of the world population is unbanked
• Average remittance commission for African migrants > 12,5%
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34. How to get bitcoins
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35. How to easily trade €/$ with Bitcoins
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36. 36
Community (Italy)

37. Ecosystem
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38. 38
Example: Coinbase
Raised $106.7 Million in 4 Rounds
Coinbase lets any consumer to create a Bitcoin wallet and start
buying/selling Bitcoin instantly by connecting their bank account
2012
Seed
Round
$ 600 K
2013
Series A
$ 6,1 M
2013
Series B
$ 25 M
2014
Series C
$ 75 M
Investors include New York Stock Exchange, Andreessen Horowitz, Union
Square Ventures, Draper Fisher Jurveston, Y Combinator

39. Accelerator & Investors
Generalist Specialized
Venture & Growth
Early Stage 39

40. 40

41. 41
Tech giants

42. 42
2015: Regulatory Activism

43. Financial information
43

44. 44
Attracting brainpower - 1

45. 45
Attracting brainpower - 2

46. 46
Cryptocurrency Courses

47. The first dedicated academic journal
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49. 49

50. 21: The first Bitcoin computer
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55. 55
The Blockchain / Bitcoin 2.0 wave

56. 56Source: Startup Management, William Mougayar

57. 57Source: Venture Radar

58. Use cases
58
• App Development: Proof of ownership of modules in app development
• Digital Content: Proof of ownership for digital content storage and delivery
• Ride-Sharing: Points-based value transfer for ride-sharing
• Digital security trading: Ownership and transfer
• Digitization of documents/contracts: Digitization of documents/contracts and proof of ownership for transfers
• Decentralized storage: Decentralized storage using a network of computers on blockchain
• Company incorporations: Digitizing company incorporations, transfer of equity/ownership and governance
• Decentralized Internet and computing resources: Decentralized Internet and computing resources to cover every
home and business
• Home automation: Platform to link the home network and electrical devices to the cloud
• Digital identity: Provides digital identity that protects consumer privacy
• Escrow/custodian service: Escrow/custodian service for the gaming industry; loan servicing and e-commerce
• IT portal: A smart contract IT portal executing order fulfillment in ecommerce/manufacturing
• Patient records: Decentralized patient records management
• Digitizing assets: Improves anti-counterfeit measures
• Reputation management: Helps users engage, share reputation and collect feedback
• Prediction platform: Decentralized prediction platform for the share markets, elections, etc.
• Authenticity of a review: Enables authenticity of a review through trustworthy endorsements for employee peer
reviews
• Marketplace for sales and purchases of digital assets: Proof of ownership and a marketplace for sales and
purchases of digital assets
Source: Let’s Talk Payments

59. 59Source: Tim Swanson

60. On the top of the blockchain
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61. Independent blockchains
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Hyperledger

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67. 67
R3

68. 68Source: Richard Gendal Brown

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Smart contracts
Decentralized
Applications
Decentralized
Autonomous
Organizations

70. 70
Government, Democracy, Law

71. 71
Decentralized “E-bay”

72. 72
Decentralized Financial Networks

73. 73
Decentralized Web Services

74. 74
Decentralized “DropBox”

75. 75
Decentralized Messaging

76. 76
Decentralized Supercomputer

77. 77
Decentralized Prediction Market

78. 78
Decentralized “Uber”

79. 79
Decentralized Collaboration

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Research & Open Applications

81. 81
Blockchain Emergency ID

82. Platform for executing user-generated smart contracts
and decentralized applications
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Decentralized Programming Language
and Universal Platform

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Scenarios for cryptofinance &
decentralized technology
Basic:
- Cryptofinance as sub-industry of Fintech innovation
Optimistic:
- Blockchain as the new payment layer of the Internet, like SMTP for
email
- Internet of Things powered by blockchain technologies
Pessimistic:
- Bubble & crash in cryptoasset (second mega-bubble)
- Bubble & crash in VC in vestments in Bitcoin startups
Utopian / Dystopian:
- Decentralized technology radically disrupts governments, organizations
and financial institutions

84. Thank you !
rmauro@post.harvard.edu
raffaele.mauro@endeavor.org

85. Profile
Raffaele Mauro, Ph.D.
Raffaele Mauro is passionate about technology, policy and global finance.
Now Managing Director at Endeavor Italy, he is focused on high-impact entrepreneurship
and venture capital, providing companies access to smart capital, talent and markets.
Previously he was Head of Finance for Innovation & Entrepreneurship at Intesa Sanpaolo
and worked at venture capital funds such as P101 Ventures, Annapurna Ventures and
OltreVenture. Raffaele holds an MPA from Harvard University, a Ph.D. from Bocconi and is
alumnus of the Singularity University Graduate Studies Program at NASA Ames.
He is also Junior Fellow at the Aspen Institute, member of the “Young European Leaders –
40 under 40” cohort of 2011, member of the scientific committee at Blockchainlab.it and
member of the executive committee at the Global Shapers Hub - Milano, a World Economic
Forum community.
Twitter: @rafr
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