Money & Bitcoin & the Cloud: It's all just data streams, anyway!

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Michael Schonfeld, developer evangelist at Dwolla. Money and the Cloud: It's all just data streams, anyway. Moving money should be just as easy as moving bytes. So why do we keep struggling with 40 year old COBOL-written financial systems? Could this be why Bitcoins have picked up all this momentum? Come take an inside look at how Dwolla is changing a long-stagnated banking industry that is governed by ancient misguided notions of profit.

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Money & Bitcoin & the Cloud: It's all just data streams, anyway!

  1. 1. JUN18Money as a Data StreamMichael Schonfeld / DwollaAt All Things Cloud 2013DWOLLA
  2. 2. HOLLERMEH.BEST WAY TOREACH MEOK WAY TOREACH ME@BaconSeasonmichael@dwolla.comdev.dwolla.com
  3. 3. Are they Broken?PAYMENTS
  4. 4. Text To...(208) 944-4555
  5. 5. “...Fundamentally,it makes no sense that money losesits value when it exchanges hands.”
  6. 6. How much does it costto produce a $1 bill?
  7. 7. How much does it costto produce a $1 bill?9.6¢
  8. 8. WASTEPHYSICAL, PRINTEDMoney $Where does it come from?MATERIALSLABORSHIPPING
  9. 9. DIGITALMoney01010011Where does it come from?SERVER / DB
  10. 10. How much does it costto produce a virtualdollar?
  11. 11. How much does it costto produce a virtualdollar?Linden: 0¢Ven: 0¢....BTC: 0.02¢ (depending of difficulty level)
  12. 12. SMS1. From2.To3. BodyData Packets
  13. 13. SMS Money1. From2.To3. Body1. From2.To3.AmountData Packets
  14. 14. The transfer of MoneyThe transfer of DataBottom Line:
  15. 15. $10.00 $9.40 $8.80 $0.00Erosion of Money(using credit cards)
  16. 16. Why?INTERCHANGE
  17. 17. 4Still Hard to ImplementMassive Infrastructure + BureaucracyMain Reasons312 Legacy Support; Started in the 30’sFraud, Fraud, FraudINTERCHANGE
  18. 18. Sheer incompetencyMany Middlemen16 DigitsFraudMore Features.Sigh.
  19. 19. DevelopersRevoke AccessAggregated HistoryBad Implementation
  20. 20. Bottom LineINTERCHANGE 2.9% + 30¢
  21. 21. Maybe Okay?Not Okay.Milk: $2.50 = ~ $0.40Car: $20,000 = ~ $5802.9% + 30¢
  22. 22. Enter
  23. 23. WHERE?Most of our employees work out of Des Moines, IA.We alsohave people in MO, NY, and KS.IN A NUTSHELL312WHAT?A payment network w/o interchange. Anything under $10 isfree.Anything over $10 costs $0.25 to transfer.WHY?Because interchange fees suck. Money should not lose valuewhen it exchanges hands.
  24. 24. Your bankDWOLLAReceiver’s bankA cash based payment network. No credit cards - only Bank to Bank transactions.
  25. 25. Driven by DevsRESTful APIMobileCool Stuff
  26. 26. OAuth ApproachNo 16-DigitsSECURITY
  27. 27. OAuth
  28. 28. $10.00 $9.40 $8.80 $0.00Erosion of Money(using credit cards)
  29. 29. $10.00 $10.00 $10.00 $10.00Erosion of Money(using Dwolla)
  30. 30. Behind the Scenes
  31. 31. 4Built in the 60’s; Still used today... Ring a bell?Moved $32 Trillion in 2012312 Slow 3 Biz-day TurnaroundInsecure ProtocolAutomatedClearingHouse
  32. 32. FASTA.C.H.CHECKSAFEMOBILEThe Other SideFiSyncCASH
  33. 33. FASTERMoney moves instantly between any 2 financial institutes.FiSync312SAFERThe FI must first verify identifying information of the sendingaccount.ECONOMICALSame price as ACH.
  34. 34. Let’s Code.
  35. 35. THANKS michael@dwolla.com@BaconSeasondev.dwolla.com
  36. 36. &AQ

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