A deep dive into the structure of crypto-assets. This presentation was shown during a crypto community event in Vilnius, Lithuania.

2. Exorior Capital is different from the typical
crypto fund – we do not look for
fundamentally “strong” coins to hold.
Crypto space is attractive in terms of market
inefficiencies.
Our strategies ensure episodic participation
and our exposure is hedged.

3. Crypto-assets valuation methods are not
yet reliable or historically tested
Levels of adoption are low
Regulatory framework development is
cumbersome

4. Over-reaction
Infrastructure
Hard forks
Wallet freezes
Coin events
New listings
Post-ICO price imbalances

5. AIM
To trade using the latest
information
PRINCIPLES
Automated tools collect
all of the latest
information about the
market and allows us to
make informed trades

6. Early publications
1991 - Non-interactive zero-knowledge (MIT)
According to the CIA, Satoshi Nakamoto means
“Central intelligence” in Japanese
1999 - Milton Freedman (Nobel prize winner)
1996 - The cryptography of anonymous
electronic cash (NSA)

7. 1.
1989
Digicash (David Lee Chaum)
3.
1997
HashCash (Dr. Adam Back)
2.
1996
e-gold (Gold & Silver Reserve Inc.)
4.
1998
B-money (Wei Dai)

8. What is an asset class?
An asset class is a group of instruments which
have similar financial characteristics and
behave similarly in the marketplace.

9. Source: “Cryptoassets” by Chris Burniske and Jack Tatar
CRYPTO-TOKEN
CRYPTO-COMMODITY
CRYPTO-
CURRENCY Unit fulfilling three fundamental purposes
to exist: store of value, medium of
exchange and unit of account.
Raw online material to build
finished digital goods
Finished digital good and
services of the future

10. CRYPTO-TOKEN
CRYPTO-COMMODITY
CRYPTO-
CURRENCY Unit fulfilling three fundamental purposes
to exist: store of value, medium of
exchange and unit of account.
Raw online material to build
finished digital goods
Finished digital good and
services of the future
Economic theory
and technology
Game theory, Proof-of-work, Hashing algorithm, Merkle tree, Blockchain

11. CRYPTO-TOKEN
CRYPTO-COMMODITY
CRYPTO-
CURRENCY Unit fulfilling three fundamental purposes
to exist: store of value, medium of
exchange and unit of account.
Raw online material to build
finished digital goods
Finished digital good and
services of the future
Game theory, Proof-of-work, Hashing algorithm, Merkle tree, Blockchain
Commodities:
electricity and
hardware
components
Labor Network
bandwidth and
latency
Economic theory
and technology
Real world inputs

12. Money is memory
“Currency is a generally accepted form of money,
which is issued by a central government and
circulated within an economy.”
Investopedia
“From a technological point of view, money is
equivalent to a primitive form of memory.”
Narayana R. Kocherlakota (President, FED)

13. Decentralized issuance*
Represent memory
Peer-to-peer
Censorship resistant
Fixed supply*
Centrally issued
Represent memory and trust
Require intermediaries
Subject to censorship
Monetary policy tool
Fiat Crypto
Money supply (M0)
90 trillion USD
Crypto network value
0.4 trillion USD
*For incumbent cryptocurrencies

14. Source: US Federal Reserve Bank
Central Bank Cryptocurrecy
Bitcoin

15. Source: Woobull charts

16. Raw material building blocks
“A commodity is a basic good used in commerce
and are most often used as inputs in the
production of other goods or services. ”
Investopedia
“In an increasingly digital world, it makes sense
that we have digital commodities, such as
compute power, storage capacity and network
bandwidth.”
Chris Burniske

17. Fiat Crypto
Manufacturing
material
Energy source
Food
Store of value
Transcoding
Storage
capacity
Network
bandwidth
Computing
power
…
Proxy re-
encryption

18. A decentralized computer that everyone can use and
build upon
What is it?
Runs globally distributed computer programs, or
smart contracts
What it does?
Allows decentralization of computer programs.
Why do we
need it?
Conditional transactions: “IF user puts enough
money and IF right code is typed and IF there is
enough inventory, THEN user gets Coca-Cola from
the vending machine”.
What is a smart
contract?

19. 0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
Transactionsperday
Date
Transactions on Ethereum network

20. Digital goods and services
“A good or product traded in the non-physical
realm, typically in online communities and
games.”
Investopedia

21. Fungible
tokens
Non-fungible
tokens
Token to incentivize people to report
outcomes of events truthfully.
Augur
Token to reward people for their
attention.
Basic
attention
token
Token used for personal
identification.
Civic
Token to reward people for content
creation.
Steem
Game where players can buy, own
and sell unique tokens.
Cryptokitties

22. Privacy
concerns
Need for
automation
Speculative
profits
Main drivers of token ecosystem development

23. Source: DappRadar
Real activity of DApps, % of active DApps, 2017-07-03
24h transactions
99%
1%
98%
2%
Daily active users
Active*
Inactive
*More than 1000 daily active users or more than 1000 transactions over 24h
IDEX, ForkDelta,
CryptoKitties

24. The internet of money
“We are all now connected by the Internet, like
neurons in a giant brain”
Stephen Hawking
“I think the internet is going to be one of the
major forces for reducing the role of
government. The one thing that’s missing but
that will soon be developed, is a reliable e-cash.”
Milton Friedman

25. Accessible globallyAccessible globally
Internet Bitcoin
Decentralized
Anyone can add, edit and
view information
Decentralized
Anyone can earn, hold and
spend value
Governed by protocol Governed by protocol
Hard perception and low
usage in the early days
Hard perception and low
usage in the early days

26. Source: World Wide Web Consortium,, CoinDesk
Network access
(Ethernet, X.25, ARP …)
Internet protocol (IP)
Transport control
protocol (TCP)
Bitcoin blockchain
Application layer (FTP,
SMTP, …)
Application data
(Gmail, )
?
Network access
layer
Internet layer
Transport layer
Bitcoin protocol
Lightning
network (LN)
Application layer