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DCG Bitcoin and Blockchain Tech Summit - Opening Remarks

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On Thursday, Oct. 20, Digital Currency Group hosted its second annual Bitcoin and Blockchain Tech Summit - three days of private events focused on bringing together our network of founders, startups, investors, and corporate strategics. These are the opening remarks presented by our founder and CEO, Barry Silbert, regarding the progress the bitcoin and blockchain ecosystem over the last year, and what DCG is excited about looking forward. Our Director of Development, Meltem Demirors, also announced the launch of our new corporate network.

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DCG Bitcoin and Blockchain Tech Summit - Opening Remarks

  1. 1. OCTOBER 2016 Bitcoin and Blockchain Technology Summit
  2. 2. 2 BY THE NUMBERS •  120 attendees representing 62 portfolio companies and DCG subsidiaries •  180 investors representing 120 VC’s, Family offices, funds, and corporate strategic partners •  65 presentations and a total of 900 slides •  992 one on one meetings with 2,200 individual agenda bookings via Guidebook
  3. 3. OCTOBER 2016 Digital Currency Group The epicenter of bitcoin and blockchain
  4. 4. 4 We believe that digital currency and blockchain technology is going to transform our financial markets and will drive positive economic and social change globally OUR MISSION It is our mission to accelerate the development of a better financial system We do this by building and supporting bitcoin and blockchain companies and leveraging our insights, network and access to capital
  5. 5. 5 DCG TODAY •  Three wholly-owned subsidiaries: •  Grayscale Investments •  Genesis Global Trading •  CoinDesk •  28 employees at DCG and our wholly-owned subsidiaries •  Launching “DCG Corporate Network” in Q1 2017 Subsidiaries Portfolio •  Investments in 88 companies •  Adding ~2 companies per month •  Global network spanning 25 countries; largest in industry •  Over 1,000 employees in DCG family Digital Currency •  Own BTC, XRP, ETC, ZEC
  6. 6. 6 •  C-Corp structure provides us with: •  Flexibility •  Opportunity to build a new investing/operating model •  Permanent capital •  Ability to raise money from strategic investors •  Potential to take DCG public WE ARE NOT A VC FUND
  7. 7. 7 OUR INVESTORS
  8. 8. 8 •  Target 2-5% ownership at seed stage (invest up to $200k) •  Focus on strategic life cycle investments (invest up to $500k in Series A, $1 mm in Series B) •  Join syndicates with other professional investors •  Back the very best teams in our target markets •  Minimize conflicts of interest OUR INVESTING STRATEGY
  9. 9. 9 •  DCG portfolio has been the industry’s early VC pipeline •  Continued success à continuing to build symbiotic relationship with professional investors DCG FUNDING ANALYSIS Announced Industry Deals $1.3 billion Mining Operators $234 million Non-Mining Deals $1.1 billion DCG Companies $755 million DCG companies raised ~70% of industry funding to date DCG INVESTING SUCCESS
  10. 10. 10 1.  Blockchain Registry 2.  Core Infrastructure 3.  Enterprise Blockchain Solutions 4.  Identity & Compliance 5.  Payments 2.0 6.  Smart Contracts 7.  Trading & Tools KEY INVESTMENT AREAS
  11. 11. 11 DCG PORTFOLIO IDENTITY ENTERPRISE BLOCKCHAIN SMART CONTRACTSASSET REGISTRY PAYMENTS 2.0TRADING & TOOLS CORE INFRASTRUCTURE
  12. 12. 12 2016 PORTFOLIO ADDITIONS Blockchain Registry Core Infrastructure Enterprise Blockchain Identity & Compliance Payments 2.0 Smart Contracts Trading & Tools Bitmark Blockstream Bloq Chainalysis 4G Capital Lighting BitOasis Everledger Jiko Services Enigma Civic Bitwala Rootstock Crypto Facilities Fluent Netki Gem Cloudwear Brave SurBTC Skuchain Snapcard Revelator Custos Joystream Tierion Elliptic Streami Token Yours
  13. 13. 13 •  Supply chain •  Trade finance •  Identity & verification •  Cross border payments •  Digital currency as a speculative investment WE ARE EXCITED ABOUT
  14. 14. 14 CROSS BORDER PAYMENTS -- ON/OFF RAMPS
  15. 15. 15 CROSS BORDERS PAYMENTS VIA BITCOIN $0 $20 $40 Oct-15 Jan-16 Apr-16 Jul-16 Millions $0 $50 $100 $150 Oct-15 Jan-16 Apr-16 Jul-16 Millions Source: Align Commerce, BitPesa, Korbit (Hyphen), Snapcard (MassPay) Monthly Volume Cumulative Volume
  16. 16. 16 •  Holds ~1% of all bitcoin BITCOIN INVESTMENT TRUST $0 $70 $140 9/25/13 3/25/14 9/25/14 3/25/15 9/25/15 3/25/16 9/25/16 Millions Assets Under Management
  17. 17. 17 •  Ethereum •  “Smart” Smart Contracts •  Decentralized autonomous organizations •  Initial Coin Offerings WE ARE NOT EXCITED ABOUT…YET
  18. 18. 18 •  Blockchain, blockchain, blockchain -- hundreds of POCs •  Business model for certain “blockchain” companies continues to be challenging; venture investing slowing •  Growing number of companies hitting profitability •  Bitcoin scaling debate rages on…and solutions being developed •  Massive bitcoin transaction volume growth in India, Middle East, Nigeria, Russia, Venezuela •  Digital currency becoming recognized as a new investable asset class, but little institutional investor interest beyond bitcoin •  Central bank exploration into fiat digital currency; quiet on regulatory front INDUSTRY STATE OF AFFAIRS
  19. 19. 19 TOP TEN PREDICTIONS FOR 2017 1.  Bitcoin as a store of value re-emerges as key theme 2.  Bitcoin becomes more accessible to retail and institutional investors via ETF(s) 3.  Cross border payments/remittance using bitcoin hits a $1 billion run rate 4.  Exponential bitcoin transactional growth in India, Japan & Middle East 5.  Explosion of blockchain POCs focusing on supply chain 6.  Identity solution competition heats up…but no leader emerges 7.  SEC comes down hard on ICOs 8.  First >$50 mm M&A transaction 9.  Micropayment models materialize 10.  Bitcoin price on 12/31/17 = higher
  20. 20. OCTOBER 2016 Development Building a global platform
  21. 21. 21 PORTFOLIO DEVELOPMENT We connect our portfolio companies with our broad network to help fuel collaboration, growth, and development of this industry
  22. 22. 22 THE DCG NETWORK Portfolio (88) Academia Policy Co-Investors (700)Corporate Partners (200) Family Offices & Funds (100) Institutions
  23. 23. 23 KEY PORTFOLIO INITIATIVES In storage and compute credits to DCG portfolio companies, infrastructure partner for experimentation$2M >1,000 Introductions to potential partners both within the DCG portfolio and the DCG network In the last 12 months… 40 Events for our portfolio and partners, including workshops, working groups, and webinars, both in the US and abroad 150 New relationships with corporate partners developed – including presentations to boards, executives, and technology groups
  24. 24. 24 THE NEXT EVOLUTION Insights on Every Startup and Consortium Partnerships & POC Matching Events & Exclusive Network Announcing… DCG Corporate Network
  25. 25. 25 JOIN US Contact network@dcg.co for more information!

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