P2P currencies: what's next after Bitcoin

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Sebastiano Scròfina, Dropis cofounder, talks at the University of Rome "Roma Tre", during Codemotion 2012

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  • P2P currencies: what's next after Bitcoin

    1. 1. P2P currencies:what’s next after Bitcoin?Sebastiano Scrofinasebastiano@dropis.com – Dropis
    2. 2. Introduction• Who am I ?• What is this talk about ? Sebastiano Scrofina 2 sebastiano@dropis.com – Dropis
    3. 3. Money timeline Gift and Money is Money is Money is Money is barter barley gold, silver & a receipt a banknote copperBeginning of time 3000 BC 700 BC 1650 1694 Sebastiano Scrofina 3 sebastiano@dropis.com – Dropis
    4. 4. Money timeline Money is Money is Money is Money is Money is a banknote USD fiat bitcoin next currency1694 1944 1971 2009 2020 Sebastiano Scrofina 4 sebastiano@dropis.com – Dropis
    5. 5. Features comparison Gold Fiat Bitcoin Intrinsic value ✔Widely accepted ✔ ✔ Ease of use ✔ ✔ Sebastiano Scrofina 5 sebastiano@dropis.com – Dropis
    6. 6. Definitions• Money naive, academic, specific• Currency implementation of money• Protocol rules to exchange information Sebastiano Scrofina 6 sebastiano@dropis.com – Dropis
    7. 7. Open questions• Is economics a natural science ?• Who’s the expert ?• Why a de facto monopoly ? Sebastiano Scrofina 7 sebastiano@dropis.com – Dropis
    8. 8. What is Bitcoin ?• Decentralized electronic cash system• Open source client• Born January 2009• Developed by Satoshi Nakamoto• Exchange rate with fiat Sebastiano Scrofina 8 sebastiano@dropis.com – Dropis
    9. 9. What is Bitcoin ? limited money supply } no middleman cheap transactionspseudonymous Sebastiano Scrofina 9 sebastiano@dropis.com – Dropis
    10. 10. How does it work ? block chain mining Sebastiano Scrofina 10 sebastiano@dropis.com – Dropis
    11. 11. More features Gold Fiat Bitcoin Limited supply ✔ ✔Not issued upon debt ✔ ✔ Transparency ✔ Decentralization ✔ ? Micro-transactions ✔ Sebastiano Scrofina 11 sebastiano@dropis.com – Dropis
    12. 12. N E X TCURRENCYOPPORTUNITY Sebastiano Scrofina 12 sebastiano@dropis.com – Dropis
    13. 13. Internet disrupted advertisement G O O G L E ADVERTISING$36bn REVENUES 7.7% OF WORLD’SSource: Wikipedia, “Google” and “advertisement” $467bn ADVERTISEMENT MARKET Sebastiano Scrofina 13 sebastiano@dropis.com – Dropis
    14. 14. Internet disrupted communication SKYPE ROUTES54bnminutes 13% O F Y E A R LY 406bn M I N U T E S INTERNATIONAL CALLSSource: TeleGeography 2009 Sebastiano Scrofina 14 sebastiano@dropis.com – Dropis
    15. 15. Has Internet disrupted money ? $41M BITCOIN$9.8tn ACCOUNTS FORopportunity? 0.00004% OF WORLD’S $98tn M3 MONEY MASS Sources: Wikipedia, inverted pyramid of global liquidity | bitcoincharts.com Sebastiano Scrofina 15 sebastiano@dropis.com – Dropis
    16. 16. How big is BIG?200 times bigger. WORLD M3 WORLD ADVERTISEMENT MARKET MARKET Source: Wikipedia, “Google”, “advertisement” and “inverted pyramid of global liquidity” Sebastiano Scrofina 16 sebastiano@dropis.com – Dropis
    17. 17. Why 0.00004% only ?convenient ? { • to buy illegal goods • for microtransactions valuable ? { • no intrinsic value (e.g. gold) • no backing authority (e.g. USD) Sebastiano Scrofina 17 sebastiano@dropis.com – Dropis
    18. 18. What is Bitcoin then ?• digital store of value• volatility risk• can act as a electronic cash- like currency Sebastiano Scrofina 18 sebastiano@dropis.com – Dropis
    19. 19. Is the next currency here ?• Namecoin name/value datastore• Solidcoin fairer and not scarce as Bitcoin• Ixcoin shorter maturity period• Litecoin faster blocks, 81M coins• Devcoin developers over miners• Freicoin Bitcoin with demurrage• Mastercoin a new layer on top of Bitcoin• Geistgeld and many more coming... Sebastiano Scrofina 19 sebastiano@dropis.com – Dropis
    20. 20. N E X TCURRENCYF E AT U R E S Sebastiano Scrofina 20 sebastiano@dropis.com – Dropis
    21. 21. If the block chain is like SVN { • central authority • single point of failure (e.g. takeover, infiltration, etc) { • decentralized (not just distributed)Next currency will be like • no central repository Git • no central authority • no single point of failureReference: Laurie, “Decentralized currencies are probably impossible”, 2011 Sebastiano Scrofina 21 sebastiano@dropis.com – Dropis
    22. 22. { • self-referential Access to • restricted, slow, inefficient credit • days • success rate ~10% [3] information Access to { • universal, fast, efficient • seconds • success rate ~70% [1,2,4][1] http://www.ibtimes.com/articles/61429/20100911/google-instant-redefines-search-but-is-world-ready-1.htm[2] http://newyork.ibtimes.com/articles/197961/20110815/bing-yahoo-google-search-engine-effective-success-rate.htm[3] http://en.wikipedia.org/wiki/Microfinance[4] http://mrpogson.com/2011/06/28/99-9949-uptime-for-google-apps-in-2011/ Sebastiano Scrofina 22 sebastiano@dropis.com – Dropis
    23. 23. What if banks owned search ? Sebastiano Scrofina 23 sebastiano@dropis.com – Dropis
    24. 24. Access to credit is broken• Banks are risk adverse• “Poor” people are trustworthy (Yunus, 2006)• Healthy credit / wealth link (De Soto, 2000)• Vicious circle, self-fulfilling prophecy Sebastiano Scrofina 24 sebastiano@dropis.com – Dropis
    25. 25. Overproduction (?!)Greece 2008-2011 { unemployment grew from 7.2% to 21% but skills and needs did not change dramatically Food 2001 { 9M people died of starvation [1] but EU spent €150M to destroy 1M tons of edible food [2][2] Source: UK FPH, “A cap on health”, [1] FAO Sebastiano Scrofina 25 sebastiano@dropis.com – Dropis
    26. 26. Internet drives abundance• negligible marginal costs• potential audience (look at p2p) Sebastiano Scrofina 26 sebastiano@dropis.com – Dropis
    27. 27. If Bitcoin is like gold { • scarce • limitedNext currency will be like PageRank { • always enough • abundant Sebastiano Scrofina 27 sebastiano@dropis.com – Dropis
    28. 28. Gold Fiat Bitcoin NextEasy access to credit ✔ Abundance ✔ Crisis-proof ✔ Sebastiano Scrofina 28 sebastiano@dropis.com – Dropis
    29. 29. Go and hack the money Money is ___________2020 {• • • • money is information currency is a protocol the current protocol is broken internet needs its own currency Sebastiano Scrofina 29 sebastiano@dropis.com – Dropis
    30. 30. $5MSatoshi Nakamoto’s worth in BTC Sebastiano Scrofina 30 sebastiano@dropis.com – Dropis
    31. 31. Our contributionDropis { • we started up a company • we’re developing a currency Sebastiano Scrofina 31 sebastiano@dropis.com – Dropis
    32. 32. work@dropis.cominvest@dropis.com@dropisappwww.dropis.com Sebastiano Scrofina 32 sebastiano@dropis.com – Dropis

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