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Blockchain and Financial Services: Everything could be different - APEC

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APEC leadership May 2016 presentation in Arequipa, Peru. Blockchain and Financial Services: Everything could be different

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Blockchain and Financial Services: Everything could be different - APEC

  1. 1. Blockchain and Financial Services Everything could be different THE IMPACT OF TECHNOLOGY ON SERVICES DELIVERY Mark Mueller-Eberstein Rutgers University The Innovation Economy Institute CEO of Adgetec Corporation @MarkMeberstein WeChat: MarkMEberstein
  2. 2. ©Mark Mueller-Eberstein & Adgetec Corporation “Every inefficiency in a system will be removed (by technology) sooner or later.” 2 Mark Mueller-Eberstein
  3. 3. Organizations that benefit from inefficiencies will see their business models disappear when customers have the option to get “better (experience)” for “cheaper.” 3 Ecommerce: Amazon; Alibaba,… Cellphones vs. land lines / phone booth Calls & emails vs. WeChat or WhatsApp On premise computing vs. cloud computing Trying to call a taxi or requesting an “Uber” Owning a car or paying for transportation (incl. car sharing…) Cars & trucks with drivers vs. driverless vehicles … …. Financial Services Industry?
  4. 4. Mark Mueller-Eberstein & Adgetec Corporation What differentiates Winners from Losers? Low IT Capability Maturity HIGH IT Capability Maturity
  5. 5. Mark Mueller-Eberstein & Adgetec Corporation “Top Companies in 2007” Low IT Capability Maturity HIGH IT Capability Maturity
  6. 6. Mark Mueller-Eberstein & Adgetec Corporation “….. And where they are in 2015” Low IT Capability Maturity HIGH IT Capability Maturity
  7. 7. Opportunity for Everybody !  Organizations size doesn’t really matter (anymore)  Geographical location is less relevant  Access and Connectivity are key enablers  Agile and creative people will seize the opportunities (if allowed and enabled)  People need to be able to challenge and voice even stupid ideas for discussion  Often new players take on (and out) the established incumbents 7
  8. 8. ©Mark Mueller-Eberstein & Adgetec Corporation It’s the F A S T who eat the SLOW
  9. 9. ©Mark Mueller-Eberstein & Adgetec Corporation The trick is being open to changing your mind, and more importantly, knowing when to do so. George Bernard Shaw “Those who cannot change their minds cannot change anything." ©Mark Mueller-Eberstein & Adgetec Corporation
  10. 10. At least $1.7 trillion in “inefficiencies” up for grabs… 11 The Economist, 2014
  11. 11. ©Mark Mueller-Eberstein & Adgetec Corporation And that is only the banking system… Think any kind of transaction and related services… 12
  12. 12. … for example….  Records of estates  Records of shares  Any financial transaction  Voting  Domain control (DNS)  Central Trust (“Escrow”) for any kind of deals  Messaging (“signed and unchangeable”)  IP management  … 13
  13. 13. The more you learn, the more opportunity you will see. Nobody knew in early 1990s what the Internet was or would lead to. Milton Friedman: “Eventually, there will be a digital value system beyond the nation state.” 14
  14. 14. Blockchain  Blockchain is like the Internet (it changed everything)  The implications for traditional financial services are massive  The end of banks?  The end of central banks?  Big implications for regulators. 16
  15. 15. ©Mark Mueller-Eberstein & Adgetec Corporation The “technical stuff”… 17
  16. 16. ©Mark Mueller-Eberstein & Adgetec Corporation Networking…. 18 Old school computing and business Changed computing and business over the last 20 years
  17. 17. ©Mark Mueller-Eberstein & Adgetec Corporation Peer-to-Peer (P2P) 19
  18. 18. Peer-to-Peer (P2P) Networking is everywhere P2P (structured & Unstructured) File Sharing • Napster • BitTorrent Media • Spotify • Popcorntime • PPLive (TV) Marketplaces • BitCoin • “Sharing Economy” Cryptography Storage & Search • Minerva Project Communication • Skype • Google Talk • I M Mobile • WeChat • WhatsApp • Line Messaging as Payment E-Commerce • E-Bay • AirBnB • Uber Defense • DARPA High Performance Computing • Grid Computing • HIVE • SETI@home Analytics techniques exchange • Chinook
  19. 19. Many commercial or government services are basically “databases” that are centrally owned and managed.
  20. 20. Transactions are recorded in a “Ledger” 22
  21. 21. Central Control = Central Point of Failure 23
  22. 22. Blockchain technology allows a distributed ledger vs. a centrally managed ledger. All transactions within a block are recorded and visible. And can never be changed. Blockchain with out a “token” is just a database 24
  23. 23. Blockchain – in 2 minutes 25
  24. 24. Benefits of Blockchain secured distributed leger vs. central ledger  Information can be put on block chain and can never be changed  Worldwide ledger: IP, land titles, art,...  Full transparency for every transaction  "Record every information forever" 26
  25. 25. Bitcoin vs. Blockchain  Bitcoin is (currently the best know) usage of blockchain technology  One of many digital currencies using blockchain technology  Many more uses for blockchain technology other than “currency”  Why digital currency is used? No need to use exchange (e.g. banks) for people who know/use Bitcoin Direct exchange between individuals is possible 27
  26. 26. Bitcoin basics  Insider: "It feels like when we first developed the Internet"  It is a way to transfer value in the Internet  Bitcoin can not be copied. First "scarce" digital asset.  Bitcoin protocol (blockchain) is final piece of Internet puzzle  Very early and experimental stage  As longer as Bitcoin exists, the stronger it gets  60% of all Bitcoin mining done in China (up from 40% 8 months ago)  New block created every ten minutes 28
  27. 27. ©Mark Mueller-Eberstein & Adgetec Corporation How “real” is Bitcoin? 29 ... Most virtual believe might be "love" Virtual goods are as real as people believe in them... There is very little “real money”. Most are “0s””1s” on some bank’s database
  28. 28. ©Mark Mueller-Eberstein & Adgetec Corporation How “real” is blockchain? 30  Goldman-Sachs invest $500+ Million  Microsoft declares “blockchain” as one of the key “must win” workloads for their Azure platform and business (and announced collaboration with many US banks)  Some governments invest into developing their own “local” blockchains
  29. 29. ©Mark Mueller-Eberstein & Adgetec Corporation Understanding change ©Mark Mueller-Eberstein & Adgetec Corporation
  30. 30. ©Mark Mueller-Eberstein & Adgetec Corporation is scary Change
  31. 31. ©Mark Mueller-Eberstein & Adgetec Corporation have emotions People
  32. 32. ©Mark Mueller-Eberstein & Adgetec Corporation Is constant Uncertainty
  33. 33. Endings Exploration New Beginnings Reconciliation Reorientation Recommitment Denial Anxiety Shock Fear Anger Frustration Confusion Stress Creativity Approach-Avoidance Skepticism Acceptance Impatience Hope Energy Enthusiasm Productivity Morale Theory of Transition Schlossberg; 1981 & 1995
  34. 34. Regulations and restrictions? From an economist perspective: Every restriction (and forced inefficiency) comes with a cost. Lets be clear who carries the cost and if that is in the best interest of an economy and society. 37
  35. 35. ©Mark Mueller-Eberstein & Adgetec Corporation Your Opportunity! 1.Change will be fundamental on business, technology, processes, structures and people. 2.Technology leaders are positioned to drive and realize the vision and image of the future.
  36. 36. ©Mark Mueller-Eberstein & Adgetec Corporation “IT TAKES TEAMWORK DO MAKE THE DREAM WORK!” John C. Maxwell; Walt Disney; Martin Luther King Jr.; Captain Kirk;…
  37. 37. ©Mark Mueller-Eberstein & Adgetec Corporation NOW … “MAKE IT SO!”
  38. 38. THANK YOU!  MarkME@adgetec.com  Twitter: MarkMEberstein  US +1 855.423.4383 Mark Mueller-Eberstein The Innovation Economy Research Institute CEO of Adgetec Corporation Bestselling Author WeChat: MarkMEberstein

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