June 16th 2016 keynote presentation at North America's Securities Operations Conference in Toronto, covering the impact of the blockchain on financial services.

2. What Blockchain Means for
Your Business
William Mougayar
Author, The Business Blockchain
General Partner, Virtual Capital Ventures
SecOps North America 2016

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The Blockchain Novelty
Cryptography
Science
BLOCKCHAIN
Software
Engineering
Cryptography
Science
Game
Theory

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The Blockchain Implications
Cryptography
Science
BLOCKCHAIN
Technical
LegalBusiness

5. 5© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
How to view the Blockchain
Source: The Business Blockchain (Wiley, 2016) © William Mougayar

6. 6© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
Many Facets to the Blockchain
① Cryptocurrency
② Computing Infrastructure
③ Transaction Platform
④ Decentralized Database
⑤ Distributed Accounting Ledger
⑥ Development Platform
⑦ Open Source Software
⑧ Financial Services Marketplace
⑨ Peer-to-Peer Network
⑩ Trust Services Layer

7. Blockchains, like the Web, need the Internet
I N T E R N E T
WORLD WIDE WEB BLOCKCHAINS
Source: The Business Blockchain (Wiley, 2016) © William Mougayar

8. Source: The Business Blockchain (Wiley, 2016) © William Mougayar
Types of Blockchain Applications

9. Four Types of Blockchain Applications
Source: The Business Blockchain
(Wiley, 2016) © William Mougayar

10. In the mid-2000’s FinTech Attacked the Banks,
and it was called “Unbundling Banking”
U.S.
Europe
 In startup fashion,
most attacks aren’t
head-on, start
small & look
harmless at first
sights, therefore
are ignored
 So, the banks
didn’t feel FinTech
initially, because it
crept up
Graphs Source: CB Insights

13. Innovation Potential for Blockchain
UNREGULATED
ENVIRONMENTS
REGULATED
ENVIRONMENTS

14. 14© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
Blockchain and Regulation
① Risk is regulatory confusion
② New regulations needed, e.g. record keeping
③ Where do you insert the blockchain?
④ Difference between blockchain and cryptographic ledgers
⑤ Risk is centralization

15. 15© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
3 Pillars of Decentralization
TRUST
INFORMATIONWEALTH

16. 16© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
Decentralization – What does it look like?
① Speed in settlements
② No intermediary delays
③ Upfront identification and reputation
④ Flat structure with no overhead
⑤ Permission-less user access
⑥ Trust built inside the network
⑦ Resiliency against attacks
⑧ No censorship
⑨ No central point of failure
⑩ Governance decisions by consensus
⑪ Peer-to-peer communications
Source: The Business Blockchain (Wiley, 2016) © William Mougayar

17. NEW
COMPANIES
AND
BEHAVIORS
INSIDE
EXISTING
COMPANIES
THREATENED
OR
TRANSFORMED
JUST
TECHNOLOGY
How New Technology Permeates

18. 18© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
13 Generic Ideas for Implementing Blockchains
1. Rethinking intermediary functions
2. Bundling / Unbundling
3. New flows of value
4. Decentralized governance
5. New legal frameworks
6. Creating/Issuing digital assets
7. Embedding trust rules inside transactions
8. Implementing digital signatures & what they enable
9. Proofs of records / transactions / process / storage etc.
10. Verifying authenticities
11. Embedding digital identities
12. Escrow / custodial services
13. Enabling smart things to transact autonomously

19. 19© William Mougayar, Virtual Capital Ventures.vcapv.com © William Mougayar, Virtual Capital Ventures
Some Leading Examples
• eTRS (ConsenSys, Microsoft, IPFS)
• Clearmatics, DCN for OTC derivatives
• Cambridge Blockchain catastrophe bond
counterparty validation

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Going Forward Choices
Improve the current systems
OR
Innovate from scratch

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William Mougayar
Investor . Entrepreneur
Blogger . Board Member
General Partner
Virtual Capital Ventures
william@vcapv.com
1-416-648-7010
http://startupmanagement.org/blog
http://vcapv.com
@wmougayar
thank you