4. In just a few years in Sweden alone…
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies
6. If the rate of change on the
outside (of an organization)
exceeds the rate of change on
the inside, the end is near....
-Jack Welch
7. We are “stuck” in our old mindset …
Money=Fiat Currency
Fiat Currency
Derives value from
government
Fiat money as
country’s main
currency
8. A vocabulary list of currencies
Fiat currency
− National currency
Alternative/complementary currency
− Bonus points/vouchers, e.g., frequent flyer miles
− Digital currency
In-game currencies, e.g., Stardollars, Farmville cash
Virtual world currencies, e.g., Linden dollars, PEDs
Mobile currency, e.g., M-pesa
Cryptocurrency, e.g., Bitcoin
9. Real cash economy in Entropia Universe
http://blogs.forbes.com/oliverchiang/2010/11/13/meet-the-man-who-
just-made-a-cool-half-million-from-the-sale-of-virtual-property/
•GDP >USD 440 mln
•PEDs <--> USD, Euro
•Record virtual good:
USD 625,000
10. Today > 6000 complementary currencies
Many community-based
currencies
In cooperation with national
currencies
Benefits
− Counterbalance banks
− Create means of exchange
− Promote resilience of local
community
http://www.lietaer.com/writings/books/rethinking-money-by-bernard-lietaer-and-jacqui-dunne/
12. Within 6 years:
Challenging the
fiat money
system?
Bitcoin – An emergent phenomenon
• Open source project on SourceForge in Jan 2009
• Original source code by “Satoshi Nakamoto” – pseudonym?
• Developed by self-organizing community of thousands of
strangers across globe
• Approx USD 3.6 bln in circulation (Feb 2015) and 80,000
daily transactions
• SEK 30 bln of Bitcoin vs Swedish Crown: 91 bln SEK
Teigland, Yetis, Larsson 2013 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707
16. What is a cryptocurrency?
Digital
Decentralized, peer-to-peer (P2P), i.e., no central,
third party
Uses cryptography to validate transactions
Also uses cryptography to generate currency itself
Non-technical explanation of Bitcoin
− https://www.youtube.com/watch?v=t5JGQXCTe3c
17. How does Bitcoin work?
Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor”
Block chain
• Shared public ledger
• All transactions ever
made included
• Chronology and
integrity enforced by
cryptography
18. Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor”
Transactions between Bitcoin wallets secured
through digital signatures
19. Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor”
Verifying a transaction
20. “Mining” confirms waiting transactions through
distributed consensus system
Generates new
Bitcoins
(at decreasing rate)
Does coding and
de-coding that
verifies and stores
transactions
(increasingly complex)
21. Screenclips from: How Bitcoin Works under the hood, by “Curious Inventor”
Preventing double spending fraud
23. Will there be a tipping point?
http://coinmap.org/
Depends on….
- Switching costs
- Network effects
Bitcoin accepted here
http://mercatus.org/site
s/default/files/Luther_Cr
yptocurrenciesNetworkE
ffects_v1.pdf
25. More than USD 475m has been invested in the Bitcoin Ecosystem
Selection of companies getting funding in 2014
Blockstream:
14M USD
Spondoolies:
6M USD
Bitnet:
14.5M USD
Blockchain:
30M USD
KnCM:
30M USD
Chain:
9.5M USD
Bitfury:
20M USD
Bitpay:
30M USD
Vaurum:
4M USD
Circle:
26M USD
Kraken:
5M USD
Coinbase:
100M USD
BTC China:
5M USD
Ripple:
3.5M USD
Ethereum:
6M USD
OKcoin:
10M USD
Xapo:
20M (60m) USD
Blockstream
21M USD
Source: KnC Miner, Jan 2015
26. Issuing equity in cryptocurrency
http://techcrunch.com/2014/09/30/reddit-scoops-up-50m-series-b-from-sam-altman-a16z-sequoia-
at-500m-valuation
27.
28. Benefits and drawbacks of Bitcoin
Benefits
− Improved transaction security
− Trust in cryptography rather than institution(s)
− Transparency
− Lower transaction costs
− Cross-border, faster transactions
− No outside intervention
− No inflation (although market volatility)
Drawbacks
− Tax concerns
− Only as safe as wallet holding coins or exchange’s servers
− Consumer uncertainty
− Market volatility (commodity or currency?)
− Potential for illicit use
− High electricity consumption to “mine”
29. What is Bitcoin?
Is it ….
A currency?
An investment?
But it is definitely ….
A ledger
A transaction network
30. Bitcoin – so much more than a “coin”
From dumb to smart money
Underlying blockchain technology holds
real transformative power
Transfer property rights (e.g., shares,
certificates, digital money) fast,
transparent and very securely.
http://thenextweb.com/insider/2014/02/15/bitcoin-platform-currency/
31.
32.
33. People
• “Net generation”
• 24x7 “mobile” workforce
• Knowledge via MOOCs
• Sharing not consuming
• Sustainability
Technology
• Broadband access
• The Cloud
• Mobile phones
• Internet of Things
• Big Data
• 3D printing
• Robotics/AI
• VR/AR
Open Source
• Software
• Hardware
• Physibles
Convergence of…..
Finance
• Microlending/microfinance
• Crowdfunding/equity/P2P
• Non-fiat cryptocurrencies
• Mobile money/payments
34. What’s around the corner?
24x7 Global Internet Collaboration + Open Source + 3D Printing
http://mashable.com/2013/02/13/robohand/
$60,000
$150
Available for free
download on
Where is
the firm?
35. Want to learn more?
Join our funnovation workshops
funnovation.se (site launched April 1, 2015)