© 2014 IBM Corporation VIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM Richard G Brown 22 May 2014 Executive Architect, Banking and Financial Markets Payments Council Bitcoin: Beyond the Hype
Payments Innovation Conference - Richard G. Brown, Executive Architect, Banking and Financial Markets, IBM - Bitcoin: Beyond the Hype
Aug 20, 2015
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© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM
Richard G Brown 22 May 2014
Executive Architect, Banking and Financial Markets Payments Council
Bitcoin: Beyond the Hype
© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM2
© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM3
© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM4
© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM5
What about the bad press? Is it even legal? What about regulation?
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© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM6
Bitcoin helps clarify our thinking about today’s problemsExample: Retail payments
A B
Examples:• m-Pesa, PayPal• PingIt, Droplet• Zapp, paym, …
A B
Examples:• Cash• Bitcoin
A B
Examples:• Visa• MasterCard
PCI-DSS, Secure Element, HCE, NFC, EMV, … !!!!!Push versus Instruct versus Pull
Push
Instruct
1) Authorise
2) Pull
© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM
Remember the world before the web? CompuServe, BBSs, Prestel, Janet…
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© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM
Remember the world before the web? CompuServe, BBSs, Prestel, Janet…
World-Wide Web: An Internet-scale open platform for information exchange
http://www.flickr.com/photos/59355637@N00/4323742328/in/photolist-7A5iXw-2unAK7-7nRYvs https://creativecommons.org/licenses/by-sa/2.0/
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© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM
Remember the world before the web? CompuServe, BBSs, Prestel, Janet…
World-Wide Web: An Internet-scale open platform for information exchange
Bitcoin: An Internet-scale open platform for value exchange
http://www.flickr.com/photos/59355637@N00/4323742328/in/photolist-7A5iXw-2unAK7-7nRYvs https://creativecommons.org/licenses/by-sa/2.0/
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© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM
This is about more than currency and traditional payments…
Asset Transfer with Finality
Advanced Transaction Scripting
(Ethereum)
“Digital Scarcity”
Near-Instant, Near Free International
Value Transfer
Public Visibility of Transactions
Transaction Scripting
Open Access through API or Protocol
“Push Payment” by Design
The First Killer-App?
A new Custody Model?
Smart Property Revolution in Retail
“Programmable Money”
“Economy of Things”
A new model for AML
Smart Contracts
The Core Bitcoin Innovation
© 2014 IBM CorporationVIEWS OF THE AUTHOR – NOT NECESSARILY THOSE OF IBM
Scenario Description Probability
Opportunity/ Implication for technology firms
Opportunity/ Implication for finance firms
“It’s dot.bomb all over again”
Flash in a pan; geeks get excited; the world goes on
Low? Short term revenue opportunity only?
Fleeting aura of cool
“Banks are doomed. Sell everything!”
Fiat currencies collapse; 1BTC is worth $1bn; A new world order where geeks rule the roost?
Very Low?
Wholesale reconfiguration of the banking industry
Adapt…. quickly!
“Coexistence; the world changes slowly”
Cryptocurrencies slowly gain adoption; today = Web in 1995; fast followers probably win; “Programmable money” is the spur to innovation
Likely? Adaptation of banking industry, “do a Linux”, sell to the new players
Embrace, with care, as “new platform for value transfer”
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