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So much to talk about in the cryptocurrency space. Everyone seems to be aware that BTC prices have soared in recent months, but is this indicative of a maturing market or just hype? In today’s Asia Tech Podcast we look at what’s happening beyond the currency tokens, and how developers are building out the blockchain as well as using Initial Coin Offerings to fund new ventures.
Ethereum
http://www.coindesk.com/information/what-is-ethereum/
– Ethereum is a hybrid version of BTC (written by some russian guy)
– Ethereum is a cryptocurrency launched in 2015 and built from the ground up using its own blockchain technology
– “While bitcoin aims to disrupt PayPal and online banking, ethereum has the goal of using a blockchain to replace internet third parties — those that store data, transfer mortgages and keep track of complex financial instruments.”
– In short, ethereum wants to be a ‘World Computer’ that would decentralize – and some would argue, democratize – the existing client-server model.
– rapid growth in contracts with large IT companies
– anecdotally popular with Google/MS employees
BlockChain
– A blockchain is a distributed public database that keeps a permanent record of digital transactions.
– Another name for Blockchain is distributed ledger technology
– With a blockchain, many people can write entries into a record of information, and a community of users can control how the record of information is amended and updated. Likewise, Wikipedia entries are not the product of a single publisher. No one person controls the information.
Harvard Business Review – https://hbr.org/2017/01/the-truth-about-blockchain
Novelty – How new is any particular application of this technology? The newer or less familiar it is, the harder the adoption is.
Complexity – How coordinated does any particular ecosystem need to be to use this application (Credit cards? / Social networking / Stock Trading)
Just like TCP/IP
Single Use – Bitcoin for blockchain and email for tcp/ip Localization – Builds on Single Use application, Financial firms getting together to create utility is a good example of this Substitution – Again, builds on Single Use and Localization and now tries to supplant existing processes with new ones. Requires much deeper coordination with the overall cryptocurrency movement a good example. Everybody has to use it, believe it, support it for it to be widely accepted and widely used. Transformation – Completely new applications that change social, economic and political systems. These are the most interesting, most disruptive and potentially most fearsome if not implemented benignly. https://chain.com
– IBM? https://seekingalpha.com/article/4086778-ibm-future-blockchain-leader
– https://danielmiessler.com/study/blockchain/#gs.ezfpifs
– https://www.researchgate.net/publication/312428172_Blockchain_A_Primer
– https://blockchaincapital.tokenhub.com
– https://www.technologyreview.com/collection/blockchain-primer/
Stock Trades as an Example
When Morgan Stanley trades a stock or a list of stocks with a client and Goldman Sachs does the equal and offsetting set of trades (and I am simplifying this), there is an exchange sitting in the middle of the trade in most cases.
Morgan Stanley has a back and middle office that keeps track (firm’s books and records) of its trades and Goldman Sachs does the same thing.
There are now two levels of abstraction…actually three, because each trading entity (client also has its own books and records).
Think about this: Client A has to confirm and reconcile all stock trades with its counterpart, which in this case is GS. GS has to do the same with the exchange and all of that needs to be confirmed and reconciled with an agent back or custodian bank. (A bit of inside baseball, but illustrative nonetheless) Morgan Stanley is doing the same thing on the other side. Ins Ome cases this takes days to do. Enter the block chain…
Largest custodian Banks
http://www.nasdaq.com/article/what-is-the-market-share-of-the-5-largest-custody-banks-in-the-global-custody-banking-industry-cm635397
BONY Mellon –
SSGA
JPMorgan
Citigroup
BNP Paribas
Why ICOs are a “ thing ”
– Check out this rather interesting graph re funding sources for Crypto https://twitter.com/CBinsights/status/865977173714325504/photo/1
– a lot of BTC owners are reinvesting their gains into ICOs
– unregulated capital market
Asia Tech Podcast is the Voice of the Asian tech ecosystem. Every week Graham Brown and Michael I. Waitze publish a roundup of the key tech trends in Asia. Get all the updates by subscribing on iTunes.
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