EVERYONE CAN EARN
DEPOSITS

“The world needs banking but it does not need banks”

- Bill Gates

BLOCKCHAIN-Deposit. How the new technology is changing money and business.

The technology likely to have the greatest impact on the next few decades has arrived. And it's not social media. It's not big data. It's not robotics. It's not even AI.

You'll be surprised to learn that it's the underlying technology of digital currencies like Bitcoin. It's called the Blockchain.

This technology is now the next generation of the internet, and that it holds vast promise for every business, every society and for all of you, individually.




This technology is now the next generation of the internet, and that it holds vast promise for every business, every society and for all of you, individually.

But when it comes to assets - things like money, financial assets like stocks and bonds, loyalty points and other assets - sending you a copy is a really bad idea. If you send 100 dollars, it's really important that you don't still have the money and that I can't send it to you.
This has been called the "double-spend" problem by cryptographers for a long time.

So today, we rely entirely on big intermediaries middlemen like banks, government, big social media companies, credit card companies and so on to establish trust in our economy. And these intermediaries perform all the business and transaction logic of every kind of commerce, from authentication, identification of people, through to clearing, settling and record keeping.

And overall, they do a pretty good job. But there are growing problems. To begin, they're centralized. That means they can be hacked, and increasingly are JP Morgan the US Federal Government, LinkedIn, Home Depot and others found that out the hard way. They exclude billions of people from the global economy, for example, people who don't have enough money to have a bank account. They slow things down. It can take a second for an email to go around the world, but it can take days or weeks for money to move through the banking system across a city. And they take a big piece of the action 10 to 20 percent just to send money to another country. And the biggest problem is that overall, they've appropriated the largesse of the digital age asymmetrically: we have wealth creation, but we have growing social inequality.

So what if there were not only an internet of information, what if there were an internet of value - some kind of vast, global, distributed ledger running on millions of computers and available to everybody. And where every kind of asset, from money to music, could be stored, moved, transacted, exchanged and managed, all without powerful intermediaries? What if there were a native medium for value?

Well, in 2008, the financial industry crashed and, perhaps propitiously, an anonymous person or persons named Satoshi Nakamoto created a paper where he developed a protocol for a digital cash that used an underlying cryptocurrency called Bitcoin. And this cryptocurrency enabled people to establish trust and do transactions without a third party.

And this seemingly simple act set off a spark that ignited the world, that has everyone excited or terrified or otherwise interested in many places. Now, don't be confused about Bitcoin - Bitcoin is an asset; it goes up and down, and that should be of interest to you if you're a speculator. More broadly, it's a cryptocurrency. It's not a fiat currency controlled by a nation-state. And that's of greater interest.

But the main advantage in this underline technology. It is called a Blockchain.

So for the first time now in human history, people everywhere can trust each other and transact peer to peer. And trust is established, not by some big institution, but by collaboration, by cryptography and by some clever code. And because trust is native to the technology, it's called "The Trust Protocol."

How does this thing work?

Assets - digital assets like money to music and everything in between are not stored in a central place, but they're distributed across a global ledger, using the highest level of cryptography. And when a transaction is conducted, it's posted globally, across millions and millions of computers. And out there, around the world, is a group of people called "miners." These are not young people, they're Bitcoin miners. They have massive computing power at their fingertips - 10 to 100 times bigger than all of Google worldwide.
These miners do a lot of work. And every 10 minutes, kind of like the heartbeat of a network, a block gets created that has all the transactions from the previous 10 minutes. Then the miners get to work, trying to solve some tough problems. And they compete: the first miner to find out the truth and to validate the block, is rewarded in digital currency, in the case of the Bitcoin blockchain, with Bitcoin. And then this is the key part that block is linked to the previous block and the previous block to create a chain of blocks. And every one is time-stamped, kind of like with a digital waxed seal.

So if somebody wanted to go and hack a block and, say, pay you and you with the same money, He'd had to hack that block, plus all the preceding blocks, the entire history of commerce on that blockchain, not just on one computer but across millions of computers, simultaneously, all using the highest levels of encryption, in the light of the most powerful computing resource in the world that's watching me. Tough to do. This is infinitely more secure than the computer systems that we have today.

Blockchain. That's how it works.

So the Bitcoin blockchain is just one. There are many.

The Ethereum blockchain was developed by a Canadian named Vitalik Buterin. He's 22 years old, and this blockchain has some extraordinary capabilities. One of them is that you can build smart contracts. It's kind of what it sounds like. It's a contract that self-executes, and the contract handles the enforcement, the management, performance and payment -- the contract kind of has a bank account, too, in a sense of agreements between people.

And today, on the Ethereum blockchain, there are projects underway to do everything from create a new replacement for the stock market to create a new model of democracy, where politicians are accountable to citizens. So to understand what a radical change this is going to bring, let's look at one industry, financial services.

This is Rube Goldberg machine It's a ridiculously complicated machine that does something really simple, like crack an egg or shut a door. Well, it kind of reminds me of the financial services industry, honestly. It means, you tap your card in the corner store, and a bitstream goes through a dozen companies, each with their own computer system, some of them being 1970s mainframes older than many of the people on this website, and three days later, a settlement occurs. Well, with a blockchain financial industry, there would be no settlement, because the payment and the settlement is the same activity, it's just a change in the ledger. So Wall Street and all around the world, the financial industry is in a big upheaval about this, wondering, can we be replaced, or how do we embrace this technology for success?

Now, why should you care? Well, let’s describe some applications.

Prosperity. The first era of the internet, the internet of information, brought us wealth but not shared prosperity, because social inequality is growing. So could we develop some new approaches to this problem of inequality?

Because the only approach today is to redistribute wealth, tax people and spread it around more.

Could we pre-distribute wealth? Could we change the way that wealth gets created in the first place by democratizing wealth creation, engaging more people in the economy, and then ensuring that they got fair compensation?

A lot of writers talk about Uber, Airbnb, TaskPabbit, Lyft and so on as part of the sharing economy. This is a very powerful idea, that peers can come together and create and share wealth. Another important thing: "sharing" creates a sense of community, involvement, trust and goodwill towards each other.

But… these companies are not really sharing. In fact, they're successful precisely because they don't share. They aggregate services together, and they sell them. What if, rather than Airbnb being a $25 billion corporation, there was a distributed application on a blockchain, we'll call it B-Airbnb, and it was essentially owned by all of the people who have a room to rent. And when someone wants to rent a room, they go onto the blockchain database and all the criteria, they sift through, it helps them find the right room, and then the blockchain helps with the contracting, it identifies the party, it handles the payments just through digital payments -- they're built into the system. And it even handles reputation, because if she rates a room as a five-star room, that room is there, and it's rated, and it's immutable.

The same example, only with the bank: instead of the rental company, we have a distributed block-application DAO JP Morgan Chase (JP Morgan Chase - the largest bank in the world), owned by all people who hold deposits. When you need to invest money in a deposit and get an acceptable interest on your terms without a bank intermediary paying for its expensive offices and personnel (all included in a low interest rate), people turn to the deposit database of the blockchange themselves, enter the necessary parameters such as interest, terms, currency, etc., find groups of the same depositors with similar indicators, join the smart contract of the blockchange, which is further involved in accepting payments and payments in the system in the interests of all participants. While the money of some depositors is not claimed by them and are in common use together, others use them within the limits of a smart contract and vice versa.

So, the big sharing-economy disruptors in Silicon Valley and Financial tycoon from Wall Street could be disrupted, and this would be good for prosperity.

Another example:

The biggest flow of funds from the developed world to the developing world is not corporate investment, and it's not even foreign aid. It's remittances. This is the global diaspora; people have left their ancestral lands, and they're sending money back to their families at home. This is 600 billion dollars a year, and it's growing, and these people are getting ripped off. Analie Domingo is a housekeeper. She lives in Toronto, and every month she goes to the Western Union office with some cash to send her remittances to her mom in Manila. It costs her around 10 percent; the money takes four to seven days to get there; her mom never knows when it's going to arrive. It takes five hours out of her week to do this.

Six months ago, Analie Domingo used a blockchain application called Abra. And from her mobile device, she sent 300 bucks. It went directly to her mom's mobile device without going through an intermediary. And then her mom looked at her mobile device - it's kind of like an Uber interface, there's Abra "tellers" moving around. She clicks on a teller that's a five-star teller, who's seven minutes away. The guy shows up at the door, gives her Filipino pesos, she puts them in her wallet. The whole thing took minutes, and it cost her two percent. This is a big opportunity for prosperity.

There are all kinds of people who don't get fair compensation, and with blockchains, they're going to be able to make it rain on the blockchain. And that's a wonderful thing.

So, these are five opportunities out of a dozen to solve one problem, prosperity, which is one of countless problems that blockchains are applicable to. Now, technology doesn't create prosperity, of course - people do. But the technology genie has escaped from the bottle and it's giving us another kick at the can, another opportunity to rewrite the economic power grid and the old order of things, and solve some of the world's most difficult problems, if we will it.

Thank you.