Sebastiano Scròfina, Dropis cofounder, talks at the University of Rome "Roma Tre", during Codemotion 2012

1. P2P currencies:
what’s next after Bitcoin?
Sebastiano Scrofina
sebastiano@dropis.com – Dropis

2. Introduction
• Who am I ?
• What is this talk about ?
Sebastiano Scrofina 2
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3. Money timeline
Gift and Money is Money is Money is Money is
barter barley gold, silver & a receipt a banknote
copper
Beginning of time 3000 BC 700 BC 1650 1694
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4. Money timeline
Money is Money is Money is Money is Money is
a banknote USD fiat bitcoin next currency
1694 1944 1971 2009 2020
Sebastiano Scrofina 4
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5. Features comparison
Gold Fiat Bitcoin
Intrinsic value ✔
Widely accepted ✔ ✔
Ease of use ✔ ✔
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6. Definitions
• Money naive, academic, specific
• Currency implementation of money
• Protocol rules to exchange information
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7. Open questions
• Is economics a natural science ?
• Who’s the expert ?
• Why a de facto monopoly ?
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8. What is Bitcoin ?
• Decentralized electronic cash system
• Open source client
• Born January 2009
• Developed by Satoshi Nakamoto
• Exchange rate with fiat
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9. What is Bitcoin ?
limited money supply
}
no middleman
cheap transactions
pseudonymous
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10. How does it work ?
block chain
mining
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11. More features
Gold Fiat Bitcoin
Limited supply ✔ ✔
Not issued upon debt ✔ ✔
Transparency ✔
Decentralization ✔ ?
Micro-transactions ✔
Sebastiano Scrofina 11
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12. N E X T
CURRENCY
OPPORTUNITY
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13. Internet disrupted advertisement
G O O G L E
ADVERTISING
$36bn REVENUES
7.7%
OF WORLD’S
Source: Wikipedia, “Google” and “advertisement”
$467bn
ADVERTISEMENT MARKET
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14. Internet disrupted communication
SKYPE ROUTES
54bn
minutes 13%
O F Y E A R LY
406bn
M I N U T E S
INTERNATIONAL CALLS
Source: TeleGeography 2009
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15. Has Internet disrupted money ?
$41M
BITCOIN
$9.8tn ACCOUNTS FOR
opportunity?
0.00004%
OF WORLD’S
$98tn
M3 MONEY MASS
Sources: Wikipedia, inverted pyramid of global liquidity | bitcoincharts.com
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16. How big is BIG?
200 times bigger.
WORLD M3
WORLD ADVERTISEMENT
MARKET
MARKET
Source: Wikipedia, “Google”, “advertisement” and “inverted pyramid of global liquidity”
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17. Why 0.00004% only ?
convenient ?
{
• to buy illegal goods
• for microtransactions
valuable ?
{
• no intrinsic value (e.g. gold)
• no backing authority (e.g. USD)
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18. What is Bitcoin then ?
• digital store of value
• volatility risk
• can act as a electronic cash-
like currency
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19. Is the next currency here ?
• Namecoin name/value datastore
• Solidcoin fairer and not scarce as Bitcoin
• Ixcoin shorter maturity period
• Litecoin faster blocks, 81M coins
• Devcoin developers over miners
• Freicoin Bitcoin with demurrage
• Mastercoin a new layer on top of Bitcoin
• Geistgeld and many more coming...
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20. N E X T
CURRENCY
F E AT U R E S
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21. If the block chain is like
SVN { • central authority
• single point of failure
(e.g. takeover, infiltration, etc)
{
• decentralized (not just distributed)
Next currency will be like • no central repository
Git • no central authority
• no single point of failure
Reference: Laurie, “Decentralized currencies are probably impossible”, 2011
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22. {
• self-referential
Access to • restricted, slow, inefficient
credit • days
• success rate ~10% [3]
information
Access to
{ • universal, fast, efficient
• seconds
• success rate ~70% [1,2,4]
[1] http://www.ibtimes.com/articles/61429/20100911/google-instant-redefines-search-but-is-world-ready-1.htm
[2] http://newyork.ibtimes.com/articles/197961/20110815/bing-yahoo-google-search-engine-effective-success-rate.htm
[3] http://en.wikipedia.org/wiki/Microfinance
[4] http://mrpogson.com/2011/06/28/99-9949-uptime-for-google-apps-in-2011/
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23. What if banks owned search ?
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24. Access to credit is broken
• Banks are risk adverse
• “Poor” people are trustworthy (Yunus, 2006)
• Healthy credit / wealth link (De Soto, 2000)
• Vicious circle, self-fulfilling prophecy
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25. Overproduction (?!)
Greece
2008-2011 { unemployment grew from 7.2% to 21%
but
skills and needs did not change dramatically
Food
2001 { 9M people died of starvation [1]
but
EU spent €150M to destroy 1M tons of edible food [2]
[2] Source: UK FPH, “A cap on health”, [1] FAO
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26. Internet drives abundance
• negligible marginal costs
• potential audience (look at p2p)
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27. If Bitcoin is like
gold {
• scarce
• limited
Next currency will be like
PageRank {
• always enough
• abundant
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28. Gold Fiat Bitcoin Next
Easy access to credit ✔
Abundance ✔
Crisis-proof ✔
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29. Go and hack the money
Money is
___________
2020
{•
•
•
•
money is information
currency is a protocol
the current protocol is broken
internet needs its own currency
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30. $5M
Satoshi Nakamoto’s worth in BTC
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31. Our contribution
Dropis
{ • we started up a company
• we’re developing a currency
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32. work@dropis.com
invest@dropis.com
@dropisapp
www.dropis.com
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