Future Commerce: Reinventing Markets with Blockchain, by David Shrier

1. Reinventing Markets with Blockchain
David L. Shrier, Managing Director, MIT Connection Science
21 December 2015
(c) Far Horizons Management
Future Commerce

2. Agenda
§ Introduction to Future Commerce
§ What is “the Blockchain”?
§ Applications
§ How is it changing money & payments?
§ How is it changing markets?
§ How could it change insurance?
§ What could happen to data and security/privacy? (MIT ENIGMA)
§ What are the opportunities?
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3. MIT Future Commerce Instructors
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ALEX "SANDY"
PENTLAND
MIT Professor; advises
U.N. SG, WEF, Google,
others on Data / Analytics
DAVID
SHRIER
Managing Director, MIT
Connection Science
BRIAN
FORDE
Director, MIT Digital
Currency Initiative
JOOST
BONSEN
MIT’s venture catalyst
3

4. Fintech is hot
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YTD Sep 2015
$12.4Bn*
Global FinTech VC Investments
*source: Finovate
4

5. Future Commerce Themes
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SECURITY &
PRIVACY
MARKETS
MONEY &
PAYMENTS
INFRASTRUCTURE
5

6. Let’s make the leap…
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7. WHAT IS “THE BLOCKCHAIN”?
BASICS
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8. Intro to Blockchain
§ There are many blockchains
§ It’s a form of “distributed ledger”
§ Let’s dive in to a simplified “blockchain”
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GENESIS
BLOCK
BLOCK 1 BLOCK 2 . . . BLOCK N
8

9. Blockchain runs on distributed
network of servers
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10. Ledgers:
centralized vs. decentralized vs. distributed
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Source: World Economic Forum 2015
üFAST
üTRANSPARENT
üDIRECT
üLOWER COST
üMORE SECURE
üMORE CONVENIENT

11. WHAT CAN WE DO WITH THIS?
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12. Money / Payments
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“NEW”
“CONVENTIONAL”
$
12
€
In Africa,
10X to 100X
less expensive
BANK 1 CENTRAL
BANK
BANK 2
PROCESSING
NETWORK
PROCESSING
NETWORK
EXPENSIVE COMPLICATED TAKES 3 DAYS
$ €ALTCOIN
COMPANY
CHEAP FAST

13. FINANCIAL MARKETS
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“NEW”
“CONVENTIONAL”
€
13
AAPLBANK 1 DTCC
BROKER BROKER
EXPENSIVE COMPLICATED TAKES 90 DAYS
€ AAPLDIGITAL
XCHNG
CHEAP FAST
EXCHANGE

14. Insurance
December 2015 (c) Far Horizons Management
BROKER
BROKER
BROKER
INSURANCE
COMPANY
RISK
POOL
MGA
SELF
INSURED
FUTURE 1 FUTURE 2 FUTURE 3
?
TODAY
$
€
$
€
BUYERS
OF RISK
14
DIRECT

15. Data security
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DATA
trust.mit.edu
MAKE
THICKER
WALLS
TODAY
FUTURE

16. Commercial opportunities
§ Disaggregate the banks and insurance co’s
§ Eliminate friction (take out middle men)
§ Improve financial access
§ Democratic identity
§ Reduce fraud
§ Enhance analytics
§ Decrease time to market for food
§ Improve velocity of media (music, film…)
§ …possibilities are endless
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17. Future Commerce Online!
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http://mit.getsmarter.ac/future_commerce/
ü 8 week digital course
ü Expert perspectives
ü Personalized experience
ü Certificate from MIT
David L. Shrier
Managing Director, Connection Science
Massachusetts Institute of Technology
shrier@mit.edu/ @DavidShrier
connection.mit.edu
www.futureenterprise.eu