These slides are from Digital Currency Group's Fourth Semi-Annual Digital Currency Infrastructure Workshop, hosted on Oct 25, 2017 in San Francisco.

1. OCT 25 2017
Welcome to DCG’s fourth
Infrastructure Workshop

2. 2
AGENDA
Details Time
Introductions 10:00 - 10:15 am
Infrastructure Stack and Key Issues 10:15 - 11:00 am
Discussion Group 1: Key Management and Custody 11:00 - 12:15 pm
Discussion Group 2: Payments Solutions & Identity
(KYC / AML)
11:00 - 12:15 pm
Discussion Group 3: Liquidity, Market Making, and
Order Book Pricing
11:00 - 12:15 pm
Discussion Group 4: Crypto to Wall Street 11:00 - 12:15 pm
Sharing and Next Steps 12:15 - 12:30 pm

3. 3
WHO WE ARE
SUBSIDIARIES INVESTMENT PORTFOLIO DIGITAL CURRENCIES
At DCG, we build, buy, and support bitcoin and blockchain technology companies
leveraging our insights, network, and access to capital
Digital asset broker dealer
Asset management business
Media, events, and research platform 97 companies across 26 countries Invest directly in established and
emerging digital currencies

4. 4
CORE INFRASTRUCTURE
ENTERPRISE BLOCKCHAIN
PAYMENTS 2.0TRADING & TOOLS
BLOCKCHAIN REGISTRYIDENTITY & COMPLIANCE
OUR PORTFOLIO BY THEME
YOURS

5. 5
BUILDING AN EXCHANGE ECOSYSTEM
Build a robust, integrated exchange ecosystem to create a frictionless,
highly efficient open financial network using digital currencies
8

6. 6
DIGITAL CURRENCIES AS AN EMERGING
ASSET CLASS
0
25
50
75 Over 1,100 digital currencies
Total market cap of ~ $150B USD
Top 15 represent 90% of the market cap

7. 7
BITCOIN GROWTH

8. 8
ETHER GROWTH

9. 9
WHAT IT FEELS LIKE

10. 10
USING DIGITAL CURRENCIES IS NOT EASY
Question: How do you buy a million dollars worth of bitcoin?
• What counterparty would you use?
• How would you send USD?
• Where would you store it?
• How would you manage reporting and taxes?
• How would you track asset performance?

11. 11
DIGITAL CURRENCY INFRASTRUCTURE

12. 12
TRADING VOLUME IS GROWING
Daily exchange traded volume from $3 - $6 billion
• 50% BTC, 10% ETH, remainder is fragmented
• Some exchanges offer fiat to digital currency, but many are digital currency to
digital currency
Daily OTC volume estimated at $50 – 100 million
• Primarily driven by BTC and ETH
• Few large OTC desks have sufficient liquidity and infrastructure to facilitate
institutional buying activity

13. 13
BUT CHALLENGES REMAIN
• Evaluating counter party risk is still challenging – short operating history and little
transparency into company financials
• Capital efficiency and capital flows constrained – banks may block wires
• Security, custody, and key management solutions are still being developed
• Liquidity can be difficult to source – small volumes can move market prices in
adverse ways
• Regulation and rules are poorly defined, often inconsistent across jurisdictions
• Doing KYC and AML at scale is difficult
• Banking relationships are challenging to maintain, and there is constant education
and advocacy required to keep regulators at bay

14. 14
DISCUSSION GROUPS
1.
2.
3.
KEY MANAGEMENT & CUSTODY
LED BY BITGO, LEDGER
PAYMENTS SOLUTIONS & IDENTITY
LED BY NETKI
LIQUIDITY AND MARKET MAKING
LED BY GENESIS TRADING
4.
CRYPTO TO WALL ST
LED BY GRAYSCALE, SFOX, ZCASH

15. 15
KEY MANAGEMENT AND CUSTODY
Bitcoin and digital currencies are hard to store once traded. This discussion focuses
on answering key questions related to key management and custody:
• What products and services exist today? Who is providing software? Who is
providing hardware?
• Can institutions custody their own bitcoin? Their customer’s funds? What are the
limitations on what can be done?
• What are the challenges institutions are facing as they look at introducing digital
currencies to their business? The most common pain point we hear is around
security and custody, but what is the set of conditions they’re trying to satisfy?
• Is there theft or loss insurance that’s being provided today? What are the costs of
insurance for companies in the key management or custodial space? Does that
insurance cover the right types of theft?

16. 16
LIQUIDITY AND MARKET MAKING
When it comes to trading digital currencies, challenges include moving fiat quickly
from one exchange to another, as well as getting comfortable with the exchange
operators’ own solvency / liquidity, In a way, some of these issues might be solved if
people could “trust” exchanges more. But since they can’t, they don’t. This discussion
will focus on understanding the challenges related to liquidity and market making.
• How is liquidity managed today in the digital currency space? What are the key
constraints around liquidity in bitcoin? What about new, emerging asset classes
that are thinly traded?
• What if there was a more efficient way to manage float? What are the issues
around capital float with bitcoin today? How do you think about beginning to
resolve some of these issues?
• What data oracles are you using for market pricing?
• Are there consistent intervals for orderbook pricing? If so, how are these
denominated?
• Who are the market makers in today’s crypto landscape? How do you get in touch
with them, and what types of services do they provide?

17. 17
PAYMENTS AND IDENTITY
Many people don’t realize that digital currencies are actually being used to facilitate all
sorts of payments, including new payments business models like micropayments and
more. However, the challenges related to identity, KYC / AML, and digital currency
regulation constrain the growth of these new payments business models. In this session,
we’ll explore the challenges related to identity and payments.
• What are the most common open blockchain protocols being used for payments?
(bitcoin, stellar, etc).
• What are the set of services needed to enable safe, secure, and compliant payments
using bitcoin and other digital currencies? You need wallets, exchange capability,
account / identity management, KYC / AML software, regulatory reporting
competency, risk management and transaction monitoring tools - what else?
• From a compliance perspective, is there an opportunity to automate identity
management / KYC / KYCC at scale? How about across platforms?

18. 18
CRYPTO TO WALL ST
What excites Wall Street about bitcoin? Is it the price appreciation or technology? Cost
savings? Real-time settlement? Innovator's dilemma? Staying relevant? In this session,
we’ll talk about digital currencies moving to Wall St. and what this may mean for
businesses on both sides.
• What worries Wall Street about crypto currency? What are the concerns or
roadblocks for firms interacting with digital currencies? Is it infrastructure,
regulation, liquidity, security, or something else?
• Is Wall Street interested in trading Bitcoin, top 5 or everything else?
• Wall street has risk management / compliance / regulatory while crypto firms have
technology / new user base. How do we get companies to work together to leverage
their strengths while learning from one another?
• What are the technical requirements to connect with wall street trading platforms or
are they open adopting current infrastructures today?
• What big projects in the cryptocurrency space excite Wall street?
• What type of product is a bank interested in to trade cryptocurrency?

19. 19
NEXT STEPS
• Digital Currency Banking Alliance
• Continuing to expand Infrastructure Workshops to include new audiences, possibly
creating working groups for specific topics or areas of expertise
• Defining how DCG can be a partner to both digital currency companies and banks to
help aggregate and bring people together