Our blockchain experience applied to mobile payments app

1. November 2016.
Blockchain startup experience
enabling the sharing economy
Applied to mobile payments

2. What can blockchain do for us?
Is it better than a cloud solution?
Is it easy to use and deploy?
How much does it cost?
Being early adopters is risky business?
Which blockchain do I need?
Blockchain real life use cases
Pros and Cons
2

3. Marketpay team
3
ricard
forn
alejandro
cabanillas
francisco
aréchaga
beatriz
amilibia
ferran
figueredo
juan
perez

4. • Users meet at the marketplace
• Buyer or seller can start the transaction,
introducing amount and address for
shipping.
• The counterpart is notified on his/her
mobile phone and accepts the escrow
transaction.
• Buyer can ask for instant credit.
• Seller pays the PSP fee.
• The escrow payment is released
automatically 24h after successful delivery.
• Pay-out to the seller’s account is executed
right away.
LemonPay. Designed to
facilitate the economic
transaction between
peers
4

5. 5
the escrow payment provider that enables
marketplace revenue models

6. Secure escrow based transactions are core to the
sharing economy: anonymity, compliance and
agile business rules for marketplaces
6
Marketplaces, e-commerce websites and mobile apps
must guarantee secure transactions between buyers and
sellers.
Marketpay covers all your operational cycle which
includes:
o Pay-in and pay-out transactions and wallet
statements.
o Agile escrow rules and payments upon delivery.
Most countries require a banking license to handle money
on behalf of third parties. Marketplaces cannot afford to
break legal and regulatory requirements and Marketpay is
the perfect partner that allows you to concentrate on your
core business.

7. Marketpay value proposition
7
Good or service is
offered on marketplace
Search is made on
listing app or
website
Deal is closed and escrow
is placed through
Marketpay
Pay-out is executed
to sellers bank
account
Delivery is confirmed
and payment is
released

8. Marketpay architecture
LemonP
ay
Mobile
payments
nubelo
Freelance
Marketplace
Gasport
Petrol
Payments
YoVoy
Events
Organization
…
AuditLog
gEth Node
PayIn
Sabadell TPV
PayOut
OpenAPI
SQL
Blockchain
Ethereum
Marketpay
8

9. Blockchains allows an application developer to
create a distributed database that can be read by
anyone, but can only be written to by consensus.
A blockchain is a ledger of records arranged in data batches called blocks that use
cryptographic validation to link themselves together. Put simply, each block references
and identifies the previous block by a hashing function, forming an unbroken chain,
hence the name. 9

10. The blockchain is the flying car of finance and it
has finally arrived
10
Many established
enterprises are still
waiting for the
perfect business
justification for
investigating
blockchain…
However, by doing
that, they run the
risk of missing
opportunities and
failing to identify
the business risk of
being slow to
adopt a disruptive
technology.

11. Trends & The next big thing
11

12. For a technology that’s still in its comparative
youth, blockchain has become incredibly
influential, incredibly quickly.
12
World Economic Forum released a report calling blockchain
technology a “mega-trend” that will shape society in the
next decade.
The WEF predicts that blockchains could store as much as
10 percent of global GDP by 2027.

13. Blockchain technology, though still in emerging
stages, is being considered as biggest disruptive
technology in the modern technology ecosystem
13
Technology
trigger
Peak of
inflated expectations
Trough of
disillusionment
Slope of
enlightment
Plateau of
productivity
EXPECTATIONS
TIME
Internet of things
Crypto currencies
Augmented reality
3D Printing
Predictive
Analytics
Smart robots
Quantum
computing
Autonomous
vehicles
BLOC
KCHA
IN
Gartner, 2015. Hype Cycle for Emerging Technologies

14. Blockchain is not going to emerge in industry as a
single platform, as was once imagined, but as a
series of different blockchain platforms designed for
different purposes.
14
https://goo.gl/5133lG Map of
decentralized transaction ledgers
BTC/XB
T
ETH XRP Hyperledger
# of nodes 6,000 7,000 200 200
access Open Open Permission
ed
Permissioned
blockTime 10m 14s 4s ~1ms
smartContracts Script Solidity Codius Go

15. Marketpay auditLog
Given blockchain’s unique ability to audit transmissions
and movements through log data, Marketpay reflects
every transaction on the decentralized ledger, as a
backup and anti-tampering measure.
15

16. Marketpay auditLog
Blockchain will make all kinds of transactions
transparent, more reliable, and easier to audit without
centralized processing.
16

17. LemonPay: escrows, while they can be conducted
through a central agent, are increasingly being
conducted through a smart contract on the
Ethereum blockchain controlled by several
independent agents.
17
BuyerSeller
3rd party
logistics
Smart Contract
is just a phrase
used to describe
computer code that
can facilitate the
exchange of
money, content,
property, shares,
or anything of
value.

18. MarketPay tokens implement basic features in a
standard way, so they are instantly compatible with
the Ethereum wallet and most of smart contracts.
18
Tokens in
Blockchain can
represent any
fungible tradable
good: coins, loyalty
points, gold
certificates, IOUs,
in game items, etc.

19. Blockchain pros
Internet of Value (IoV, Web 4.0), earlier adopters
o Past: Web 1.0 (a one-way content distribution net) to Web 2.0 (an interactive
social net) and Web 3.0 (where smart applications monitor data and make
decisions: Big Data, Data Science, NLProc and IoT).
o Future: Web 4.0, IoV:
• Blockchain 1.0: a distributed ledger technology enabling the P2P
exchange of digital value.
• Blockchain 2.0: smart contracts & DApps where the exchange of value of
payment is conditional upon a "cryptographic proof" based on the
occurrence of an event.
Security: backup, immutability.
Cost-effective: payin, payout.
Openness/Transparency: auditLog & escrow Smart Contract.
19

20. Blockchain cons
Why use a database that takes over 10 minutes to commit a transaction and can
store only 80 bytes natively?
All market participants, regulators and other stakeholders must all be onboard and
involved in order to ensure that the blockchain can make a smooth landing.
Blockchain's potential is endless, but the tech isn't mature. It comes with the
territory when being earlier adopters:
o Yet to come sharding features.
o PoW is effective but absurd. => PoS, much better!
o Cheap $1M/day on the electric bill to get a txRate of 0.5 tx/s => 25 US$/tx ?
o Ethereum Smart Contract bugs > 100 per 1000 lines of code.
• industry average bugs is 15-50
• Microsoft released code at 0.5
• 0 defects in 500,000 lines of code for NASA.
Cryptocurrency high volatility.
Income vs Expenses Analysis: https://goo.gl/rHo7fs
20

21. Blockchain cons
Current Eth SC txFee: 0.0036216 Ether ($0.04) => 6
escrows, 1 US$.
Decentralization, no such a dream:
o Hard forks imply Blockchain decentralization is not to take very seriously.
o Just a bunch of developers are in control of Blockchain behaviour.
o The bootstrap nodes are hard-coded.
o Oracles in Ethereum are trusted parties embedding data into Blockchain.
Complex: development, deployment, and running. Example:
o startEscrow(alice, bob, 100)
o eth_call([{"from": "0xf28dafbfeb41bf32869c9d498da0d651d0206ed4", "to":
"0x27c042342c9ba937214117e11a4970a6145034cb", "value":
"100000000000000000000", "gas": "22282", "gasPrice": "20000000000", "nonce":
"0x100035", "data": "
0x3ccfe887000000000000000000000000a7e3c7c227c72a60e5a2f9912448fb1c2107
8769000000000000000000000000f28dafbfeb41bf32869c9d498da0d651d0206ed4
"}])
21

22. Blockchain cons
Forks & upgrades => node outages for 24h or even
48h.
Internal SC transactions hard to track.
Security:
o Private key lost or stolen, worst nightmare.
o Cryptography resilience:
• Quantum pre-image attacks on SHA-3, https://arxiv.org/abs/1603.09383
o The DAO attack: SC vulnerabilities.
o DDOS attack => EIP150 Hardfork.
22

23. Conclusions
So far marketpay.io has developed two Smart Contracts to serve
marketplaces pulling our API. One writes the audit log for each
wallet change, the other codes a real escrow transaction.
Nevertheless, both smart contracts are waiting for incumbent
players to innovate: Banking partners to provide at least digital
EUR and Service Providers (i.e. shipping) to sign directly as oracles.
Experts at a recent technology conference agreed that Blockchain
has a bright future, but warned it may be a rocky ride until that
future arrives.
It's far too early to proclaim any sort of winner in the development of
a Blockchain stack. But Ethereum and Hyperledger are defining
the right kinds of structure for the Blockchain industry to avoid the
pitfalls that might limit its potential.
Startup lean projects allow the technology to be prototyped, piloted,
and put into production without market-wide consensus as a
prerequisite.
23

24. Interesting use cases (multi-peer)
Academic Publishing without Journals: A distributed publication platform build on Ethereum
and IPFS/Swarm could incentivize post-publication peer review.
Decentralized ISP: Every smartphone user has the possibility of creating a WiFi Hotspot
with their phone. Data consumption in exchange of automatic payments.
Journalism trust system: a global decentralized unstoppable news source with reputation
system for investigative journalist and payment directly to the reporter.
Provenance & supply chain: stakeholders query supply-chain records on the blockchain
and trace them from raw materials through to finished product.
Crowdfunding: raising funds using sales of blockchain based digital assets, that are
inherently smart contracts that have properties resembling stocks and bonds. Examples:
Augur (5M US$), The DAO, Golem (rent your unused CPU/GPU).
Democracy: storing votes forever, creating records that can never be tampered with,
elimination of multiple voting by individuals and personal convenience as intrinsic values
that can be achieved by employing the Blockchain in voting.
24

25. Less interesting, just one-peer
AuditLog: Use blockchain ledger as a backup or audit
system.
Database/NoSQL: A cloud computer where programs
have their own storage space that can't be modified by
anything other than the program itself.
Outsourcing of business logic: Expressing business logic
as smart contracts.
25
Why multi-peer?: Consider the process of buying a house, a complex
transaction involving banks, attorneys, title companies, insurers, regulators, tax
agencies and inspectors. They all maintain separate records, and it’s costly to
verify and record each step. That’s why the average closing takes roughly 50
days. Blockchain offers a solution: a trusted, immutable digital ledger, visible to
all participants, that shows every element of the transaction.

26. Blockchain as a Service (BaaS) provides a rapid, low-
cost, low-risk, and fast-deployment platform for
organizations to catch the wave of next decade
technology, Blockchain.
26
My marketplace to
become decentralized
Blockchain
enabling the sharing
economy
BaaS

27. Thanks!
Francisco Aréchaga
fran@marketpay.io
+34 630 95 94 85
Juan Ignacio Pérez
juan@marketpay.io
+34 634 14 65 08
Ricardo Forn Palacin
ricard@marketpay.io
+34 609 85 83 44