The Future of Fintech and Blockchain

The Future of Fintech and Blockchain
Speaker: Prof David Lee Kuo Chuen
© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

“Stone Age”
In 1946, the birth of
ENIAC ( the 1st generation
computer)
“Agriculture Age ”
In 1991, the birth of the
first web site (Internet).
“Industrial Age”
Cloud computing
framework taking over
of the client/server
framework.
“Bronze/Iron Age”
In 1977, the birth of Apple
II, and in 1981 the birth of
IBM (Intel 8088 )- PC
source：http://www.wtoutiao.com/p/156D8bB.html “云计算”已成「老炮儿」，将被“区块链”所革命！
Kuo Chuen

• Industrialisation – Manual labour replace by Machine production
• The development of the modern computers and internet is a proven fact.
• Centralization of authority – Key characteristic of feudalism
• The essence of cloud computing is to provide a single platform to consolidate the hardware,
and software resources administered by different groups in different regions.
Why cloud computing belongs to the Feudal Industrial Age
Although，cloud computing has brought down the
cost of operation efficiently。
but，“Centralisation "has its shortcomings too，
• Data security.
• Disconnection between cloud computing
and terminal server”.
• Challenges to data accountability & trust
mechanism.
Kuo Chuen

Is there a technology to overcome these
shortcomings ?
One of the answers is Blockchain
Kuo Chuen

In October 2015, the 1st Global Blockchain Summit
was held in Shanghai. Geeks, entrepreneurs, academic
experts, investors, corporate executives, and regulatory
policy makers gathered and discussed the business
applications and opportunities of blockchain
technology in industry, such as Payment, Internet of
Things, securities trading, digital assets management.
Over 200 guests from the financial industry, including
banking, payments, securities and commodities
attended the summit.
source：http://www.8btc.com/wanxiang-blockchain-labs-20151015
Kuo Chuen

In a 20th January release, The People’s
Bank of China (PBoC) said that it is
moving toward the launch of its own
cryptocurrency. The bank wants to use
its control over the currency to reduce
money laundering, tax evasion and other
criminal acts. Blockchain will form the
backbone of its cryptocurrency.
Kuo Chuen

A n I n t r o t o
B l o c k c h a i n
Kuo Chuen

Blockchain：Decentralised Database- First used in Bitcoin。
Encrypted
transaction
Step 1
Block
Every online transaction is
represented in a block
Step 2
Each block record, is distributed
to all the participants
Step 3
Participants validate
the block - transaction record
Step 4
Step 5
The block is added to
the block chain- the
transaction is recorded Step 6
Transaction completed
Encrypted
transaction
Kuo Chuen

Blockchain
Public chains Private chains
Consortium
Chains
Fully Private
Chains
E.g.：R3 CEV
E.g.：Bitcoin
Types of Blockchain Features of Blockchain
• Decentralised
• Data is replicated on all the nodes in a P2P network, and each
node’s copy of the data is identical to every other node’s copy
• Consensus mechanism
• All users in the network can come to collectively agree on the
validity of the data recorded
• Irreversibility and crypto security
• One would need to command at least 51% of the computing
power of all mining nodes to take control of the block chain -to
overturn the consensus blockchain.
• Openness
• Data is open to all on the P2P network
• Anonymity
• Individual parties are never identified. Instead, security keys
(public and private key pairs) are required to gain access to
transaction output.
• Multiplatform
• Every blockchain node has the same calculation and data
structure. Any platform will be able to compute the node.
source：http://www.8btc.com/what-is-blockchain; http:// community.qingcloud.com; https://blog.ethereum.org
Kuo Chuen

Telecommunications Voting Healthcare Nortarizastion Banking
Equity brokerage &
Exchanges
Insurance Web Domain
Internet of
Things
……
More
are
coming
Kuo Chuen

Stock/Securities Exchange
1 Bitshares system 2 Blockchain Equity Exchange System.
• Real-time exchange; total transparency
• All corporates can self issue their securities.
• Open source system，enable tens of thousand of
transactions per second.
• Use mainly for the transactions of Private
companies shares.
• Overstock and project Link by NASDAQ are
developing this system.© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

B a n k i n g
• E.g. Cash transfer
• Present：You＝>bank＝>friend
• Future：You＝>friend
• BIS research report：
The development of block chain technology will change how
central banks operate.
Benefits of block chain that banks can leverage on
• Security: irreversible, immutable, traceable
• Ease of governance : Utilises name base block chain, every node will be identified, e.g. alliances, issuers, general
users
• Low operating cost : Reduce the cost of transactions
• Shortened the settlement time of financial transactions: UBS white paper: business process time can be reduced
to 15 seconds.
• Santander bank: using blockchain technology will help the banking sector to reduce expenses by 20 million USD.
• Lower counter party risks
source：http://www.businessinsider.sg/11-banks-in-r3-consortium-use-blockchain-technology-to-trade-2016-1/?r=UK&IR=T
Kuo Chuen

Banking R3
Blockchain applications for banking：
From vision to realisation
•R3 (R3CEV LLC) leads a consortium of 42 financial companies in research and
development of blockchain usage in the financial system.
•11 banks conducted trials on transactions through distributed ledger using
Ethereum and Microsoft Azure.© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

I n s u r a n c e
Traditional
coverage system
Decentralised
coverage
system
• All data is recorded into the
blockchain.
• Any user can start and end their
insurance coverage at anytime.
• No need for insurance funding pool.
Mode of insurance coverage
• Irreversible, immutable and
impartial, ensure self authentication
and fairness.
• The decentralised system remove
the need for middleman, which
ensure high utilization of the fund.
Advantages
Kuo Chuen

P2P lending
MoneyCircles is a mobile-decentralised P2P Savings & Loans
marketplace built on private blockchain technology.
Through smart contract, MoneyCircles let people with a
common bond, save & borrow from each other -a kind of
credit union in the cloud, but without the usual costs and
restrictions. 。
• Core Advantage：
*No black box mechanism or money pool issues.
*Transaction flows are open and transparent.
*All users can monitor where the funds are transferred to and how the fund
will be used.
• Millions of savers have money trapped in low interest savings accounts with
institutions who want to lend, but may not be profitable for these institutions.
Savers desire better rates and want their money put to better use.
MoneyCircles.com aims to reconcile these two parts of the market, by making
saving and lending more socially based, to better deploy deposits which will
help significant parts of the society.
source：http://moneycircles.com/
Kuo Chuen

Communication
Design flow of traditional
communication devices：
All nodes will connect through the
shortest or the most efficient route.
Bitmessage as a central link for
message delivery ：
• Message is sent to users of the network,
and users can only access using their
private key.
• Avoid being track
• Ensure data security and data transfer
security
GetGems a decentralised hub：
• communication function is
similar to that of Bitmessage
• Equip with Bitwallet
• Transact and earn
cryptocurrency“gems”.
• Users can click on
advertisements for
monetary rewards.
Bitmessage
Kuo Chuen

V o t i n g
Old, requires
high
maintenance ,
inefficient, and
not fraud proof。
What does the blockchain means for voting?:
• Verifiable source code for voting machines
• Prevent voter fraud by eliminating the
possibility of more votes than registered
voters.
• Instant, transparent and incorruptible voting
data.
• Very low cost, easy to implement
Voting system that
utilised block chain：
• Complete voting
system
• Secure
• Innovative
Blockchain Apparatus Voting System:
• Complete voting system
• Focused on security: multiple audit trails,
including paper and the blockchain.
• Uses innovative techniques that are not
present in any other voting system
• Customizable ballots provide a familiar
interface for voters.
• Friendly admin interface.
source:http://blockchaintechcorp.com/blockchain-apparatus/blockchain-voting-machine
USA Current
Voting system
Kuo Chuen

V o t i n g
source： https://followmyvote.com/
Open source
ConvenientLow cost
Secure
Kuo Chuen

Internet of Things (IoT)
Today supply chain: buyers, sellers and
their banks are link with one another
Tomorrow’s supply chain: maintains the
same direct connections, plus complete
trustable visibility into the flow of goods and
the flow of transactions.
• IBM and Samsung Electronics jointly developed the Autonomous Decentralized
Peer-to-Peer Telemetry (ADEPT)
• ADEPT has several capabilities that are fundamental to building a decentralized
(Internet of Things) IoT
• ADEPT operates on three open source protocols: Telehash for messaging, BitTorrent
for file sharing and Ethereum, a blockchain protocol for autonomous device
coordination functions.
• Once a product is assembled, the manufacturer will register the product into the
production system blockchain. When a consumer purchases the product, he or she
can register the product into the manufacturer regional blockchain for
authentication purpose.
Kuo Chuen

Notarization
Blockai aims to develop
a new tool that enable
artist to prove and state
their copyright to their
artworks.
Uproov will explore
utilisting the blockchain
potential optimization of
time stamp ability.
Stampery wish to use
blockchain to replace
notarizers, and provide
authentication for
legality of sensitive
information.
Chronicled utilized
blockchain technology
to authenticate
collectibles sports shoes.
Irreversibility and incorruptibility allow Blockchain to be widely utilised for notarization purposes
source：http://www.8btc.com/blockchain-item?tagname=%E5%85%AC%E8%AF%81%E9%98%B2%E4%BC%AA
Kuo Chuen

Bitproof innovated a
blockchain solution to setup
a one stop service to notarise
Education certificates.
BitSE develop Vechain the
first blockchain-based anti-
counterfeiting technology.
Factom utilize blockchain to help
businesses and government to
simplify records management,
record business processes, and
address security and compliance
issues.
source：http://www.8btc.com/blockchain-item?tagname=%E5%85%AC%E8%AF%81%E9%98%B2%E4%BC%AA
Notarization
Irreversibility and incorruptibility allow Blockchain to be widely utilised for notarization purposes
Kuo Chuen

M e di c a l H e a l t h c a re
A collaboration between Estonia
government and guardtime
Healthbank：utilised blockchain
technology that enable patients to
management and share personal medical
data with clinicians and researchers.
Applications：
Population Health, medical records, patient data
Strengths：
• Increase the transparency of healthcare services
• Protect patient privacy (Insurance , credit providers, and patients can utilised
the blockchain solutions to manage claims and payments.)
• Major data leak e.g. Anthem – 80 million patients and employees records ;
UCLA Health 4.5million patient records.
• Increase the efficiency of bills payments process.
Kuo Chuen

（ V i s a / D o c u S i g n )
The project is in the proof-of-
concept stage. It brings DocuSign’s
Digital Transaction Management
(DTM) platform and eSignature
solution together with Visa’s secure
payment technology (via Bitcoin
blockchain).
Users, through their Cars, will be
able to pay for toll fees, buy
pizza ,or subscribe for satellite
broadcast programs.
Consumers can hop into a car in
a showroom, configure the
lease, insurance and other
expenses such as parking and
tolls, DocuSign it, pay via Visa,
and drive off.。
source：https://www.docusign.com/blog/the-future-of-car-leasing-is-as-easy-as-click-sign-drive/
Contract:
Utilise Docusign to verify lease
and insurance.
Report:
Check driving records
In car payment:
Use Visa card
Service:
Connections through Apps.
Kuo Chuen

source：http://www.wanbizu.com/fazhan/201512015809.html；http://www.wanbizu.com/news/201602186602.html；
http://www.wanbizu.com/news/201602186602.html
Government Administration
Ukraine will be the
first to employ
blockchain technology
in its government
administration system..
Bitnation is collaborating
with Estonia to utilise
blockchain to administer
government
affairs…………
A new political party
in Australia is
advocating for the
use blockchain as the
mechanism for voting.
Kuo Chuen

Kuo Chuen

小蚁AntShares 布比区块链
Many more projects are in the pipeline© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

WanXiang Blockchain Labs is a frontier research lab focusing on blockchain
technology. The lab will gather experts in this field to work on technological
development, business applications, industrial strategy and other aspects.
The lab will also guide entrepreneurs, and provide reference for the development
of the industry and policy making.
Its overall aim is to benefit the society and economy with blockchain technology.
Products
WanXiang Blockchain Labs
source：http://www.blockchainlabs.org/
Bitcoin blockchain
based development
platform
Ethereum blockchain
based development
platform
Bitshares blockchain
based development
platform
factom blockchain
based development
platform
Kuo Chuen

AntShares utilised blockchain technology to digitise physical real world
assets and ownership rights. Through the node to node connection in the
network, Antshares decentralised financial service processes, such as
registrations, security issuances, assets transfers, and settlements
administrations.
Areas for applications
Equity
Crowdfunding
P2P Online
lending
Employee
Shares Issuance
Authorisation
of e-contract
A n t S h a r e s
source：https://www.antshares.com
Kuo Chuen

Jingtum BeiJing and HNA collaborate through blockchain
1 Corporate Wallet
Procurement
detailscash
transfersettlement
• Utilise blockchain to
develop a low cost
settlement system.
• Increase efficiency of
information
dissemination
2 Supply chain financing
• HNA award employees with product
discounts, rewards, and bonuses
through the blockchain application
developed by Jingtum.
• Ensures confidential information of
employees are secured, and allows
employee to enjoy more discounts
rewards.
3 Awarding of Welfare bonuses
• Utilise the encryption
technology that is based on
Jingtum block chain.
• Aims to solve the
difficulties in cashflow and
financing ,and in high loan
interest faced by suppliers.
source：http://www.8btc.com/jingtong-hna
Kuo Chuen

BuBi Blockchain
Applications
Equity
Secured Private
equity
transactions。
Reward points
Management of
customer rewards
points。
Supply chain
immutable data
management ，
Supply chain
management。
Value Propositions
source：http://www.bubi.cn/#page4
Efficient
verifications of
transactions
Multiple
signatories
authorisation
Efficient access to
accounts ledger
Multiple assets
Issuance
Smart contract
Blockchain
Exchanges
Kuo Chuen

V i e w F i n
• Customised Blockchain solutions
• Accreditation of digital assets, Risks management,
Products Snapshots
Project Prometheus - Equity Management
Solutions: Private or Permissioned Blockchain
for Equity Management
• Uses：Equity registration, transfer, or OTC
trades.
• Clients: Crowd-funding, Equity Exchanges ,
P2P Leading, Private Equities ,and clients
requiring OTC trades.
Project Gaea - Land Registration
Solutions：Private or Permissioned BlockChain for
Land Registration
• Uses：Provide trustless proofs for cross-regional
land rights-transfer , real time information
validation, decentralised immutable data storage、
and instant settlement for digital transactions.
Project Hermes – Royalty/reward Points
management.
Solutions：Manage customers reward
points through Permissioned Blockchain.
• Uses：Manage multiple reward points
programs .
• Clients：All B2C businesses and services.
Project Themis - RegTech Chain
Solutions：Private Chain Solution for Governments
/NGOs to implement effective regulatory
governance.
• Uses：Immutable and time stamped record
management. Improve integrity of information
and increase transparency.
• Clients：Governments, NGOs, Regulatory Bodies
source： http://viewfin.com/
Kuo Chuen

数贝荷包Digital Wallet
Developed by Yi Cheng Interactive Technologies ，and Sunshine
Insurance Group is the first corporate user of the digital wallet。Allow
Sunshine insurance client to manage, transfer and transact customer
reward points.
Product features and benefits
• Decentralised reward points
system。
• Users can self negotiate,
transfer and transact reward
points. Increase the liquidity
of reward points.
• Increases B2C and C2C
interactions.
source：http://m.caijing.com.cn/api/show?contentid=4090411
Traditional centralised model Decentralised model© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

Yangtze Delta Region Institute of Tsinghua University
together with Canaan, Hash, and BST established the China’s
blockchain applications research centre, which aims to develop
the use of blockchain technology.
Yangtze Delta Region Institute of Tsinghua University
Companies Introduction
• Founded in 2012, Canaan
Creative is the worldwide
leader in producing Blockchain
servers and solutions for
repetition ASIC. Our products
are sold to over 150 countries
worldwide.
• 1Hash provides a
professional and reliable
service platform for efficient
bitcoin management ,and
development platform for
blockchain research.
• BST provides cloud computing
(PaaS) service and software
management service (Saas) for
Beijing government to manage
information resource.
• Main product/service ： Digital
DXS-Cloud (Paas) ,and iTaxonomy
source：www.btc798.com/article-8759-1.html； http://canaan.io/zh/%E7%BD%91%E7%AB%99%E9%A6%96%E9%A1%B5/ ；http://www.synball.com/synball/home/；
http://www.1hash.com/index.html
Kuo Chuen

“One Belt, One Road”Blockchain applications
As the countries along the One
belt ,One Road project transact using
USD, the China government wishes to
utilise blockchain technology to
develop a cryptocurrency system which
these countries can transact on.
Through the Asia Financial Cooperation
association ( to be established),
countries members can work and
decide on the rules, and protocols to
ensure the security and the legality of
the cryptocurrency system.
Improve financial
cooperation, and
communication
Help China corporates
to internationalise
Aid China corporates to minimise
foreign investment pitfalls
Digitise investment/trade information
of the investments in countries along
the “One Belt,One Road” project.
Blockchain-
• will ensure data security ,
transparency, and allow co-
verification, and authorisation of
information。
• Protect intellectual property rights。
Through the digitisation of
production capacity ,and blockchain
network, China corporates can
• Attract investors in countries along
the “One Belt,One Road” project
• Carry out crowd funding in these
countries or internationally.
• Or even conduct IPO on the
blockchain network.
Solve China’s problem
of production over capacity
source：http://www.ftchinese.com/story/001065381?full=y
Kuo Chuen

Blockchain 2.0：Ethereum
Ethereum is a decentralized platform that runs smart contracts:
applications that run exactly as programmed without any possibility of
downtime, censorship, fraud or third party interference.。
• Objective：Develop apps which run on a custom built blockchain that
enable shared global infrastructure and that represent the ownership of
property。
• Value proposition：enables developers to create markets, store
registries of debts or promises, move funds in accordance with
instructions or a futures contract, and many other potential
developments, all without a middle man or counterparty risk。
Kuo Chuen

Microsoft, R3, Samsung ,Deloitte、RWE ,and IBM.
What problem does Ethereum wish to solve ?
Utilise smart contract to mitigate counter party risk
and issues
Blockchain 2.0 Core
- Smart contract, Smart Asset
- Rootstock a smart-contract peer-to-peer platform,
is rising fast to challenge Ethereum in Smart asset
developments.
Ethereum supporter？
Blockchain 2.0：Ethereum
Kuo Chuen

Ethereum: decentralised smart application
source: https://slock.it/ethereum_computer.html
Rent, sell or share anything - without
middlemen Slock.it:
Utilise The Ethereum Computer to:
- Turn Personal Assets into Income : securely rent
access to any space or compatible smart object,
without intermediaries. Underused assets such as
temporarily vacant apartment is an opportunity to
make a profit.
- Develop applications for smart contract, and
smart asset to find, locate, rent and control any
object managed by an Ethereum Computer.
Kuo Chuen

Making the world’s
systems honest
“Honesty is subversive” - Paul Snow
Kuo Chuen

• In today’s global economy trust is in rare
supply。This lack of trust requires the devotion
of a tremendous amount of resources to audit
and verify records. Thus reducing global
efficiency, return on investment, and prosperity.。
• Incidents such as the 2010 United States
foreclosure crisis demonstrate that, the current
processes are terribly inaccurate, efficient and
prone to failure.。
• Factom removes the need for blind trust by providing
precise, verifiable, and immutable audit trail.
“Honesty is subversive” - Paul Snow
Kuo Chuen

Factom’s blockchain technology can be
adapted to almost any organization.
• Businesses and governments can use
Factom to simplify records management,
record business processes, and address
security and compliance issues。
• power a remarkable range of applications,
e.g. audit systems, medical records,
supply chain management, voting
systems, property titles, legal applications,
and financial systems.。
Factom maintains a permanent, time-stamped record of
your data in the blockchain. Reduce the cost and
complexity of conducting audits, managing records, and
complying with government regulations
Application Usages Factom Proof- Network value
source：http://factom.org/
Proof of Existence :
Document existed
in this form at a
certain time
Proof of Process:
Document is linked
to this new updated
document
Proof of Audit:
Verifying the
changes in the
updated document© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

Factom Use Case 1 – Saving BoA $17 Billion
Factom could utilize the bitcoin blockchain to keep
Bank of America’s records permanently engrained in
the distributed public ledger.
The entries are then “filed” into directory blocks
and secured to the bitcoin blockchain every ten
minutes. They can then be audited in real time and
verified instantly, allowing everyone to double check
the work completed and catch mistakes if they arise
before they become a problem.
Background
Multiple mortgage companies, were fined
billions of dollars due to a mishandling of
mortage records. One of these companies was
Bank of America who fell victim to a $17 billion
fine, also known as the largest fine in history.。
Solution
Kuo Chuen

Factom stores data for its clients using
encryptions that are called hashes in blockchain
in a decentralised system. Because the data is
encoded, no one except the user who created the
encryption can decipher it.
Blockchain technologies could prevent the
disastrous Sony hack ,and shift big companies
away from central databases.
Factom Use Case 2 - Protecting Sony Pictures with Blockchain
Technology
Background
Solution
On November 24, 2014, a hacker group which leaked out
confidential data from the film studio Sony Pictures
Entertainment. The data included personal information
about employees and their families, e-mails, salaries,
copies of then-unreleased Sony films….
Kuo Chuen

Factom can digitized landownership documents
and store them in a decentralized blockchain.
Any land transactions and transfers can be
track . Furthermore unauthorized or illegal
changes can be detected and corrected.
Factom Use Case 3: Unlocking $9 Trillion in Land Value
Background
Solution
In many developing countries, land owners do not have
proof of rights to landownership 。Hernando De
Soto :”main problem of development is not that the
poor in the third world lack capital, but that many lack the
legal title to assets they already hold. Giving them legal title
will unleash this “dead capital” so that it can be used
as collateral for loans to fund businesses or expand
homes.。
Kuo Chuen

Global Perspectives
The potential of decentralised ledgers and block chains
Kuo Chuen

Recent Developments – Collaboration Of Governments With Industry
To Explore Strategic Potential Of Block Chains
Implementation of block chains is driven by:
1. The ability of block chain to provide a basis for cryptographic trust
in a similar way to PKI
• Block chains could leverage PKI’s deployed scale and governance
• PKIs could leverage block chain’s payment and ledger functions
2. Permissioned ledgers contain a data field of unlimited size
• Information about a transaction, including the contract, licence or copyright,
could be included, providing a strong additional factor for trust.
• Enables ‘smart contracts’, offering efficiency and non-repudiation.
Kuo Chuen

3. Smartphones are becoming the de facto trusted user device
The latest smart phones include new security features such as:
• Trusted Platform Module – secures digital certificates and cryptographic
keys for authentication, encryption and signing
• Consumers can sign transactions (eg using a block chain) and payments (eg
using a ‘trusted Bitcoin’) using smartphones.
Recent developments – Collaboration of Governments
with Industry to Explore Strategic Potential of Block Chains
Kuo Chuen

“Airbnb Co-founder Eyes Blockchain Tech For User
Reputation And Trust”
13 Mar 2016
• Blecharczyk, Airbnb’s CTO said that Airbnb would be looking
into Blockchain integration this year, or a similar distributed
ledger system, to authenticate a user’s reputation and
establish trust on the platform.
Source: http://www.theblockchain.com/2016/03/13/airbnbcofoundereyesblock chaintechforuserreputationandtrust/
Kuo Chuen

“Microsoft & IBM Declare Blockchain Open For Business”
17 Feb 2016
• IBM has announced the official launch of its digital ledger deliverance
• Brings blockchain services to a cloud-based system
• Platform allows users to create, deploy and run blockchain-based
applications.
• The London Stock Exchange Group is engaged in the development of
open blockchain technologies with IBM
• create solutions that will help manage risk and bring additional transparency to
global financial markets
Source: https://news.bitcoin.com/microsoftibmdeclareblockchainopenbusiness/
Kuo Chuen

Formed 9 Feb 2016© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

Although，
At present Blockchain still have
shortcomings.
Kuo Chuen

• Is blockchain really superior to current solutions？What are the benchmarks？
* Can blockchain really reduce resources cost , improve service quality or
enhance users experience?
• Immutable public ledger, standardised contracts, accounting, and transactions
may seems too idealistic .
* Different nature of businesses ,and changing organisation needs will impede
the establishment of a single standard.
• To succeed, blockchain applications need to create true value to the users.
• Issues on the consolidation and allocation of resources：
*How should research resources be allocated ？Can related or similar resources
be consolidated to create synergies？
• What solutions ,and which industry domains should receive the most resource
funding?
source：“区块链落地还有多远”《财新周刊》 2016年第7期出版日期 2016年02月22日
Application suitability
Consolidation and allocation
Of research resources.
Kuo Chuen

• Ensuring security and immutability of data may drive up cost.
*To ensure the immutability of data（One needs enough computing power to
control more than 51% of the data copies to gain control of the
blockchain) ,implies incurring huge storage and resource power cost.
*Low storage efficiency：1.Huge amount of copies. 2.Blockchain size cannot be
reduced（expired and useless data will also be stored.).
• Rebooting of data is time consuming：New content X number of copies，and
coupled with distance and bandwidth, will be time consuming。
Affect user experience, e.g. high volume trading , processing huge data base.
• Illegal activities e.g. money laundering, financing terrorism, fraud, and
impersonation.
* A decentralised framework may not meet regulatory requirements.
* Early intervention and overregulation by regulators, may impede blockchain
developments, and the potential benefits of blockchain may not realised.
source：“区块链落地还有多远”《财新周刊》 2016年第7期出版日期 2016年02月22日
The likelihood
of reducing costs?
Regulatory requirements
Concerns ?
Kuo Chuen

But Don’t Get Left Behind!
Noah's
Ark
Kuo Chuen

What is happening and what
will happen?
• Unbundling and decentralisation of
financial services
• Same data, same page, less errors
• Real time settlement without need
for financial intermediaries
• Shaving off duplicative and
redundant services
• Security boost
FINTECH
Banks Are Only The Beginning…
Kuo Chuen

Capital Markets
• Smart Contract post trade settlement
• Automated
• Efficient
• No need for trusted third parties
Personal Insurance + Digital
Identities
• Distributed ledgers with hospitals
• Seamless processing
• KSI authentication
• Boost claims efficiency
As Wide As Your Imagination Can Take You!
Kuo Chuen

Real-time Accounting
• Immediate data flow
• Programmable accounting entries
• One master prime ledger to serve
management, bank lending,
regulatory purposes
• Less errors, free of manipulation
Company
A
IRAS
B.O.D Suppliers
SH
Permissioned Public Ledger
Trade Flows
Real-time GDP
Reporting
As Wide As Your Imagination Can Take You!
Government Budgets
• Programmable smart contracts for
budget allocation
• Real-time GDP and key data reporting
• Verifiable and trusted
Kuo Chuen

Don’t rise with internet , but trip by blockchain。。。
Some internet companies may not pay much attention to ,or even disregard
blockchain. If they miss this chance to utilise the blockchain development, the
raise of blockchain may disrupt their technology roadmap.
-Yao Yu Dong（Director of China Central
Bank- Institute of Finance）
千万别生于互联网死于区块链。。。
Kuo Chuen

Regulators should keep up with financial innovations
MAS Ravi Menon： “If you start regulating every
one of those, you stifle a lot of innovation, and they
don’t get a chance to grow,” MAS will regulate
fintech firms only when they pose risks.
Support for FinTech：
• Promote Greater inter-operability across data systems is a key priority. E.g. an “all-in-one” addressing system, that will
enable e-payments using the payee’s mobile number, email address, social network account, or other proxies. Without
the need to know the payee’s bank account number.
• MAS will therefore introduce a “regulatory sandbox” approach that aims to give FIs more confidence to experiment and
launch their innovative products or services within controlled boundaries.。© 2016 Blockchain Research Group Directed by Prof David Lee
Kuo Chuen

Don’t Get Left Behind!
Kuo Chuen

颠
覆
2.0
Kuo Chuen

THE ECONOMICS OF FINANCIAL INCLUSION
• The problem of financial exclusion does not just exist in undeveloped
countries
• 7.7% of US households are unbanked and 20% are underbanked
• The underserved in the world turn to non-traditional forms of
alternative financial services such as those provided by cheque cashers,
loan sharks and pawnbrokers.
• For example, illegal workers in the US who cash cheques via agents such
as cheque cashing depots or convenience stores.
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen

• The global picture of the unbanked and underbanked is even more skewed.
• Only 50% of adults in the world have an individual or joint account at a formal
financial institution (Demirguc-Kunt and Klapper , 2012)
• There are 2.5 billion adults in the world with no formal bank accounts, most of them
are in developing economies.
Source: newsroom.mastercard.com
THE ECONOMICS OF FINANCIAL INCLUSION
© 2016 Blockchain Research Group Directed by Prof David Lee Kuo Chuen

Mobile (Internet) Banking Penetration
2015.06
Kuo Chuen

The Chinese Article
advocate Singapore to use
“Blockchain Technology” to
expand its business network
into ASEAN ( 10 countries,
600m people) ,and to adapt
the Financial Inclusion
model of China and Kenya
to help Singapore’s
neighbours.
-David Lee and Yan Li
15th May 2015, Lian Zaobao
Kuo Chuen

Alibaba & Ali Pay
Kuo Chuen

Financial Inclusion+ Sharing economy+ Blockchain =
颠覆 (Dian Fu)
Kuo Chuen

http://www.smu.edu.sg/podcast/cryptocurrency-revolution-and-its-impact
BLOCKCHAIN THE DISRUPTOR
Oct 2014Podcast :
Decentralised
Bockchain
Reeduces
Business Cost
Kuo Chuen

Bitcoin
Kuo Chuen

Cryptocurrency
Kuo Chuen

Financial Services and Blockchain
Kuo Chuen

A software platform for fast
Blockchain ,and Smart
Contract prototyping ,and
application development.
Blockchain As A Service
Drove effort to create a new
architecture at IBM for connecting
devices in Internet of Things (IoT)
Focused on wearable technologies
• Apple Watch
• Connected medical devices
• Application of sensors and
connectivity to industry
Recruited Paul BrodyDeveloped RUBIX
Support from Big 4
Hiring people with expertise in
Ripple, Hyperledger and Chain.
Aim to be neutral advisor for
clients in implementation,
rather than technical specialist
Blockchain Advisory
Commercial Sidechain
“Liquid” to facilitate fast
and secure transfers
between exchange or
brokerage accounts
• Integrate multiple
blockchains
• Distributed file storage
permission
• smart contract capable
blockchains
Strategic Partnerships
Kuo Chuen

IBM Watson
• IBM is part of the Linux-based Hyperledger project.
• Offer ‘blockchain as a service’ for developers to use
within the IBM Cloud via a service called Bluemix. Its API
infrastructure allows external data to be plug into the
WATSON.
• Via the Watson platform, IoT information can be enter
into its blockchain suite. Such information can be
transfer from RFID chips, barcode scans or mobile
devices.
source：http://thenextweb.com/apps/2016/02/16/ibm-has-just-open-sourced-44000-lines-of-blockchain-code-on-github/
Kuo Chuen

From Dark Net to Saviour?
• Is Blockchain a collaboration enabler?
• A basis upon which people/entities can easily collaborate with distant
strangers/entities
• Is Blockchain an asset sharing enabler?
• Will Blockchain lead to a self governing IoT society based on voluntary
institutions via voting?
• Will Blockchain lead to a large scale de-centralized collaboration?
• Will Blockchain be able to run a mutual insurance pool?
• Will Blockchain be able to establish a mutual credit system?
Kuo Chuen

huangyiya07@126.com陈万
Blockchain Research Group
W u Yu T i n g Z a n g M e n g Yu Sun Ming
Chen WanFeng Huang YiYa Lee YinHao
myzang.2015@maf.smu.edu.sg
huangyiya07@126.com
yuting.wu.2015@maf.smu.edu.sg
wfchen.2015@maf.smu.edu.sg Leeyinhao83@gmail.com
ming.sun.2015@maf.smu.edu.sg
Kuo Chuen

Join our
Blockchain, be
A new node
！
Kuo Chuen

Acknowledgements
•8btc forum
•Mentioned companies
•Authors of cited websites
For sharing knowledge and information of Blockchain!
Kuo Chuen

The Future of Fintech and Blockchain

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