Presentation at the M20 Zero Day Conference - 20 Years of Hacking Culture http://mo20.olografix.org/

1. Hacking finance
Crypto & math based currencies, smart contracts
and blockchain decentralization
Raffaele Mauro

2. 2

3. 3

4. Internet :
Aperta
Generativa
Decentralizzata

6. Sharing & peer to peer

7. 7
Crowdfunding

8. 8
Peer to peer lending

9. 9
Disrupting money & payments

10. 10
Alt & Virtual currencies

12. 12
Paradigm shift
˃Paper published in
2008
˃First release in 2009
as open source
software
˃Mysterious “Satoshi
Nakamto”, owns 1M
Bitcoin (=305 M Euros
!) never spent

14. Open source finance goes big
Jun13-Jun14
˃8x Bitocin market cap
(1Bn $ -> 8,3 Bn$)
˃12x VC investments
(+200 M $)
˃18x Github
repositories
˃7x Wallets Mark Andreessen:
Bitcoin today is like the Internet in 1994

15. Distributed public ledger
Network of communicating nodes sharing a public transaction database

16. Blockchain
˃Aimed at proving
transactions
˃Contains all
transaction history
˃Robust & resilient
˃Blocks record recent
transactions +
connected linearly
˃Longest chain enables
verification / trust

17. Cryptography & transactions
˃Private key:
˃ Digital signature
˃ Allows spending
˃Public key:
˃ Allows signature
verification
˃ Represents the wallet
address
˃Transactions are
published in the
blockchain

18. Effects
˃Decentralized, peer to peer trustless system
˃Full transparency + pseudonomity
˃Cryptographically secure
˃Resilience to marketplace failures
˃Viral growth
˃Not dependent central bank/government

19. How to get bitcoins

20. Mining
2009
2010
2011
2012
2013
2014
2015
1
100
10,000
1,000,000
100,000,000
10,000,000,000
1,000,000,000,000
˃ Bitcoin released
algorithmically
˃Miners solve complex
computational
problems
˃Mining enables
transaction validation
+ block generation
˃Fixed amount of
Bitcoins every 10
mins

21. Monetary supply

22. How to trade €/$ with Bitcoins

23. Secure Wallets

24. Ecosystem

25. Accelerators & Investors

26. VC Investments

31. 31
Beyond money

32. Smart contracts
˃Algorithmically based
contract settlement
˃Self-executing/Self
enforcing
˃Not based on third
parties
˃Not based on legal
systems/institutions
˃Examples: notary,
company formation,
insurance, voting,
shared ownership

33. Decentralized applications
˃Redistribute digital
assets according to a
binding set of rules
˃Open source and
autonomous
˃Data and operation
cryptographically
stored
˃Based on a public,
decentralized
blockchain
˃Flexible, transparent
and resilient nature

34. ˃Platform for
executing user
generated smart
contracts and
decentralized
applications
+
˃Contract
programming
language
˃Pre-launch in 2014

38. 38
Beyond finance

39. 39
Government, Democarcy, Law

41. Decentralized autonomous organizations
˃ Decentralized networks
of narrow-AI
autonomous agents
˃ Organization operated
algorithmically through
a set of rules
˃ Rules implemented on
a publicly auditable
open-source software
˃ Software + data
distributed across the
computers of their
stakeholders

42. Utopia ?

43. Dark side 1 - No privacy

44. Dark side 2 – Rigidity and Control

45. Dark side 3 – Polarization / exclusion

46. Dark side 4 – Efficient black markets

47. Dark side 5 – Wealth concentration

48. Scenario 1: Big players win the race
+ increased algo-based control
+

49. Scenario 2: Big players disrupted
+ swarm ecosystem
+

50. Scenario 3: Mixed ecosystem
+ collective choices to be made
+

51. Thank you !
rmauro@post.harvard.edu