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REMCO MARCELIS
Sta
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o G
row
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FO
‣ Movies
‣ Carbon Credits
‣ Housing
‣ Mobile Apps
‣ Cancer Diagnostic
‣ Bitcoin on mobile phone
‣ Waste Management
2
[email protected] 0400 474 228
‣ $20m early stage technology
‣ $30m buy out / expansion
Ve
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‣ $30m bitcoin equity fund
THAT WAS THEN ... THIS IS NOW ...
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A beginner's guide to bitcoin
6 http://www.coindesk.com/information/
http://youtu.be/Gc2en3nHxA4
bitcoin IS money … as a medium of exchange
8
X ATO guidance August 2014: bitcoin is not money
Is a digital currency legal
tender?
Opportunity: No More Bank Fees
11
• Cryptography and Transparency replace the role of banks as Trusted Intermediaries
• Eliminate bank fees
$300
$350
$400
$450
$500
$550
$600
$650
$700
30-Jun 7-Jul 14-Jul 21-Jul 28-Jul 4-Aug 11-Aug 18-Aug 25-Aug 1-Sep 8-Sep 15-Sep 22-Sep 29-Sep
Bitcoin’s Price Has Been Declining …
State of Bitcoin Q3 2014 13
18 Aug
Bitcoin price
suddenly drops
in ‘flash crash’
11 Aug
18 Jul
Dell
announces it
will accept
bitcoin
Blockchain first
company to
pass over 2m
bitcoin wallets
22-23
Sep
PayPal and
Square
announce
bitcoin
integration
8 Jul
Xapo
announces
$20m funding
round
Source: CoinDesk Bitcoin Price Index, daily data collected at 00:00 UTC www.coindesk.com/price
9 Jul
Bitcoin industry discussion
of concerns over mining
pool 51% network control
Following
complaints, NY
extends BitLicense
comment period
21 Aug
9 Sep Supposed Satoshi
Nakamoto email
account ‘hack’,
blackmail attempt
… but Bitcoin Trading Volume is increasing
State of Bitcoin Q3 2014 14
Source: CoinDesk, Bitcoinity
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
Cumulative Trading Volume (bitcoins)
… and advancing on other networks
Source: Coinometrics.com, 30 April 2014
International Remittance Fees
10-20% PayPal
Fees 3-5%
International Remittance
16
Sending remittances costs an average of 7.90 percent of the amount sent Cutting prices by at least 5 percentage points can
save up to $16 billion a year.
19 Source: Coindesk: State of Bitcoin Q3 2014
@Dell tweet:
If you’re a retailer, there’s really no reason not
to accept bitcoin at this point “
”
Dell is offering up to 10% off certain
products for purchases made with bitcoin
Overstock.com
Bitcoin’s Price is Now on Yahoo Finance, Google Finance and Bloomberg
21 Source: Coindesk: State of Bitcoin Q2 2014
Venture Capitalists are backing the opportunities 2014 Bitcoin VC Investment Projected to Surpass Early-Stage Internet Investments
22
*Includes first sequence venture deals but excludes late-stage 1995 internet investments ($257.6m). For additional disclosure on
methodology see http://www.coindesk.com/following-money-trends-bitcoin-venture-capital-investment/
Source: CoinDesk, PricewaterhouseCoopers
$91.8
$290.0
$250.1
$0
$50
$100
$150
$200
$250
$300
$350
2013 Bitcoin 2014 Bitcoin Run Rate 1995 Internet*
Bitcoin vs Early Internet VC Investment (millions)
Source: Coindesk: State of Bitcoin Q3 2014
The emergence of bitcoin (sometimes referred to as the
Internet of money) is often compared to both the erly days
of when the Internet came about as well as as for its
potential
What are the risks?
• Reputational (isn’t it used to buy drugs?)
• Can’t it be hacked?
• Regulatory uncertainty
23
Risks: Bitcoin is used by drug dealers
24
Source: Global Financial Integrity, FBI. Full chart: http://cf.datawrapper.de/Gc83O/4/
Source: Coindesk: State of Bitcoin Q2 2014
Risk: I could lose all my bitcoin
25
Mt. Gox Allegedly Loses US$350m in Bitcoin (744,400 BTC)
Security matters
Regulation Update
27
Talk to: - Alan Tsen, www.coindoctrine.com - Reuben Bramanathan, www.adroitlawyers.com.au
August 2014 (Interpretation of current law) • For tax law purposes, bitcoin is property. Therefore, CGT asset
for income tax. • Personal use exemption applies, < $10,000 • Supply of bitcoin is a taxable supply. Therefore, GST may
apply to transactions. http://blog.coindoctrine.com/some-thoughts-on-the-atos-bitcoin-guidance/
December 2014 • Senate Inquiry
Double GST
28
Bitcoin
buyer
In Australia
In Singapore Bitcoin exchange
Price
$550
Price
$500
GST
$50
ATO (currently) takes the view that it is a taxable supply and not ‘money’ under the GST Act
This applies to
businesses who
have received
bitcoin too
Business that has
received bitcoin as
payment
Bitcoin exchange
International Comparisons
• Canada – Dealing in virtual currency constitutes a money services businesses (AML +
KYC requirements)
• US – IRS Notice 2014-21 - bitcoin is property – NY Bitlicense - broad regulations proposed – FinCEN October 2014 - money services business – Reported SEC investigation - unregistered securities
• EU – VAT directive 135 and Sweden VAT case – EBA report July 2014
29
http://en.wikipedia.org/wiki/Legality_of_Bitcoin_by_country
Bitcoin 2.0: Proposed Blockchain Uses • Decentralized transaction ledger could be used to encode
and confirm/transfer all property • Financial
– Currency, Stock, Private Equity, Bonds, Derivatives, Crowdfunding
• Public Records – Land Titles, Vehicle Registries, Business Licenses, Passports, Voter
IDs, Death Certificates, Proof of Insurance
• Private Records – Contracts, Signatures, Wills, Trusts, Escrows
• Physical Asset Keys – Home, Hotel Rooms, Rental Cars, Car Keys
• Intangibles: Patents, Trademarks, Reservations, Domain Names
31
http://ledracapital.com/blog/2014/3/11/bitcoin-series-24-the-mega-master-blockchain-list
Smart Contracts: Programmable Money
• Multisignature (multiparty) escrows (~Bitrated 2.0) • Financial exchanges • Savings Accounts • Domain name registries
• Self-enforcing contracts and agreements • Crowdfunding platforms, Prediction markets • Smart property • Intellectual property – Voting systems – Company governance • Nationstate constitution and bill of rights
32
Write your own self-executing, automatically triggered, automatically enforced, transparent Smart Contracts
33 http://forum.ethereum.org/discussion/1402/how-to-get-started-your-first-dapp-under-one-hour
Not only is the universe bitcoin stranger than we imagine, it is stranger than we can imagine. - Arthur Stanley Eddington
35
We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run - Roy Amara
Closing
• Stay open & Educate yourself
• Informed decision
• Recognise the risks AND opportunities
36
APPENDIX: Resources • Coindesk (Bloomberg of Bitcoin)
– http://www.coindesk.com
• Let’s Talk Bitcoin podcast – http://letstalkbitcoin.com/
• Industry experts
‘Crypto-guru’ Andreas Antonopoulos – http://antonopoulos.com
Economist Susan Athey (Stanford, Microsoft, Ripple) – http://www.coindesk.com/professor-susan-athey-people-use-bitcoin-intrinsic-value/
• Bitcoin Original White Paper
– Satoshi Nakamoto’s design for the blockchain (2008) – https://bitcoin.org/bitcoin.pdf
• Coindoctrine (Melbourne bitcoin advisory) – www.coindoctrine.com
37