Consensus 2015 on Twitter and sli do Consensus

#Consensus 2015 on Twitter and sli. do Consensus 2015 State of Blockchain @Garrick. Hileman 10 September 2015 State of Blockchain 2015 1

1. Industry Overview 2. State of Bitcoin 3. State of Blockchain

1. Industry Overview

All-Time Venture Capital Investment in Bitcoin & Blockchain Startups $894 m Note: Q 3 2015 projectedbased on run rate as of Sept. 7 2015 Data sources: Coin. Desk, Crunch. Base

23 Countries with VC-backed startups Argentina India Australia Israel Barbados Canada China Japan Kenya Philippines Singapore South Korea Sweden Luxembourg Switzerland Denmark Mexico United Kingdom France The Netherlands United States Germany Panama Sources: Coin. Desk, Crunch. Base. Images from. Wikipedia

2014 Bitcoin VC Investment Exceeded. Early-Stage Internet Investment Bitcoin vs Early Internet VC Investment ($m) $400 $362 Millions $350 $300 $250 $200 $150 $100 $50 $0 2014 Bitcoin 1995 Internet Note: Internet figures includeonly first sequence venture deals. Allfigures unadjusted forinflation, changes in the cost of launching a startupoverlast two decades, etc. Furthermethodology discussion. Data sources: Coin. Desk, Pricewaterhouse. Coopers

2015 YTD Investment+94% vs. 2014 2015 YTD VC investment $436 m 2014 VC investment (as of Sep. 7) $224 m Data sources: Coin. Desk, Crunch. Base

Bigger VC Deals Suggest Healthy Funding Environment * $80 Millions $70 $60 $50 $40 $30 $20 $10 2013 Q 4 2014 Q 1 2014 Q 2 2014 Q 3 2014 Q 4 2015 Q 1 *Note: 21 Inc. Is excludedbecause theprecise timing of when the$116 mwas raised by 21 Inc. in various individualstages, has not beenrevealed. Source: Coin. Desk 2015 Q 2

Total VC Investment and. Average. VC Deal Size Projected to Plummet in Q 3 Quaterly VC Investment ($m) $250 $12 $228 Millions Millio $10 $200 $10 $150 $145 $133 $8 $8 $6 $100 $50 $74 $81 $4 $3 $4 $2 $0 $0 Q 3 2014 Q 4 2014 Quarterly Total VC Investment ($m) Q 1 2015 Q 2 2015 Q 3 2015 Quarterly. Average VC Investment Deal Size ($m) Note: Q 3 2015 projectedbased on run rate as of Sept. 9 2015 Data sources: Coin. Desk, Crunch. Base

2015 Bitcoin VC Projected to Fall Behind of Early-Stage Internet Bitcoin vs Early Internet VC Investment ($m) $700 $631 Millions $600 $639 $500 $400 $362 $250 $200 $100 $0 2014 Bitcoin 1995 Internet 2015 Bitcoin - 1996 Internet Projected Note: Internet figures includeonly first sequence venture deals. Allfigures unadjusted forinflation, changes in the cost of launching a startupoverlast two decades, etc. Furthermethodology discussion. Q 3 2015 projected basedon run rate as of Sept. 9 2015 Data sources: Coin. Desk, Pricewaterhouse. Coopers

Bit. License Imposes High Costs on Startups Bit. License Applications Ceased NY Operations 22 15 • Bitstamp NY license application cost roughly $100 k George Frost Chef legal officer, Bitstamp Source: Coin. Desk. Image from. Bit. Stamp

Dark Market Bitcoin Transactions. Approximately Equal to Bit. Pay Transaction Volume Bit. Pay Dark Market Sources: Soska and Christin (2015)‘Measuring the. Longitudinal. Evolution of the. Online Anonymous Marketplace Ecosystem’, Coin. Desk

Regulators Don’t Want to Kill the Golden Goose • Initial sales tax moratorium • Avoided costly phone company designation Images from. Google

Xapo Moves Headquarters from Silicon Valley to Switzerland Citing Customer Privacy Concerns Wences Casares • “This is not to facilitate crime, this is to protect privacy” • “There are some customers that will bring more balances if we do this and there are some customers who have said ‘we will work with you if you do this’” Xapo CEO Source: Coin. Desk 14

2. State of Bitcoin

Bitcoin. Academic Research Increased Exponentially, 33% of Publications Economics Related Number of Bitcoin Academic Research in Each Year Distribution of Bitcoin Academic Research Sociology 8% Politics 2% 250 200 Law 19% Economics 33% 150 100 Environment 1% Cryptograph y and security 12% 50 Finance 8% Computer Science& Engineering 16% 0 2008 2009 2010 2011 2012 Accounting 1% Note: data collection for 2015 is stillin progress. Sources: search ‘Bitcoin’on JSTOR, Science Direct, Ingenta, Microsoft academic search, Springer. Link, SSRN, Taylor and Francis, Wiley, Ar. Xiv, Oxford Journals and Cambridge Journals. Peer-to-Peer. Review: The State of Academic Bitcoin Research 2014 2013 2014 2015

Q 3 Most-Viewed Coin. Desk. Articles; Four. Articles are Related to Bitcoin’s Price Coin. Desk’s Top 10 Most Viewed Stories in Q 3 Rank Title Date 1 Bitcoinprice falls 14% following. Bitfinex'flash crash' August 19 2 Wedbush report projects $400 bitcoinprice by 2016 July 10 3 Russianpresident Vladimir Putinaddresses digital currency July 14 4 Bitcoinprice slumps following. Bitfinexoutage August 24 5 8 banking giants embracing bitcoin and blockchaintech July 27 6 Coin. Mx execs arrested for operating illegal bitcoinexchange July 21 7 Bitcoin'forked' in controversial bid to resolve scalabilityquestion August 17 8 Bitcoinprice fallsbelow $200, hits six-month low August 25 9 Forget gold, bitcoin is backed by time July 4 Doublespendingrisk remains after July 4 th bitcoin fork July 6 10 Source: Coin. Desk top 10 stories basedon page views

Bitcoin Price Volatility Returned in Q 3 $320 30 July 14 July Bitcoinprice rallies amidfinancial uncertaintyin Chinaand. Greece $300 Ethereumlaunches long-awaited decentralizedapp network $280 1 August 21 July $260 Bitcoin exchangeit. Bit launches. OTC tradingdesk 6 July Double spendingrisk remainsafter July 4 th bitcoin fork $240 $220 Mt Gox CEO Mark Karpelesarrested in Japan 9 August Bitcoinexchanges Krakenand Bitfinex cut services in. New York 30 August UK bankinggiant Barclaysto allow charitiesto accept bitcoin 17 August Bitcoin‘hardfork’ proposed in controversialbid to resolve scalability question $200 1 -Jul 8 -Jul 15 -Jul 22 -Jul 29 -Jul 5 -Aug 12 -Aug Source: Coin. Desk Bitcoin Price Index, daily datacollectedat 00: 00 UTC 19 -Aug 26 -Aug 2 -Sep

Greece is Not Alone: 24 Countries Have an Ongoing Debt Crisis … Armenia Greece Portugal Belize Grenada Spain Costa Rica Ireland Sri Lanka Croatia Jamaica St Vincent and the Grenadines Cyprus Lebanon Tunisia Dominican Republic Macedonia Ukraine El Salvador Marshall Islands Sudan The Gambia Montenegro Zimbabwe Sources: Jubilee Debt Campaign, Guardian. Images from. Wikipedia

… and 14 More Are Vulnerable to a Debt Crisis Bhutan Laos Sao Tome e Principe Cape Verde Mauritania Senegal Dominica Mongolia Tanzania Ethiopia Mozambique Uganda Ghana Samoa Sources: Jubilee Debt Campaign, Guardian. Images from. Wikipedia

Major Events that Would Possibly Impact Bitcoin Price: Interest Rate Hike-Strong US Dollar Source: it. Bit report: Impact of US Interest Rate Hike on Bitcoin

Projecting a 43% Increase in Q 3 New Wallets Over Q 2 Number of New Wallets Added Each Quarter 696. 436 700 600 Thousands 514. 583 500 481. 258 400 480. 715 451. 294 454. 435 Dec-14 Mar-15 488. 303 343. 121 300 200 118. 286 100 0 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 *Note: Q 3 2015 projectedbased on run rate as of Sept. 9 2015 Data source: Blockchain. info Jun-15 Sep-15*

Expedia: Purchases With Bitcoin. Are Down 40% • The lack of overall understanding regarding bitcoin was again an inhibiting factor • "If we give them a bitcoin payment, they don't know what to do with it, it's not a currency they understand. ” Connie Chung Senior payments product manager at Expedia • "We accept bitcoin as a way of just allowing customers to pay with whatever method they want to pay. For us, bitcoin is on an even playing field with the other payment types we offer. " Source: Coin. Desk

Factoring in Remittance Fees Makes Sub-Saharan Africa Most Fertile Market for Bitcoin BMPI Regional. Distribution - Top 10 Asia, 0% Post-Soviet/ Communist, 10% Europe, 10% Top 30 Europe, 3% Middle. East & North. Africa, 13% Asia, 7% Middle. East & North. Africa, 10% Latin. America, 20% US & Canada, 10% Sub-Saharan Africa, 40% Latin. America, 17% US & Canada, 3% Source: Hileman (2014)‘Bitcoin Market Potential. Index’, London. Schoolof Economics working paper Announcement article: http: //www. coindesk. com/argentina-most-likely-adopt-bitcoin/ Post-Soviet/ Communist, 17% Sub-Saharan Africa, 40%

North America and Europe Continue to Have the Most Bitcoin-Accepting. Businesses Source: coinmap. org (screenshot of 9 September 2014 and 2015)

As Hype Surrounding i. Phone 6 Launch Has Diminished So Has Apple Pay Usage March 2015 June 2015 Percentage of eligible Apple Pay users who had tried the service 15. 1% 13. 1% Usage of Apple Pay in transactions 39. 3% 23% Committed user 48% 33% Not sure how it works 31% 34% Forgot to use 32% 34% Concern about security 15% 19% Fears about it working 1% 4% When it comes to using a new payment rail, people have similar concerns about security and how it works, regardless of whether it is Apple Pay or Bitcoin Sources: Pymnts. com, Bank Innovation

3. State of Blockchain

Oct. 2015

‘Wall Street’ Should Take Blockchain Technology Seriously “Distributed ledger technology does have the potential to be disruptive in certain business models, but it has at least as much potential to be enormously empowering in existing middle business models in terms of making them lower cost, more efficient and less risky. ” Blythe Masters, CEO of Digital. Assets Holdings. LLC “So we won’t get there overnight but we will get there. How seriously should you take this? I would take it about as seriously as you should’ve taken the concept to the Internet in the early 1990 s. It’s a big deal and it is going to change the way that our financial world operates. ” Sources: You. Tube, Coin. Desk, Linked. In

‘Wall Street’ Is Taking Blockchain Technology Seriously Jay Reinemann Executive director of BBVAVentures Duncan Niederauer CEO of NYSE Euronext John Reed Chairman and CEO of Citibank Thomas F Dapp Research. Analyst, Deutsche Bank Source: The Financial. Services Club's Blog. Images from. Linked. In Oliver Bussmann CIO, UBS Bob Greifeld CEO, Nasdaq

Banks Embracing Blockchain. Technology in 3 Ways Engagedin independent experimentor partnered with bitcoin startups Publishedreports on blockchainorbitcoin Investedin bitcoin startups Sources: Fidor Bank, CBW Bank, RBS, ANZ, Westpac, Commonwealth Bank , Santander, Llyods Bank, BNP Paribas, Goldman Sachs, BBVA, Barclays, Let’s Talk Payment, Coin. Desk

Startup Ecosystem: Seven Different Industry Sectors Infrastructure Wallets Exchanges Universal Payment Processing Financial Services Mining Source: Coin. Desk

New Ecosystem Framework? : Bitcoin (currency), Blockchain (non-currency), Hybrid (both) Currency Non-Currency Source: Coin. Desk Hybrid

Blockchain & Hybrid Startups Have Raised $248 m of total VC Funding to Date, Represent 22% of Companies Total VC Raised ($m) No. of Companies Hybrid, 2% Hybrid, 16% Noncurrency, 20% Noncurrency, 13% Currency, 71% Currency, 78% Data sources: Coin. Desk, Crunch. Base

Oodles of Blockchain Use Cases Source: let’s Talk Payment

BMPI 2: Market Potential. Index for Ranking Blockchain Opportunities • Cost • Speed • Competition and alternatives • Market size • Other barriers to adoption (eg regulation)

#Consensus 2015 on Twitter and sli. do State of Blockchain 2015 @Garrick. Hileman 10 September 2015 State of Blockchain 2015 37