Connected Event - Blockchain 3 05 2018

CONNECTED EVENT
- La blockchain et son impact sur le monde de la finance -
#SconnectE
3 mai 2018
8:30 – 14:00
Auditorium de la FER, Genève
6ème édition

Stimuler le lancement de
projets collaboratifs
Partager et échanger
sur ses expériences
OBJECTIFS

9:00 – 10:45 11:15 – 14:00
• Partage d’expérience
Daniel Haudenschild, Swisscom
Emilie Raffo, Torus Solutions
• Guide ICO
Vincent Pignon, Canton de Genève
• Conclusion
• Apéritif dînatoire - réseautage
• Introduction, Olivier Sandoz
• L’impulsion politique
Pierre Maudet, Canton de Genève
• La perspective académique
Jean-Pierre Hubaux, EPFL
Lamine Brahimi, Taurus Group
• L'écosystème start-up
Antonio Gambardella, Fongit

7
C4DT Presentation | 2018
Connected Event Geneva, May 3 2018
Blockchains and Digital Trust
Prof. Jean-Pierre Hubaux, Academic Director of C4DT

Transactions
9
Sender Receiver Amount
Trans. 1 Alice Bob 10 Francs
Trans. 2 Charles Deborah 25 Francs
Trans. 3 Deborah Emil 180 Francs
Trans. 4 Alice Francis 20 Francs
A crucial challenge: prevent double spending!

Hash N
The Blockchain: Immutable Ledger of Transactions
10
Trans. 3
Trans. 2
Trans. 1
Hash 1
Trans. 6
Trans. 5
Trans. 4
Hash 1
Hash 2
Block 1 Block 2 Block N
…
Trans. K
Trans. K-1
Trans. K-2
Hash N-1
Hash: One-way hash function: Unique fingerprint of its inputs

Decentralization: Replication of the Blockchain
11
… …
… …
… …
The Internet
Around 200 Gbytes in the case
of Bitcoin
Along with the hash values, replication
guarantees unforgeability of the blockchain

Mining Nodes
12
• Validate transactions
• Add them to the block they are building
• Broadcast the completed block to other
nodes
All these operations (especially the
many, many cryptographic
computations) have a huge cost

13
2008 : Birth of the Bitcoin
• Mankind discovers that a decentralized piece of software can embody a virtual currency
• That piece of software is the blockchain
• No central bank, no legal person, no regulation

”Decentralization”: Hashrate Distribution
among the Largest Mining Pools
16
https://blockchain.info/pools
4 Mining pools can
collectively
attack the system

18
60: yearly electricity consumption of Switzerland

19
Do You Need a Blockchain?
For a more complete version:
Do you Need a Blockchain?
Morgen E. Peck
IEEE Spectrum
Special Issue on Blockchains
September 2017

Center for Digital Trust (C4DT)
22

Center for Digital Trust (C4DT)
23
• A new initiative of EPFL around data protection, blockchains and cybersecurity
• Brings together companies and (EPFL) research labs
• Creation announced in December 2017
• Will be operational in the fall of 2018
• Will involve also other academic institutions
• 8 organizations associated with the announcement
• Several more have expressed interest in the meantime, including GE, FR and VD

24
EPFL faculty involved in C4DT
Aberer
Vaudenay
Ebrahimi
Süsstrunk
Kuncak
Larus
Hubaux
Odersky Troncoso
Ford Guerraoui
Falsafi
Le Boudec
FilipovićArgyraki
HugonierGrossglaus
er
Jetchev
Candea
Salathé
Fellay
… and more to join
Blockchain
Cloud computing
Cryptography
Cyber-physical systems
Data mining
Decentralized systems
Distributed systems and
algorithms
Finance
Genomics
Image conceptualization
Large-scale systems
Machine learning
Media Security
Network security
Personalized health
Privacy enhancing technologie
Programming languages
Reliability and security
Risk management
Semantic information
Software verification
West
Jaggi
Bugnion

25
The Digital Trust Platform – Technologies & Applications
PRIVACY
CRYPTOGRAPHY
FINANCE&
ECONOMY DIGITAL TRUST OPEN PLATFORM - DTOP
BLOCKCHAINS
SMART
CONTRACTS
SOFTWARE
VERIFICATION
SYSTEM SECURITY
HEALTH
GOVERNMENT&
HUMANITARIAN
CRITICAL
INFRASTRUCTURES
DIGITAL
INFORMATION
…
TRUSTWORTHY DIGITAL
PRODUCTS & SERVICES
APPLICATION
VERTICALS
TECHNOLOGY
PILLARS

26
C4DT – A "virtuous circle"
1) Trusted platform
2) Collaboration hub
3) Knowledge
transfer
PARTNERS
C4DT
Needs & Foresight
Specialists & Knowledge
Data & Infrastructures
Funding
Foresight & Opportunities
Research projects
Prototypes
Collaborative platform
Dr. Olivier Crochat
Executive Director

Conclusion
• Blockchains are useful to build consensus among mutually distrusting stakeholders
• Especially appropriate to keep track of (financial) transactions
• Tool to reinforce trust
• Pitfalls
• Technically: energy consumption, performance, miners’ collusion
• Cryptocurrencies: Use for tax evasion, money laundering, ransomware, payment for illegal
goods and services, funding of terrorism
• Emergence of fully anonymous (not just pseudonymous) cryptocurrencies, e.g. Zcash
• Tokenization: how do you make sure that the blockchain represents reality?
• Temptation to replace institutions by computers
• Misunderstanding and hype about blockchains
• EPFL’s response to this and related challenges: Center for Digital Trust (C4DT)
28

3 MAY 2018
LAMINE BRAHIMI
MANAGING PARTNER TAURUS GROUP
Blockchain and its impact on finance
Taurus Group SA
www. taurusgroup.ch
11 rue d’italie
1204 Geneva
Switzerland

31
AGENDA
1. SIX-Swiss Fintech Innovations prototype: lessons
learned
2. Digital assets: significant opportunity for a Swiss
player
3. Base conditions to succeed

1. WIDE RANGE OF BLOCKCHAIN APPLICATIONS
Source: Grant Thornton; team analysis
4. Internet of
Things
Blockchain
applications
5. Smart
contracts
6.
Decentralized
autonous
organization
(DAO)
Supply
chain
tracking
3. Industrial
applications
2. Financial
services
applications
Process
optimization
ICOs/
Tokenis
ationDigital
assets
Pay-
ments
1. Public
sector
applications
Digital
ID
e-GOV
services
Citizen
docume
nts
smart
cities
32

33
1. SIX-Swiss Fintech Innovations prototype: Objectives and organisation
GAIN PRACTICAL EXPERIENCE WITH DLT
DOES IT WORK?
LEARN FOR FURTHER IMPLEMENTATIONS
Project objectives Highly collaborative environment
Post-trading world: structured
products

34
1. SIX-Swiss Fintech Innovations prototype: Structured products settlement
SIX production-like test
environment
Each member with own
access
Limited investment
from banks
✓
✓
✓
Carefully prepared test
scenarios
✓
Nasdaq DLT technology
(permissioned DLT)
✓
• New
• Nasdaq provided
Existing
Existing

35
1. SIX-Swiss Fintech Innovations prototype: objectives and set-up
GAIN PRACTICAL EXPERIENCE WITH DLT
DOES IT WORK?
LEARN FOR FURTHER IMPLEMENTATIONS
Project objectives
✓
✓
✓
Robust understanding
YES
Extensions planned
Comments

'4 '18 '40 '298 '482
1'773
2'341
3'090
4'078
5'384
- - '0
'6
'142
'503
'664
'877
1'157
1'527
'551
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
XBT ETH 2017 post fly-up prices
36
316
%
43%
1
BTC
Less than 0.4% of
the total FX market
($5 tn per day)
2. Market expected to increase to CHF 7trn+ trading volumes by 2022
Digital asset market trading volumes
Annual trading volumes
CHF bn, 2013-2022, base case, only BTC and ETH
ETH

37
2. Surge in demand
25 m wallets
Total number of created wallets
Source: blockchain.info; etherscan.io; Team analysis
Ether, Daily transactions and unique addresses
12mn addresses
x30 since
Jan 2017
+120% since
Jan 2017

38
2. Numerous inefficiencies and anomalies to exploit
Multiple opportunities to seize especially for a Swiss player
D1. Market anomaly in exchanges
market
D2. Loosely regulated exchanges
D4. Lack of security
D3. Very limited investment offering
Western-European customers require EU or
Swiss counterparties
Trade: need proper supervision to increase
trust
Protect: need banking-standards security levels
to safeguard customers assets
Invest: need proper investment vehicles to
further drive adoption

39
2. Time for a swiss institutional-grade player to emerge
Building the next generation platform to trade, invest, protect digital assets
TRADE INVEST PROTECT

3. 5 Base conditions to succeed
ACCELERATE PACE OF REFORMS … FINTECH LICENCE
ACCELERATE FILE-TREATMENT … BERN
OPEN BANK ACCOUNTS …
COLLABORATE … AUTHORITIES, PRIVATE SECTOR, ACADEMIA
EDUCATE
40

La blockchain et son impact
sur le monde de la finance
L’écosystème des start-ups
Antonio Gambardella
3 mai 2018
Avec le soutien de

Customer
Front Office
(distribution)
Back Office
(manufacturing)
Processing
Infrastructure
Investing /
Wealth mgt
Personal
Savings
Payments
Lending
Capital raising
Consumer
Business
UX, digital front end
API-driven middle and
back office
Market infrastructure
Independent, UX, digital front end, middle and
back office

Blockchain as
application layer

Commochain - Bring Blockchain to Commodity Trading
IPStock - Ecosystem for visual digital assets on blockchain
Gmelius - Make your inbox instantly smarter and safer
Quantum Integrity - Technology to track digital image manipulation
Token Estate - Real estate investing on the blockchain
Wealth Initiative - Marketplace and automated valuation tool for
non-bankable assets

www.fongit.ch
a.gambardella@fongit.ch
Thanks

Geneva, 03.05.2018
Blockchain as driver for digitization

Blockchain Maturity
Audit & Compliance
Security & Privacy
Adoption
Open source standard.
Double blind: blinding between
participants
Triple blind: Central blind identity
broker
Central repository of transactions No private data leaves country
Specific audit reporting to provide
XBRL type reporting.
Platform business KPIs in a blind
world (how do we bill) solvedFull transparency out of the box
Specific functionality to comply with
topical regulation (GDPR; EU161)
Throughput interrogation and
analytics solved
Community consortium of industry
leaders
Brand neutral joint venture
If we build it, they will come
Node Strategy with separate
channels
Incentivized adoption
Central identity broker No transaction data stored centrally
Full secrecy out of the box
Obfuscation protocols on top of open
standard to achieve privacy
Fully dark protocol; no noisy, or
malicious state power can get access
Tumbling
Separate settlement layer
Community out reach efffective
Interopperability
Consensus withstands challenge

Industry Segments
“When the technology
becomes available, you
have to embrace it.”
Nader Naeimi, AMP Capital
Investors
"The use of this
technology will permit
fintechs and other
financial actors to offer
new solutions for
exchanging securities,
solutions that are
faster, cheaper, more
transparent and more
secure," Finance Minister
Bruno Le Maire
1: Trading
December 7, 2017
ASX Ltd. will start using blockchain -- to process
equity transactions.
January 19, 2017
Mercuria introduces blockchain to oil trade with ING,
SocGen
Digital Asset Holdings technology
December 8, 2017
France to allow blockchain for trading unlisted
securities
Hyperledger
November 17, 2017
Over 20 Banks Join Singapore-Hong Kong Blockchain
Trade Network
November 6, 2017
BP, Shell lead plan for blockchain-based platform for
energy trading
Undisclosed
To be determined
To be determined
A
B
C
D
E
56
Commodities Trade
ToolsLive Production Use Cases

A
B
“ By using this
blockchain-enabled
platform, clients are
able to benefit from
the extended
ecosystem that
trade finance brings,
but with a reduction
in friction and cost
and an improvement
in speed and
transparency.” Marilyn
Blattner-Hoyle AIG’s head
of supply chain and trade
finance
1: Logistics
October 04, 2017
New collaboration on trade finance platform built on
blockchain Batavia, CaixaBank, Commerzbank and Erste
Group
September, 2016
Barclays and Wave become first to execute global
trade using blockchain technology.
Wave
C
October 06, 2017
AIG partners with TradeIX, Standard Chartered for
blockchain-enabled trade finance transaction
D
Hyperledger
October 18, 2017
CGI integrates blockchain with conventional trade finance
platform Bank of Montreal, Royal Bank of Canada and
MUFG
October 25, 2017
Hong Kong, Singapore to link up trade finance
blockchain platforms
Not disclosed
Not disclosed
Bespoke Ledger
2: Insurance
3: Financing
E
57
Trade Finance
Industry Segments Live Production Use Cases Tools

B
"It was painfully
obvious to me that
the blockchain could
be used to track
objects, and of
course one of the
largest pain points
that runs through
the supply chain is
provenance,"
Everledger CEO Leanne
Kemp
1: Logistics
September 8, 2017
Blockchain at Walmart: Tracking Food from Farm to
Fork
August 22, 2017
IBM Forges Blockchain Collaboration With Nestlé &
Walmart In Global Food Safety
C
D
December 4, 2017
De Beers to invest in blockchain-based diamond
platform
58
Hyperledger
Hyperledger
Hyperledger
A
August 1, 2015
Everledger Brings Blockchain Tech to Fight Against
Diamond Theft
Hyperledger
Provenance

B
"This is
transformational for
identity. It makes it
easier for me to
prove it's me and
harder for the 'bad
guy' to masquerade
as me.“
Greg Wolfond, CEO of
SecureKey
1: Logistics
November 15, 2017
SecureKey Taps IBM Blockchain for Digital Identity
System Launch
October 11, 2017
National Bank of Canada joins SecureKey digital
identity network
C
D
October 11, 2017
IBM, Hyperledger Join Blockchain Identity Consortium
59
Hyperledger
Hyperledger
Hyperledger
A
May 4, 2017
U.S. credit agencies test Canadian blockchain
identity network
Hyperledger
Identity

B
“To send a £1000
through the Barclay's to
a non-EEA country, the
total will be £1040 +
receiver fee, plus £20
they charge for
tracking. Plus
anadditional £7 fee for
paperwork. A trans-
Atlantic transaction
took almost a week and
required the receiver to
visit the bank branch to
prove his identity.
The same payment in
BTC with Cryptopay
results in 0.0005 BTC
(£0.89) fee and would
be delivered in an hour
or three.”
1: Remittance
August 30, 2017
UAE Remittance Giant Taps Ripple Blockchain for
Instant International Payments
July 31 2017
SBI Reveals Joint Blockchain Remittance Venture With
South Korean Startup
C
D
May 25, 2017
Everex Announces Mobile Blockchain-Powered
Microfinance and Fiat Transfer Platform
60
Hyperledger
Coinplug
Ripple
A
November 23, 2016
Over 100 Migrant Workers Test Blockchain Remittance
in Thailand
EVEREX / CryptoCash
Banking Services

61
Counterfeit drug
market annually
$200 billion
Most counterfeit
drugs manufactured
India or China
Internet sales of
counterfeit drugs
$75 billion
Counterfeit drugs in
some countries
up to 50%
Dying people per year
in Africa
120,000
Deep Dive – Counterfeit Pharmaceuticals

62
Date of
Production
Commissioning
Trucking
Leg
Factory Truck
Port
Services
Milan, Italy
Shipping
Vessel
Maersk
Port
Services
Abidjan, CI
Trucking leg
Owner
Operated
Bus
Owner
Operated
Date of
consumption
Decommissioning
EU Hub
National
Hub
Commissioning
Requires Authentication
Verification &
Decommissioning
Requires Authentication
No blockchain, no distributed ledger
Optional
Pharma Serialization, EMVO – Counterfeit Pharmaceuticals
Mandatory Mandatory

Why Blockchain – Counterfeit Pharmaceuticals
63
Incentivizing desired
behaviour
The smart contract execution
and crypto currency aspects
of the blockchain can be used
to steer behaviours through
loyalty
Immutable Trust
Proof of identity, and business
identity, as well as the ability
to quickly add new members
to the supply chain would not
be possible with legacy
architecture
Tracking & Feedback
The smart contract
execution allows for a
full visibility at every
stage of the product
supply chain
Three Key Advantages of
Distributed Architecture for Serialization
Legacy architecture
for the same build
becomes cost
prohibitive due to
security and
authorizations
Increases trust and
differentiates the
manufacturer
Incentivizing
the adoption of
the membership
in clear fungible
currency.

64
Deep Dive – Currency Remittance

TRADING DES
CRYPTO-MONNAIES
LA FIN DU FAR-WEST

Exchanges • 10’500
• Plus grand?
❖ Binance
• Volume Trading journalier?
❖ $3 Milliards
• Profit (Q1) 2018
❖ $200 millions
• Deutsche Bank
❖ $146M
❖ 100.000 employés
• Binance
❖ 200 Employés
Source: CoinMarketCap.com – 30.04.2018

Mt Gox
2010 à 2014
70%
850.000 BTC
$450 Millions / $8 Milliards

La liste est
longue…
• Bitfloor
❖ 2012
❖ 2400 BTC
• Poloniex
❖ 2014
❖ 12%
• Bitstamp
❖ 2015
❖ 19’000 BTC
• Bitfinex
❖ 2016
❖ 120.000 BTC

Des règles à
respecter
• Sécurité
• Identification des clients (KYC)
• Loi sur le Blanchiment d’Argent
(LBA/AML)
• Protection des données (GDPR)

Europe’s Premier Digital Asset Exchange
Centralisés Décentralisés

Guide pratique :
Initial Coin Offerings (ICOs)
dans le canton de Genève
Genève, le 03.05.2018
Département de la sécurité et de l’économie (DSE)
Direction générale du développement économique, de la recherche et de l'innovation

Sommaire
1. Introduction
2. Guide de l’Etat de Genève
1. Traitement fiscal
2. Qualification
3. Annuaire

2017 : La Suisse en tête des ICOs

Janvier 2018 : «nation crypto»
Le ministre suisse
de l'économie
Johann Schneider-
Ammann déclare
lors d'une
conférence que la
Suisse veut être la
"nation crypto".

Février 2018 : Guide de la FINMA
La FINMA publie
un guide pratique
sur les ICO qui
identifie 3
catégories de
jetons :
paiement, utilité et
investissement.

Mars 2018 : Blockchain taskforce
La blockchain
taskforce
composée d’un
groupe d'environ
50 personnalités
de la politique, de
l'économie et de la
science remet ses
recommandations.

Mai 2018 : Guide de l’Etat de Genève
L’Etat de Genève
publie son guide
pratique pour faire
une ICO.

Position de l’AFCGE
• A l’heure actuelle, les ressources financières reçues en
échange de tokens émis sont constitutives d’un produit
imposable, quel que soit la nature du jetons.
• Dans la mesure ou il existe un engagement formel à
allouer les ressources financières à la R&D, une
provision est admise selon une durée à déterminée.
• Les jetons d’investissement ou hybrides devront faire
l’objet d’une analyse spécifique en amont.
• Un ruling fiscal liant juridiquement l’AFCGE et la société
émettrice peut-être obtenu : www.ge.ch/ruling

Grille de qualification
1. L’équipe et son écosystème
2. Les aspects technologiques
3. Le concept et le business plan
4. Les aspects juridiques
5. Le processus d’onboarding
6. La stratégie marketing et relations publiques
7. Le calendrier

Procédure de qualification
1. Demandes par email : dgderi@etat.ge.ch
2. Qualification avec :
– Accompagnement pour l’implantation à Genève
– Mises en relations éventuelles avec les acteurs de l’écosystème
genevois
– Possibilité de qualification par un comité d’experts publics et privés
L’Etat de Genève ne traite les demandes que sous l’angle du
développement économique et n’émet aucun avis sur les ICO. Les
acteurs du marché sont les seuls responsables de l’évaluation et du
respect des lois.

Annuaire de l’écosystème genevois
1. Banques
2. Avocats
3. Compliance
4. Technologie
5. Marketing et relations publiques
6. Académiques
7. Incubateurs
Pour être référencé : dgderi@etat.ge.ch

Q&A
Vincent Pignon
Vincent.pignon@etat.ge.ch
Département de la sécurité et de l’économie (DSE)
Direction générale du développement économique, de la recherche et de l'innovation

Connected Event - Blockchain 3 05 2018

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