Financial Blockchain Applications will be Measured in the Trillions, says Blythe Masters at Exponential Finance 2015

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Financial Blockchain Applications will be Measured in the Trillions, says Blythe Masters at Exponential Finance 2015

The Singularity University and CNBC are hosting the Exponential Finance 2015 conference n New York, on June 2-3. The conference examines how rapidly accelerating technologies such as artificial intelligence, quantum computing, crowdfunding, digital currencies and robotics are rapidly disrupting businesses throughout the financial industry.

The Singularity University, based at Moffett Federal Airfield in California and sponsored by high-profile high-tech firms including Google, is an educational center dedicated to world-changing applications of disruptive, exponentially accelerating technologies.

The conference program features an impressive set of high-profile speakers including Blythe Masters, the former J.P. Morgan star who now leads Digital Asset Holdings, a technology company that uses distributed digital ledgers to address operational challenges and settlement latency in both digital and mainstream financial assets. Masters’ presentation, titled “Blockchain: The Financial Challenge of Our Time,” has been featured in a CNBC article titled “Why financial firms are investigating bitcoin tech.”

Masters discussed why major financial institutions and their regulators should explore the potential for technologies like the blockchain. She also examined how distributed ledger technologies can help make financial transactions more transparent, efficient and secure with thoughtful protection and collaboration by the industry. A video clip of Masters’ presentation is available online.

According to Masters, the technological innovation behind Bitcoin has the potential to empower the existing financial world, not just disrupt banks out of existence as some have foretold.

“There is a school of libertarian ‘visionaries’ who want to imagine a world without big banks, big governments,” she said in a recent interview. “That’s nice, but completely irrelevant to [Digital Asset Holdings’] business model. We don’t imagine a world in which big banks and big governments don’t exist.”

Masters said at Exponential Finance 2015 that Bitcoin’s underlying technology has the opportunity to improve settlement latency and system security for firms, and, therefore, the market for financial blockchain applications will ultimately be measured in the trillions.

She added that major financial firms have all begun to dedicate a significant amount of time and effort to learning about the technology. Masters’ company Digital Assets Holdings “bridges the gap between the blockchain development world and financial services,” Masters said.

“If you can find a way to bridge the two of them then you have something that is truly revolutionary,” she said in a previous interview.

The Singularity University’s news site Singularity Hub reports that Masters cautions against the hype. The world, she says, is a long way away from economies tabulated on blockchain-enabled disributed ledgers. We need to determine whether they can withstand a concerted attack, can handle transactions on a truly global scale, and can maintain privacy. At the same time, Masters believes that the blockchain may prove incredibly empowering for existing organizations that embrace it. “How seriously should you take this?” she asked. “About as seriously as you should have taken the concept of the Internet in the early 1990s. It’s a big deal.”

The CNBC article lists many other recent examples of how high-profile banks and financial institutions are exploring the financial applications of the blockchain. The list includes Banco Santander, Barclays, UBS, BNY Mellon, IBM, Intel, Overstock, Nasdaq, and the U.S. Federal Reserve, all of which have been featured in recent Bitcoin Magazine articles to show how the technology of the blockchain is gradually winning support in both Wall Street and Capitol Hill.

In the past six months, “everybody realized that bitcoin’s more than a currency,” said Brian Kelly of Brian Kelly Capital. “Everybody had their ‘aha’ moment, and investors with many millions of dollars to spend are starting to see how it can be used.” He added that the financial community was slow to come around to this technology, but they are beginning to embrace it as a cost-saving tool.


Photo courtesy of Exponential Finance

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Moneytis Launches Open Beta of Global Bitcoin Remittance Service

A new consumer remittance startup is on the block, and it’s bringing bitcoin to new corridors in Europe, China and Mexico.

Freshly out of private beta, Moneytis has now opened its beta to the public. The service allows users to send international transfers from their bank accounts to the receiver’s for a fee of two percent or less. The startup uses bitcoin to send the money to its destination, but users would never know because Moneytis keeps it all in the background.

Users first create an account by filling in basic info and bank account credentials. Next, they select the amount and the type in the email address of the recipient. The money is then deducted from the sender’s account and sent to the person receiving the money. In order to access the money, the receiver has to create his or her own Moneytis account. The startup also claims to use an algorithm to test its fee against other providers, and if a cheaper deal is found, Moneytis will redirect to the competitor’s website.

A Bitcoin Backbone

According to Moneytis co-founder, Etienne Tatur, the idea behind Moneytis came to him after having a difficult time sending money to a friend in China. According to Tatur, they had hard time finding out if his bank would do the transfer and then how much it would cost. After figuring it all out and sending the transfer, they were hit by a sudden change in the foreign exchange rate, adding a huge unseen cost.

When the time came to send his money again, the two decided they would use bitcoin, which for them turned out to be more complex, but cheaper. The bitcoin transfer was enough to inspire them to found Moneytis in early 2014 and make a bitcoin-based solutions without the user-experience issues.

Since then, Tatur and his co-founder Christophe Lassuyt have been developing the company’s money-transfer technology and refining its user experience from feedback gathered from the private beta.

“We are thrilled to release publicly our online solution and to see the feedback of our first users,” said Tatur, Moneytis CTO. “Some of them already used the solution to send money to their family and to pay education fees.”

Niche Market

If you added up all the remittance corridors the startup is operational in, it would come to a sum of tens of billions of dollars, according to 2012 data gathered by the World Bank. But the actual potential remittance market for Moneytis is much smaller.

First, it is a pure digital remittance provider, which is a very small section of the market. Estimates vary, but Ismail Ahmed, CEO of digital remittance provider WorldRemit, said digital represented only of 5 percent of total remittance volume. Second, it currently provides only bank-to-bank transfers, which is probably more limiting as it alienates a large amount of remitters who send and receive cash via physical stores and the online remitters who favor quickness.

All things considered, if Moneytis was a remittance provider where the user actually needed to use bitcoin it would be in a much more niche market.

But it’s a start, and already, in terms of number of corridors, Moneytis is among the head of the pack when it comes to bitcoin remittances. In order to grow, the startup is planning to expand beyond bank-to-bank transfers and add more payment options in the future.

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Final BitLicense Rules for New York State Released Today by NYDFS Superintendent Ben Lawsky

New York State Department of Financial Services (NYDFS) Superintendent Benjamin Lawsky today released the final version of the BitLicense regulations, saying that his “gut feeling” was that digital currencies are here to stay.

The BitLicense program to require digital currencies businesses in New York state to operate with a license and report to government has long been in the making and included two revisions with comment periods to allow for public criticism and input.

Many felt that Lawsky had to find a reasonable balance between protecting consumers and allowing digital finance innovators to develop without unnecessary red tape and restrictions.

Lawsky Defends the Need to Regulate

Saying it often “seems like technologists are from Venus and regulators are from Mars,” Lawsky defended the need to “protect consumers” and “root out illicit activities.”

Answering the criticism that anti-money-laundering and fraud regulations already existed, he maintained that digital financial systems are very different from the traditional “disco era” banking system and don’t fit the new reality of fintech.

Changes to Final Version of BitLicense Framework

Lawsky said there were five minor changes to the BitLicense program between the second and third versions:

Companies do not need to report on minor changes in the way they do business, but do need to report on a “material change” such as changing from making wallets to running an exchange.

Companies working on fintech software do not need to report, only companies that are holding other people’s money in trust.

Companies do not have to “cross satisfy” under different programs. If you have a trust charter, you don’t need a BitLicense and vice versa.

Companies reporting suspicious activities to federal authorities do not have to also report to NYDFS.

“Passive investors” joining companies do not have to report or get approval. Only a “control person” will need to report to the regulators.

Lawsky noted that his office received 4,000 comments after the first draft was released but only 35 comments after the second draft was released, so they figured they must be closer to “getting it right.”

Who is covered under the BitLicense program

 Businesses covered include those “controlling, administering or issuing a virtual currency” with the following exemptions:

Blockchain technology for noncurrency purposes
Software developers that aren’t engaged directly in money transmission or exchange
Individual investors
Merchants who accept bitcoin
Licensed banks

Criticisms from the Digital Currencies Community

Many businesses and organizations in the Bitcoin space submitted comments to Lawsky’s office noting that the regulations would create a “bitcoin backwater” as digital currency businesses simply move elsewhere to friendlier jurisdictions.

Organizations such as Coin Center and companies such as Coinbase noted that the BitLicense rules simply added another layer of regulations to laws that already exist at the federal level to cover money laundering and fraud.


In addition, many commented that Lawsky’s rules put too high a financial burden on new startups, requiring them to buy a license and pay for reporting to government.

The Revolving Door

As was reported earlier, the Cato Institute and others have criticized Lawsky for taking advantage of his role in developing the BitLicense rules and then moving to the private sector to offer consultation and advice on these same regulations.

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The Battle for Mobile Cash: An Interview with Bill Barhydt, CEO of Abra

With the current onslaught of bitcoin-related applications and services it’s an interesting time to be a part of the greater digital currency community. The blockchain possesses a seemingly infinite number of use cases, and those who can think creatively and be the first movers in a certain sector are pioneering some of the those brilliant ideas into our everyday lives.

The creation of many of these apps allow for the seamless and frictionless transference of value in a myriad of ways. Abra, founded by its CEO Bill Barhydt, is currently preparing to disrupt the status quo and bring the future of cash to anyone with a mobile device. Bitcoin Magazine recently spoke with Barhydt on his personal history, and gained some intel on the vision of his company’s mobile payment/remittance service, Abra.

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Barhydt is a veteran in the payments technology/mobile industry, and has been working in the field for more than 20 years, going back to his days at Netscape directing business development; working on projects throughout the years in e-commerce, and mobile wallets almost 10 years ago. Barhydt has historically been ahead of his time, and spoke a bit about the company:

“I got the idea for Abra quite a long time ago. The holy grail is to be able to store cash on a smartphone and take it anywhere. I always knew what I had to do in a hyper-connected world. But there were a lot of underlying issues: handset compatibility, cost of bandwidth in developing markets, cost issues. I had an ‘aha’ moment where I realized all the tools were finally available for a global network. This was the impetus.

The tools are all here. But the Bitcoin blockchain is the one essential piece of the puzzle that is finally enabling a service such as Abra to finally exist.

We asked Barhydt what his initial reaction was when learning about bitcoin and the Bitcoin white-paper:

“I was one of the first people to read the white-paper. I’ve been on these mailing lists since back in my ’90s long-hair days. I had been tracking it and staying current. When I saw the link, initially the title grabbed me, and I had done enough work to know anything mentioning ‘decentralized’ is a big deal. People just thought ‘Bill’s off on another one of this tangents.’ I had printed it out and I poured over it late into the night. I knew it was a total game-changer.

Finally having these tools in place, Barhydt knew what he had to do. But what ultimately lead him to come up with the idea for “Abra” and what does he think of the other emerging remittance platforms in the bitcoin industry?

“Don’t look at ‘Abra’ like it’s a remittance platform. Remittance is just a use case. Remittance is more a man-in-the-middle transfer solution. It’s a notable business, yes, but with Abra we’re turning phones into banks. And, because you store from your phone, you can do P2P transfer with anyone without a intermediary.”

This is a great example of how Abra is differentiating itself from the competition that simply wants to aid in the transfer of funds digitally. Barhydt went on to discuss a few more points”

“Once you have a P2P (Peer-to-Peer) model it’s no longer remittance, it’s a P2P transfer banking solution. Eliminating intermediaries makes for a cheaper, more secure and robust system with less middlemen. One of the goals of Abra is make the best money transfer and payment solution in the world, replacing them with a P2P model for moving money around. At some point Abra is going to have the ability to make payments as well. Banks are not at risk from us; we don’t do credit, service loans, not a notary, etc. Our plan is to more so replace cash than banks. PESA in Kenya is a good example of this. The first generation of consumer Bitcoin apps will replace cash-based systems.



Something such as Abra that seeks to use the blockchain to provide more freedom back to the people from a financial standpoint is seen as a positive and is reminiscent of a recent post on Fortune. Using blockchain technology allows for a more distributed financial system that lends power back to the people who need it the most.

The blockchain is great for building next-generation financial applications. But what else is Abra’s system going to do to maintain its major differentiation? Barhydt shared what success looks like in the short term for Abra.

“I want to see Abra Tellers live in dozens of countries in the next year with millions of consumers transacting with each other.

Abra “Tellers” are a pivotal part of Abra’s magic in making money transfer more seamless. The tellers allow for you to add cash, or withdraw from your Abra app by finding the nearest trusted Abra teller and exchanging cash. You can also deposit cash into your account via a debit card.



Barhydt seems assured his short-term goal is achievable. But the long-term goals of an innovational organization such as Abra should always be considered.

We gotta sell it [Abra] to consumers first. An incredible number of technical challenges still await while we continue building Abra. Smart contracts, user experience, building out our trusted-teller networks, actively engaging with regulators to explain how Abra works to gain more approval; its a never-ending process. 

“Tellers are realizing they can make money. There are many pre-registers in multiple countries already. And, there’s no current marketing or PR right now. Abra Tellers can make more money with the same cash they have. Faster is the incentive here. Were creating a positive feedback loop of making money over time. People are getting that, slowly. Time will tell. There exists a chicken and an egg problem we have to solve.

What everyone else in the Bitcoin community will care most about is the execution during the launch of this platform. We all love new features, however. So, we asked if there is anything in the pipeline we can look forward to as they continue to spread to other locations with their new innovative service.

“Payment APIs have been the number one request. ‘When can online merchants and etc. use Abra as a payment vehicle?‘ is a question we get often. We’ll be releasing that in the next few months. There are a bunch of other goodies, too, that we’re not quite ready to announce yet as well.”

Many merchants are obviously very eager to get their hands on a zero percent fee, secure payment system. With so many incentives, it’ll be a huge boon for the overall bitcoin community.

We also asked Barhydt what other initiatives in the Bitcoin space he’s most excited about.

“Exchanges are good, they create the ecosystem. I also read about a company called Streamium, I’m very impressed with them and excited for that use case. There aren’t enough startups solving consumer problems and negative affairs. We designed Abra to rid the consumer of pain. Using bitcoin came second. Nothing was better than using bitcoin.”

A blend of Streamium’s real-time streaming service and Abra’s upcoming payment API would be a positive move for the bitcoin industry. It makes for a sensible combination of complimentary services. Both are great examples of platforms using blockchain technology to empower people.

At the end at the end of our extended discussion, Barhydt shared this food for thought about Abra:

“As a company, we believe in the rights of the consumer and taking a part in commerce with their money. At Abra, we believe the right to the consumer comes before the government. We believe there are bad people out there who will do bad things, and government plays the role of being that intermediary; but that should not be at the expense of human rights. We’re staunch proponents of consumers rights, and we’re engaging with governments and regulators and understanding their perspectives and insights to reduce surprises. Regulators have not been a real issue thus far, with exceptions of that Ripple nonsense. Things are early. We think gaining mindshare and being transparent will eliminate the possibility of pushback.”

Abra is revolutionary: no transfer fees, a secure and private system that is instant and convenient, no foreign exchanges risks or bank account required. It is truly a service built for the people.

This author, personally, is very excited for the future of digital cash.


All images courtesy of Abra.

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