information memorandum devere aggressive digital asset fund sp · management fee 2% performance fee...

Information Memorandum – deVere Aggressive

Digital Asset Fund SPOpportunity to invest in a Digital Currency Fund

March 2018

1 Offering Overview

deVere Adventurous Digital Asset Fund SP 3

About the Fund

deVere Adventurous Digital Asset Fund SP is an actively managed cryptocurrency fund aimed at professional investors

To be the best performing investment fund in

the Digital Currency space

OUR MISSION

To deliver capital appreciation over a long term

horizon through actively managing a portfolio

of Digital Currencies

OUR INVESTMENT OBJECTIVE

The Fund will invest in a diversified portfolio of

digital assets via algorithmic trading over AI

platforms, utilizing a long only quantitative

trend following approach

OUR INVESTMENT STRATEGY


deVere Adventurous Digital Asset Fund SP Terms

KEY FACTSFUND STRUCTURE

Fund Name deVere Alternative Investments SPC Ltd.

Sub-fund Name deVere Adventurous Digital Asset Fund

Domicile Cayman Islands

Type of shares Accumulator

Base Currency USD

Minimum Initial

Subscription $100,000

Investment

Objective

To achieve long-term capital growth primarily

through a long only quantitative trend following

approach investing in a diversified portfolio of

digital currencies

Portfolio limits Up to 100% - Digital Currency

Dealing Monthly

Entry Fees 5%

Exit Fees 1%

Management

fee2%

Performance

fee20%

Hurdle Rate None

Dalma Capital

Management Limited

Investment Manager

Grant Thornton

Cayman Islands

Fund Auditors

Wyzer Ltd.

Strategy Advisor

Apex Fund Services

(Dubai) Ltd.

Administrator

Walkers LLP(matters of Cayman Islands

law only)

Legal Advisers Bankers

Interactive Brokers UK

Prime Broker 1

Exante, Malta

Prime Broker 2

Investors

deVere Alternative

Investments SPC Ltd

deVere Diversified

Digital Asset FundSP 1

deVere Moderately

Adventurous

Digital Asset Fund

SP 2

deVere

Adventurous

Digital Asset Fund

SP 3


Investment Strategy

The Fund will maintain a diversified portfolio of digital assets through investment in digital currencies, ETFs or derivatives

by way of algorithmic trading through AI platforms, utilizing a long only quantitative trend following approach

INVESTMENT STRATEGYQUANTITATIVE TREND FOLLOWING

APPROACH

3

» Primarily, a quantitative trend following approach is

used in managing the fund’s assets

» The Fund also relies on the professional judgment

of its investment manager to make trade decisions

2

» The fund will maintain at least 20% to 100% of the

value of its assets invested in a diversified portfolio

of digital assets

» Asset allocation may periodically be increased or

decreased according to the relative attractiveness of

each digital currency

1

» Fundamental investment philosophy is to obtain

exposure to digital currencies that exhibit:

– Strong momentum and trending characteristics

– Are sufficiently liquid, and

– Allow for low cost investing

1

» Algorithms define guidelines and trading strategies

that determine which crypto currencies and assets

classes to trade -- trading strategies are based on a

combination of trend following and time-series

momentum models

2» Machine learning algorithms efficiently and

intelligently parse through significant volumes of

unstructured data

3» The approach allows recognition of patterns and

correlations that may be difficult for human analysts

or independent investors to discover and action

4

» The models autonomously adapt to changing

circumstances and scenarios – as market volatility

and direction velocity change so do the fund’s

market positions


Risk Management

The Fund has multiple risk management measures in place to minimise the risks arising from the volatile digital currency

market

01Algorithmic trading analyses various risk management metrics with the objective of

containing excess volatility and mitigating drawdowns with respect to underlying assets

02Position limits are capped based on various volatility measures

03AI platform seeks to ensure that target strategic asset allocation is maintained and

optimized through monitoring of market diversification and correlation metrics

04The portfolio routinely goes through a scenario and stress testing process


Technology Overview

deVere’s crypto fund advice system is built on top of a custom developed platform which analyses market data and

suggests rebalancing methods best suited for the current market status

Data Gathering

.

OHLCV Data

The system obtains OHLC data

from a public API (coinapi.io)

Market Cap Data

The system obtains market cap

data from a public website

(coinmarketcap.com)

The system makes use of

various data feeds which are

used by the funds in order to

make rebalancing decisions

The feeds of interest are related

to the prices and market

capitalization of market data

Data Processing

The system supports a number

of arbitrary strategies which it

can use to decide which coins

to trade. They can be custom

built in order to support specific

fund strategies

The platform supports a number

of common technical indicators

which are used to execute

strategies

Every rebalancing time period,

the system determines ratios

which indicate the coins that the

fund will purchase along with

the ratio of funds to be allocated

to each coin

CoinAPI.io Coinmarketcap.com

DB Server Web Server

Crypto Fund

Admin Website

App Server

(Data Collection + Processing)

Investors

The Fund’s crypto fund advice system is split into 2 sections Platform Structure


Sub-Advisory Team

Dr. Abdalla Kablan is an entrepreneur and academic specialising in

machine intelligence, big data analytics and computational Finance.

He is the founder of Scheduit – a business oriented social network

that uses AI and machine learning to match relevant business

professionals with each other. He is also the co-founder and CTO

of Hippo Data.

He has presented and chaired in various international conferences

and published various blind reviewed papers, some of which won

research awards.

He holds a PhD in Computational Finance from University of Essex,

UK.

Dr. Kablan also has an MSc in Financial Engineering and

Knowledge Management from University of Bradford, UK and a

BSc IT degree in Computer Systems Engineering from the

University of Malta.

Dr. Abdalla Kablan

Digital Currency Advisor

Joseph Portelli has over 36 years’ experience employed in various

capacities within the financial industry in the U.S and in Malta.

He has vast experience as a portfolio manager, currency and

commodity trader and has been employed with BoA, Nomura

Securities, Goldman Sachs, Millburn Ridgefield, Global Capital, and

Liongate Capital Management.

His most recent position was chief investment officer and managing

director of FMG Funds.

He is currently Chairman of the Malta Stock Exchange and sits on

its Audit Committee. He is also the founder and Chairman of

Financial Services Gozo.

Joseph founded the Institute of Investment Analysis and was also a

visiting lecturer at the University of Malta, and has taught courses at

the Central Bank of Malta, Malta Institute of Accounting and other

institutions.

Joseph graduated with a BA from Baruch College, City University of

New York.

Joseph Portelli

Asset Allocation Advisor

2 What are

Cryptocurrencies?


Cryptocurrencies are set to Revolutionize Financial

Transactions…

Cryptocurrency is an encrypted and decentralized digital medium of exchange that has eliminated the need of

intermediaries such as banks & financial institutions for facilitating and verifying financial transactions

KEY FACTSWHAT is it?

Produced by Technical System

based on cryptographic algorithmIssued by Government

High Cross Border PortabilityLow Cross Border Portability

Controlled Supply; dictated by

coded schedule

Unlimited Supply; Government

can produce as needed

Decentralized no central control,

no central point of failure

Centralized: controlled &

regulated by government

Value is determined by

Demand & Supply

Value determined by the Demand,

Supply & Govt. Regulation

CRYPTOCURRENCYTRADITIONAL CURRENCY» Launched in 2009, BITCOIN was the first cryptocurrency, currently

there are ~1,500 CRYPTOCURRENCIES WORLDWIDE

» Cryptocurrencies use a mechanism called BLOCKCHAIN – which

is a public ledger of all transactions across P2P network that is

TRUSTED, SECURED & SHARED

» Total Market Cap of all Cryptocurrencies: ~$432Bn(1)

(on Feb 25th, 2018)

» Total No. of transactions processed: ~300Mn(3)

(till Feb 25th, 2018)

» As of Feb 2018, there are 2,393 Bitcoin ATMs(4) worldwide

» Transactions processed per day: 145K(3)

(on Feb 25th, 2018)

» Employs ~1,876(2) people full-time in the cryptocurrency space

Sources: (1) Coinmarketcap; (2) Global Cryptocurrency Benchmarking Study by Cambridge Centre for Alternative Finance as of April 2017; (3) Blockchain.info; (4) coinatmradar.com

$


..And Have Gained Wide Acceptance due to their Unique

Features

Cryptocurrencies are designed such that they are encrypted, controlled by code, rely on P2P networks, and have

immutable transaction history – features that have attracted investor attention in the financial industry

PSEUDONYMOUS

In crypto market, owner’s identification is stored

in an encrypted address controlled by them– it is

not typically attached to a person’s identity1

DECENTRALISED

Currency supply and value is controlled by the

activities of users and highly complex protocols

built into the currency codes rather than any banks

or other regulatory authorities

IRREVERSIBLE

Digital currency transaction cannot be reversed

after a transaction has been confirmed

FAST AND GLOBAL

Transactions are propagated nearly

instantly in the network and are

typically confirmed in a couple of

minutes2

SECURE

The funds are stored in a public key

cryptography system accessible by

only the owner of the private key

CONTROLLED SUPPLY

A cryptocurrency’s supply is controlled by a

schedule written in the code, allowing estimation of

supply at any point in the future

Note: (1) The development of digital identities could reduce anonymity in the future;

(2) Confirmation times can be delayed due to high market volume, mempool overload or low transaction fees offered


Blockchain – The Technology behind Cryptocurrencies

Blockchain is an open distributed ledger that can record transactions between two parties efficiently and in a verifiable

and permanent way; It has potential to disrupt a wide variety of transactions processing systems

Transaction Requested

» Users with wallets request transactions

» Wallets are files with access to multiple

bitcoin addresses that are in the form of

alphanumeric characters

Authentication

» The network of nodes operated by

miners validate the transaction using

cryptographic hash functions

New Transaction Block

» Miners bundle transactions within a

fixed time interval into new blocks. E.g..

in the case of Bitcoin past 10 min

transactions are bundled into one block

Verified Transaction

» Verified transaction can involve

cryptocurrency, contracts, records, or

other information

✓

✓✓

✓

Blockchain – is a public ledger of all transactions across a P2P network that no individual or company owns or controls. Primary Benefits:

WHAT IS IT? 1. Immutability

2. Elimination of Intermediaries

3. Ease in verification of transactions

4. Improved security

5. Transparency with lower costs

6. Decentralization

HOW IT

WORKS ?

Addition to Blockchain

» The new block is then added to the

existing blockchain

» For addition of each new block a miner

is currently rewarded 12.5 Bitcoins1

Transaction Complete

» Once the new block is added to the

Blockchain the transaction is complete

✓

Note: (1) Bitcoin Block Reward set to halve in 2020


From its Launch in 2009, Cryptocurrency Market has

Evolved Considerably

The speed of development and adoption of cryptocurrency technology has been phenomenal, dispelling concerns over

its legitimacy and at the same time facilitating the sector’s emergence into the mainstream

Jan-2009:

Very first Bitcoin

transaction

between Satoshi

and Hal Finney,

a developer and

cryptographic

activist

Mar-2013:

Bitcoin market

capitalization

reaches $1Bn

Aug-2015:

Barclays

announces that

they would

become the first

UK high street

bank to start

accepting bitcoin

Jan-2011:

Silkroad, the

infamous drugs

marketplace

begins operating

Apr-2014:

The first ICO

was held by

Karmacoin for

Karmashares

project

Feb-2010:

First real world

bitcoin

transaction takes

place when a

programmer

pays 10,000

Bitcoins for a

pizza worth $25

Apr-2017

Bitcoin 24hr volume

rises over $1Bn as

Japan, Russia move

to legitimize

cryptocurrency

Oct-2008:

A

pseudonymous

figure or group

called Satoshi

Nakamoto

publishes the

Bitcoin white

paper

Jun-2012:

Coinbase, a

bitcoin wallet and

platform, is

founded in San

Francisco,

California

Oct-2009:

First Bitcoin

Exchange New

Liberty Standard

launched, with

an initial

exchange rate of

1,309.03 BTC to

$1

Jul-2010:

The MtGox

Bitcoin currency

exchange market

is established

Feb-2011:

Bitcoin reaches

parity with US

dollar

Jun-2011:

WikiLeaks

begins accepting

anonymous

Bitcoin donations

Nov-2012:

Wordpress

accepts bitcoin

Apr-2013:

Bitcoin price

reaches $100

Oct-2013:

FBI shuts down

Silkroad

Nov-2013:

Bitcoin price

reaches $1000

Jul-2014:

Founded by

Vitalik Buterin

Ethereum

Foundation

raises around

31,500 Bitcoin

through pre sale

of 60Mn ETH

Dec-2014:

Microsoft begins

to accept Bitcoin

Mar-2017

30 banks, tech giants,

and other

organizations—

including JP Morgan

Chase, Microsoft, and

Intel form Enterprise

Ethereum Alliance

Nov-2010:

Bitcoin Market

Cap crosses

$1Mn mark

2009 2010 2011 2012 2013 2014 2016 2017

No

tab

le C

oin

Lau

nch

es

BTC LTC DASHXRP

2015

ETHXMR BCH

2008

Dec-2017

Bitcoin futures

launched on CBOE

and CME Group

markets post which

Bitcoin prices reaches

$19,000

IOTANEO

Feb-2018

Venezuela

launches first

govt-backed

cryptocurrency

‘Petro’

2018

ADAXLM EOS


Cryptocurrency Regulatory Landscape

Large scale adoption of cryptocurrencies and blockchain technology is forcing countries worldwide to do away with their

restrictive stance and draw up regulations allowing trade and use of cryptocurrencies

Global Cryptocurrency Standpoint1

D

A C

B

E

Unknown: 126

Permissive: 57

Contentious: 8

Hostile: 4

# of Countries by Stance

Sources: Bitlegal.io

Notes: Global Cryptocurrency Standpoint as of Feb 25, 2018

European Union

» In Jun 2017, EU changed laws regulating

cryptocurrencies, allowing only KYC approved

users to transact and hold cryptocurrencies

» Jan’18 - Decided on new rules to decrease

anonymity and more traceability through

customer identification and strong due diligence

E

» 2015 - The Commodity Futures Trading

Commission classified bitcoin as a commodity

» IRS considers virtual currency as property for

federal taxation

» 2017 - SEC ruled that ICOs and Token Sales are

Sale of Securities & participants will be subject to

federal securities law

United States of AmericaA

India

» A formulation committee to work on the

landscape of cryptocurrency policy was formed in

Dec 2017

B

China

» China banned ICOs in Sep 2017 and has

blocked all access to online platforms for

cryptocurrency exchange in order to regulate the

financial market from scams & risks

C

» In Apr 2017 Japan recognized cryptocurrencies

including Bitcoin as a legal method of payment &

not a legally-recognized currency

» For tax purposes Bitcoin is treated as an asset

» Exchanges will be subject to - capital

requirements, cybersecurity & operational

stipulations, AML & KYC requirements, audits etc.

JapanD

3Overview of the

Cryptocurrency

Market


Crypto Market Cap Reached $432Bn, Representing a

25x Growth since Jan’17

Driven by strong positive sentiment around Cryptocurrencies, market capitalization crossed $500Bn mark in Dec’17 post

which the market saw a slight correction in Feb’18

Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Feb-17 Jul-17 Dec-17

Bitcoin Other Cryptocurrencies

$3.4

Bn

$0.8

Bn

$165.3Bn

Total Market Cap No. of Currencies

$266.6Bn

Since Jan 2015 the

no. of

cryptocurrencies in

the market has

grown >3x from 494

in the beginning of the

period to 1491 as on

Feb 25th, 2018

Cryptocurrency Market Capitalization

3 Year Growth

2 Year Growth

Y-o-Y Growth

1335 1491494

$4Bn

544

$4Bn

565

$8Bn

686

$21Bn

981

$89Bn $573Bn $432Bn

49x

25x

9x

383x

219x

92x

105x

56x

20x

Growth (2)

Sources: Coinmarketcap

Note: (1) All data as of Feb 25, 2018 , (2) Growth Y-o-Y: Feb’17 – Feb’18, 2 year growth: Feb’16 – Feb’18, 3 year growth: Feb’15-Feb’18

Feb-18

539

$6Bn

637

$12Bn


Driven by Rising Popularity & Adoption of Cryptocurrencies

Leading cryptocurrencies have garnered significant interest from individuals and institutions alike, a fact validated by increasing

number of transactions, unique addresses, wallets & active users of these wallets

(1) Data as of Feb 25, 2018

Sources: (2) “Global Cryptocurrency Benchmarking Study” by Cambridge Center for Alternative Finance; (3) “Bitcoin: Ringing The Bell for a New Asset Class” by Ark Invest and Coinbase; Blockchain.info,

Etherscam.io

3k

8,873k

Jan-09 Jul-10 Jan-12 Jul-13 Jan-15 Jul-16 Jan-18

9k

20,080k

Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18

Transactions per Month (000’s)(1)

Total Cryptocurrency

Wallets (2016)

34.3Mn(2)

Unique Active

Cryptocurrency

Wallet Users (2016)

2.9 - 5.8Mn(2)

Active

Cryptocurrency

Wallets (2016)

5.8 - 11.5Mn(2)

1324%

Eth

ere

um

Bit

co

in

Holders of Bitcoin as

of Dec, 2016

10Mn(3)

Y-o-Y Growth

9k

27,479k

Jul-15 Dec-15 May-16 Oct-16 Mar-17 Aug-17 Jan-18

Unique Addresses Growth (000’s) (1)

3k

364,595k

Jan-09 Jul-10 Jan-12 Jul-13 Jan-15 Jul-16 Jan-18

2418%Y-o-Y Growth

50%

2 Y

ea

r G

row

th

222%

2 Y

ea

r G

row

th


There are ~1,500 Cryptocurrencies Circulating Worldwide

Currently

Note: Price, Current Market Cap and 24-hr Volume as of Feb 25, 2018

Launch Dates: (1) Bitcoin Cash: Jul 23, 2017; (2) Cardano: Oct 2, 2017; (3) IOTA: Jun 13, 2017; (4) EOS: Jul 4, 2017

As of Feb 25, 2018 the top 12 cryptocurrencies represented ~83% of the total Cryptocurrency Market Capitalization with Bitcoin

(oldest cryptocurrency) alone accounting for ~38% followed by Ethereum with ~19% market capitalization

Founded Year: 2009

Price: $9,664.7 (∆ y-o-y 8x)

Current Market Cap: $165,407Mn

24-hr Volume: $5,706Mn

Founded Year: 2014

Price: $281.02 (∆ y-o-y 24x)


24-hr Volume: $34Mn

Founded Year: 2011

Price: $220.5 (∆ y-o-y 58x)


24-hr Volume: $1,028Mn

Founded Year: 2015

Price: $844.8 (∆ y-o-y 62x)


24-hr Volume: $ 1,646 Mn

Founded Year: 2012

Price: $0.94(∆ y-o-y 167x)


24-hr Volume: $360Mn

Founded Year: 2017

Price: $1.82 (∆ since launch(3) 3x)



Dec’14$8.5Bn$4.9Bn

Founded Year: 2014

Price: $591.7 (∆ y-o-y 22x)


24-hr Volume: $71Mn

Founded Year: 2016

Price: $118.5 (∆ y-o-y 1034x)



Founded Year: 2017

Price: $1,178.1 (∆ since launch(1) 3x)



Founded Year: 2017

Price: $0.34 (∆ since launch(2) 17x)



Founded Year: 2014

Price: $0.36 (∆ y-o-y 190x)


24-hr Volume: $42Mn

Founded Year: 2017

Price: $7.9 (∆ since launch(4) 2x )



3 Bitcoin Emerging as

a New Asset Class


Bitcoin has Delivered Exceptional Absolute Returns vis-à-vis

Other Asset Classes

Cryptocurrencies provide a highly lucrative investment avenue to investors with returns significantly higher than

conventional high yield asset classes

1 Year

Return

Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18

Growth of Assumed $10,000 Investment in Major Asset Classes from Mar-17 to Feb-18

Historical Returns Bitcoin vs. Major Asset Classes (1)

8.2x

1.3x

1.2x

1.0x

1.2x

1.1x

Bitcoin US Equities Emerging Market Equities U.S. Bonds Oil Gold

All data as of Feb 25, 2018

Note: (1) S&P 500 has been taken as proxy for US Equities, Bovespa for Emerging Market Equities, iShares Barclays Aggregate Bond ETF (AGG) for US Bonds.

Sources: Coinmarketcap, investing.com

10k

164k

83k

22.77x

40.70x

17.94x

1.41x 1.30x 1.49x2.08x

1.68x 1.87x

0.97x 0.96x 0.99x

1.92x

1.250.62

1.07x 1.11x 0.99x

2 Year Return 3 Year Return 4 Year Return

Bitcoin US Equities Emerging Market Equities US Bonds Oil Gold


Also Provides Substantial Portfolio Diversification Benefit

By virtue of low correlation with major asset classes, Bitcoin has the potential to balance the risk of a portfolio; based on

last 2 year data, Bitcoin’s average 6 month rolling correlation with other asset classes is less than 0.6

Correlation (1) : Bitcoin vs. Major Asset Classes (2)

0.57

0.09

0.340.42

0.28

U.S.Equities

U.S. FixedIncome

Gold Oil Bitcoin

Emerging Market Equities

0.57

0.05

0.16

0.32

0.58

EmergingMarketEquities

US FixedIncome

Gold Oil Bitcoin

US Equities

0.05 0.09

0.74

-0.190.11

USEquities


Gold Oil Bitcoin

US Fixed Income

0.320.42

-0.19

-0.05

0.19

USEquities


US FixedIncome

Gold Bitcoin

Oil

0.160.34

0.74

-0.05

0.17

US Equities EmergingMarketEquities

US FixedIncome

Oil Bitcoin

Gold


Note: (1) Correlation has been calculated on a 6-month rolling basis over a period of 2 years, (2) S&P 500 has been taken as proxy for US Equities, Bovespa for Emerging Market Equities, iShares Barclays

Aggregate Bond ETF (AGG) for US Bonds; Sources: Coinmarketcap, investing.com


8.8%

1.4%2.9%

0.4%

3.9%

1.8%

8.6%

1.4%2.8%

0.4%

4.2%

1.8%

9.7%

1.1%2.6%

0.4%

3.9%

1.7%

13.8%

1.0%2.2%

0.4%

3.5%

1.5%

Bitcoin US Equities Emerging MarketEquities

US Bonds Oil Gold

Last 4 Years Last 3 Years Last 2 Years One Year

Volatility of Weekly Returns Bitcoin vs. Major Asset Classes (%) (1) (2)

Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17

30-Day BTC/USD Volatility 60-Day BTC/USD Volatility

The decline in bitcoin’s volatility has been a result of:

» More stable and liquid spot exchanges

» Greater regulatory clarity

» Broader ownership

» Increasingly reliable price discovery data.

Bitcoin’s Volatility, although decreasing, is still high

compared to other assets

The Fund’s strategy enables its trading team to benefit directly from this volatility and potentially generate Alpha during

turbulent price movements

Bitcoin Price Volatility (%)


Note: (1) Weekly volatility has been calculated on a 4-week rolling basis and averaged over respective time periods. (2) S&P 500 has been taken as proxy for US Equities, Bovespa for Emerging Market

Equities, iShares Barclays Aggregate Bond ETF (AGG) for US Bonds; Sources: Coinmarketcap, investing.com

13%

7%


2.40

1.421.51

-1.12

0.68

0.45

2.18

1.75 1.77

-0.70

1.21

0.34

1.94

0.760.86

-0.50

0.380.27

1.26

0.880.75

-0.18 -0.20

0.05

Bitcoin US Equities Emerging Market Equities US Bonds Oil Gold

1 Year 2 Year 3 Year 4 Year

However it still Offers Superior Risk Adjusted Returns

Bitcoin’s high volatility has been compensated by even higher returns resulting in superior return per unit of volatility (as

expressed by Sharpe Ratio) when compared to other asset classes

Sharpe Ratio: Bitcoin vs. Other Asset Classes(1) (2)


Note: (1)Sharpe ratio calculated using weekly data and the 3 month US T-Bill as the risk-free rate of return (2) S&P 500 has been taken as proxy for US Equities, Bovespa for Emerging Market Equities,

iShares Barclays Aggregate Bond ETF (AGG) for US Bonds.

4 Road Ahead for

Cryptocurrencies


Cryptocurrencies have a Range of Possible Future

Scenarios

Adoption across industries and geographies is the key factor that will determine the future of cryptocurrencies. It would

be interesting to see whether cryptocurrencies revolutionizes industries and interaction systems globally or fizzles out

Probable Future Scenarios

» Cryptocurrencies fail to

generate mass adoption as

technology acts as a

handicap and is unable to

garner public trust

» Used only by enthusiasts

and technology evangelists

» Strict regulations that

reduces the scope of use

» Used by organizations for

B2B and institutional

transactions

» Regulations squeeze out

prospects for use as currency

» Blockchain by virtue of its

numerous use cases is

adopted across industries for

maintaining records &

supplementing automated

decision making systems

» Becomes the de facto standard

for all financial transactions

(payments, accounts, securities)

» Kills message based systems &

undermines central banks

» Becomes the “global anchor”

currency

» Need for a borderless

currency drives mass

adoption across the globe

» Concept of decentralized

currency outgrows

Blockchain and is processed

on traditional systems

1 2 3 4 5

Grows into a fad

Remains a niche

payment Instrument

Blockchain technology

adopted; currencies

discarded

Currencies adopted;

blockchain technology

discarded

Revolutionizes the

interaction systems and

value exchange

instruments across the

globe

Notable Currencies The Game Changer

?


Residential

ApartmentsWorkplace Supermarket Bank Logistics Services Manufacturing

Power

GenerationHealthcare

»Automated rent collection and tax payments

»Smart contracts could ensure maintenance & new contracts are awarded to companies with requisite experience

»Efficient maintenance, accessibility & validation of HR records

»Smart contracts will allow productivity based remuneration structures & salary remittance for micro periods

»Elimination of the counterfeit market via supply chain tracking

»Smart contracts could promote localized consumption through use of differential pricing, thereby reducing carbon emissions

»Replace message based communication resulting in shorter settlement time

»Transform records maintenance systems, improve efficiency & reduce admin costs

»Ease out cross border remittance process

»Increased product transparency across supply chain

»Automated management of inventory, raw materials, invoice generation & settlement, resulting in increased efficiency

»Help providers to predict requirements, identify & solve problem cases based on user interaction patterns on the block chain

»Allow consumers to automate regular requirements or set conditions that automatically trigger requests

»Supply chain tracking to allow improved control over product quality

»Post production & sale tracking to help manufacturers get insights on usage patterns, allowing them to modify product design to suit different sets of customers

»Facilitate P2P energy trading, reducing transmission losses

»Increase efficiency of existing processes, “smart grid” management systems that automatically diagnose network emergencies & reconfigure them

»Smart contracts can ensure that appropriate parties are notified of noncompliant events in real time

»Help patients determine out-of-pocket costs before they select providers or undergo treatments

Government Regulations would play a major role on the speed of blockchain and cryptocurrency adoption; In recent years a growing number of countries have

realized that limited regulation of the use of cryptocurrencies is beneficial in the long run over extreme bans on its use

A Cryptocurrency’s Success would be Determined by the

Number of Use Cases its Blockchain supports

Cryptocurrency utility and value is directly proportional to an increase Blockchain usage; Given its innumerable use

cases, blockchain technology shows huge promise in replacing the current legacy systems

5 Appendix: Currency

Profiles


Currency Snapshot - Bitcoin

$21 $46 $14 $45 $46$139

$99

$860

$12,136

$5,707$754 $640 $320 $263 $431$673

$964

$2,481

$13,170

$9,790

31-Dec-13 30-Jun-14 31-Dec-14 30-Jun-16 31-Dec-15 30-Jun-16 31-Dec-16 30-Jun-17 31-Dec-17 25-Feb-18

Volume ($Mn) Market Cap ($Bn) Price ($)

» Date of Launch: 2009

» Founder(s): Satoshi Nakamoto

» Use Case: Peer-to-peer electronic cash

system

» Forked From: Written From Scratch

» Consensus Mechanism: Proof-of-Work

Historical Price ($), Volume 24hr.($Mn) and Market Capitalization ($Bn) Key Facts

Transaction

Time (s)

600

Block

Reward

12.5

Max Coins

21Mn

Transactions

per day

206k

Sources: Coinmarketcap, cryptocompare.cc, blockchain.info

9.3 41.77.8 4.2 3.7 6.4 10.1 15.4 229 165


Currency Snapshot - Ethereum

$1 $16 $9

$1,012

$2,554

$1,646

$1 $12 $8

$295

$713

$844

31-Dec-15 30-Jun-16 31-Dec-16 30-Jun-17 31-Dec-17 25-Feb-18



» Founder(s): Vitalik Buterin, Mihai Alisie,

Anthony Di Iorio, and Charles Hoskinson

» Use Case: Decentralized platform for

applications



(to migrate to Proof-of-stake)


Transaction

Time (s)

17

Block

Reward

5

Max Coins

(Every Year)

18Mn

Transactions

per day

73k

Sources: Coinmarketcap, cryptocompare.cc, etherscan.io

0.1 28.21.0 0.7 69 82.5


Currency Snapshot - Ripple

Sources: Coinmarketcap, cryptocompare.cc


» Founder(s): Arthur Britto, David

Schwartz, Ryan Fugger

» Use Case: International payments by

banks and financial institutions




Transaction

Time (s)

4

Block

Reward

NA

Max Coins

100Bn

Transactions

per day

62K

0.2 10.20.0 0.7 0.4 0.2 0.2 81.10.2 37.2

$0.1 $0.0 $0.6 $1.0 $0.4 $1.0 $0.3$67.8

$4642.0

$360.2$0.027 $0.004 $0.024 $0.011 $0.006 $0.007

$0.006 $0.263

$2.100

$0.900

-$0.9

-$0.4

$0.1

$0.6

$1.1

$1.6

$2.1




Currency Snapshot –Bitcoin Cash

Sources: Coinmarketcap, cryptocompare.cc, BitinfoCharts.com


» Founder(s): Satoshi Nakamoto

» Use Case: Peer-to-Peer electronic cash

» Forked From: Bitcoin



Transaction

Time (s)

600 12.5

Max Coins

21Mn

Transactions

per day

33k

- 9.5 7.2 7.5

$0

$298

$151

$344

$1,211$1,300

$363

$346

$576$437

$449

$1,380

$2,377

$1,192

31-Jul-17 31-Aug-17 30-Sep-17 31-Oct-17 30-Nov-17 31-Dec-17 25-Feb-18


23.3 40.1 20.3

Block

Reward


Currency Snapshot - Litecoin

Sources: Coinmarketcap, cryptocompare.cc

$7 $4 $2$15

$3 $3$9

$251

$771

$1029

$24$9 $3 $4 $4 $4 $4

$40

$217 $209




» Founder(s): Charlie Lee

» Use Case: Smaller Faster Transactions

» Forked From: Bitcoin



Transaction

Time (s)

150

Block

Reward

25

Max Coins

84Mn

Transactions

per day

42k

0.6 2.10.3 0.1 0.2 0.2 0.2 0.2 12 11.5


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