To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Introduction “ Obviously a closed platform is a serious brake on innovation.” Sir Tim Berners-Lee, inventor of the World Wide Web Throughout history, many items have been used as The concept is approaching a tipping point in its 5 a store of value, from cowrie shells and clay tablets adoption, according to the World Economic Forum. to coins and today’s ubiquitous paper money. Even VentureScanner.com estimates that there are distributed payment networks have existed for now over 800 new ventures in the global Bitcoin millennia: thousands of years before the advent of ‘ecosystem’, which have collectively raised over $1 6 Bitcoin, the people of South Asia, Africa and the billion in funding. These companies include specialist Persian Gulf were using hawala for peer-to-peer money Bitcoin exchanges, such as Coinbase and Itbit; Bitcoin 1 transfer. ‘miners’, such as Petamine and 21e6, which provide specialist computer hardware for validating Bitcoin As our understanding of money has matured, so transactions; Bitcoin wallet and payments companies, have the methods and modes for exchanging it. The such as EasyWallet.org and CryptoPay; and many other 7 Bitcoin ‘experiment’, which was started by Satoshi infrastructure, news and related services companies. Nakamoto (presumed to be a pseudonym) in 2008, has demonstrated that there can be a viable digital In the FinTech space, the New York-based financial alternative to cash and other mediums of exchange innovation start-up R3CEV has announced that it is 2 in modern society. And although Bitcoin has had a working with over 40 banks to conduct research chequered history, with its association with the dark and experiments with the aim of creating a new net and websites like Silk Road, it has also triggered industry-wide blockchain.8 Separately, Visa Europe, debates about the opportunities that come from the Westpac, the Commonwealth Bank of Australia, blockchain – the technology ‘backbone’ and protocols RBS and many of the UK’s high street banks have all that Bitcoin and other digital currencies use.3 announced that they are working on their own 9,10,11,12 proof-of-concepts using blockchain. Citi According to the Bank of England, a blockchain is claims to have built three blockchains and its own 13 “a technology that allows people who don’t know cryptocurrency, ‘Citicoin’, to test them. And the each other to trust a shared record of events”.4 first patent for a securities settlement system using This shared record, or ledger, is distributed to all cryptocurrencies has been filed by an investment 14 participants in a network who use their computers to bank. validate transactions and thus remove the need for a third party to intermediate. 2