Andreas Park PRO
Professor of Finance at UofT
Andreas Park
Source: "Unlocking the human opportunity: Future-proof skills to move financial services forward"; PwC report for the Toronto Financial Services Alliance, April 2018
relative wage=avg wage in finance/avg rest of economy
Source: Philippon (AER 2015) "Has the U.S. Finance Industry Become Less Efficient?"
Source: Philippon (AER 2015) "Has the U.S. Finance Industry Become Less Efficient?"
Nokia's market shares for devices:
What happened and can it happen to banks?
What did they pay for?
What do people value?
If banks move all data into "the cloud," why do we need banks?
Siloed banks
Cloud computing and cloud storage
Open banking and open data
The past (and the present?)
The present and near future
3-5 years in the future
5-10 years in the future
Platforms?
Banks?
Tech firms?
only the first 1:16 min are relevant
Cryptography: only Sue can spend her money
Problem: double-spending
How can we trust that
Sue wants to send Bob money
Version 1: They use the same bank
Change ledger entry locally
Version 2: They use different banks but the banks have a direct relationship
Sue's bank transfers from Sue's account to Bob's bank's account
Bob's bank transfers from its account to Bob's account
Version 3: They use different banks that have no direct relationship
Sue's bank transfers from Sue's account to its own account
Bob's bank transfers from its account to Bob's account
Central Bank
Central bank transfers from Sue's bank's account to Bob's bank's account
International transfers
Sue's bank transfers from Sue's account to its own account
Bob's bank transfers from its account to Bob's account
use the Swift network of correspondent banks
Crazy thought:
Wouldn't it be nice if there was a single ledger?
Step 1:
send dollars to (say) coinbase using a bank transfer of a credit card
Step 2:
convert dollars to cryptocurrency at
Step 3:
send crypto to blockchain address
0xA69958C146C18C1A015FDFdC85DF20Ee1BB312Bc
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
One more: a stock trade
Sue wants to sell ABX
Bob wants to buy ABX
sell order
buy order
Clearing House
Stock Exchange
Broker
Broker
3rd party tech
custodian
custodian
record beneficial ownership
central bank for payment
Header:
Main part
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
}
}
digitally signed
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
Header:
Main part
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
transaction:
0x4E3996EEae8Bb4BC0f041Fd9ead61e639B29167A
sends 0.002 Ether to
0x91C44E74EbF75bAA81A45dC589443194d2EBa84B
https://anders.com/blockchain/block.html
By Andreas Park
This deck 1/2 for the MFRM Blockchain technology module in finance, taught at the Rotman School of Management, Fall 2019.