What Blockchain technology is and how it's disrupting the financial services sector.

1. TECHNOLOGIES DEMYSTIFIED:
THE POTENTIAL OF
BLOCKCHAIN TECHNOLOGY
F O C U S : F I N A N C I A L S E R V I C E S

2. TABLE OF CONTENTS
2
1. Introduction to Blockchain 3
1.1 Problem and solution
1.2 Transactions today
1.3 The magic behind Blockchain
1.4 Shared ledger technology
1.5 Blockchain-related terms
1.6 Technical description
1.7 Blockchain explained in detail
1.8 Advantages of Blockchain
2. Timeline, Limitations & Application Fields 12
2.1 Timeline
2.2 Limitations
2.3 Application fields
3. Smart Contract Use Cases 16
3.1 Slock.it
3.2 Tallysticks
3.3 Everledger
4. Pioneers Discover Outlook 20
4.1 Future outlook
4.2 Pioneers
4.3 References

3. INTRODUCTION TO BLOCKCHAIN
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4. 4
On the Internet, nobody
knows you‘re a dog…
An intermediary providing trust is
required for every transaction.
Souces: Steiner, 1993; mymerchandservicesblog, 2017;
Today‘s problem The current solution
PROVIDINGTRUSTWITHOUTANINTERMEDIARY

5. 5
IMAGINE YOU WANT TO TRANSFER € 1000
FROM VIENNA TO LOS ANGELES…
With Blockchain‘s shared ledger technology, the same transaction will take eight seconds. It has all the advantages of a simple cash transaction.
Without any intermediary parties, € 1000 will end up in L.A. quickly, securely and transparently.
€1000
€950
Today this transaction would involve at least four intermediary parties and take at least three days. In the end, the recipient in L.A. receives only
around € 950, because of costs associated with different intermediaries like brokers, foreign banks, issuing banks, confirming banks,
correspondent banks, domestic sellers, clearing houses and custodians.
Sources: Terribilini, 2015

6. 6
THE MAGIC BEHIND BLOCKCHAIN
Imagine Leo is sitting in front of you and hands you $100. This transaction isn‘t just fast, secure and transparent. There‘s
also no intermediary and no additional costs are attached. Blockchain technology offers the advantages of a simple cash
transaction like this one, and makes it possible for all different kinds of transactions to occur online, with no limit to financial
transactions! Imagine a world in which you can buy a book without a retailer, sign a contract without a notary and vote for
your favorite political candidate - on your smartphone - with the assurance that your vote is immediately valid and secret.
§ Fast
§ Secure
§ Limited costs
§ Transparent
§ No intermediary

7. WHATISTHESHAREDLEDGER?
Ledger is a record used to store any kind of transaction history,
such as your bank account balance. Since ancient times ledgers
have been used for trading and commerce, specifically to
register, record, transfer and approve contracts, assets,
property and money by intermediaries.
In the past these ledgers were recorded manually on papyrus,
clay tablets and vellum, and moved to paper, bytes and
computers in the last century. Until now that has been the only
improvement…
With Blockchain technology, the first real transformation of
ledgers is coming. For the first time, ledgers will be decentrally
distributed online so everyone can collaboratively create
ledgers and monitor transactions, instead of restricting the
creators to intermediaries like established organizations and
banks.
This will make every transaction far more transparent, secure
and free, as no third party has to be involved. Transactions are
approved by the network, while remaining anonymous.
Souces: Deloitte University Press, Accenture Research
Currently third-party intermediaries are needed for transactions.
The shared ledger could allow direct transactions between
individuals and institutions, as well as micropayments.
Ledger
Custodian Custodian
Clearing House Clearing House
BrokerBroker
FirmFirm
Seller Buyer
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8. 8
MOSTIMPORTANTBLOCKCHAIN-RELATEDTERMS
Souces: Moody‘s Investors Service, 2016; WEF & Deloitte - The future of financial infrasctrucutre, 2016
Hashing
Hyper-ledger
Miners
Cryptography
Digital
Currencies
Distributed
Ledger
Cross-industry
standard for
distributed
ledgers.
Provides proof that
records in the public
ledger cannot be
changed. Any attempt
to tamper is apparent
immediately.
Internet-based form of money (in
the form of an online code) that
can be used like other currencies.
Book containing
records of all
transactions by all
users in a network.
Validate and approve
transactions,
connecting the
blocks to a
Blockchain.
Mathematical
scrambling (digital
fingerprint) used to boil
down information, like
a PDF or DOC, into a
code known as a hash.
Blockchain
Technology
terms

9. 9
AMORETECHNICALDESCRIPTIONOFBLOCKCHAIN
Technically, Blockchain is a shared, trusted public ledger that anyone can inspect but which no single user can
control. A Blockchain contains all parties needed for a transaction. All participants keep the ledger up to date, as it can
be amended only by general agreement and certain rules.
Blockchain Technology allows individuals to have trust and efficiency in the exchange of anything.
“Blockchain technology will do for transactions what
the internet did for information“ Ginni Rometty, CEO of IBM
Blockchain is based on
distributed ledger
technology, which
means the relevant
data is distributed
among multiple users.
The blockchain is a
book of records of all
transactions that are
grouped into blocks.
After every transaction,
another block, with
information about the
previous block, is added
to the chain.
The blockchain enables
the exchange of
information in a
synchronous and even
manner.
Blockchain allows
different parties in a
network to complete
transactions
anonymously.
Souces: Economist – the promise of blockchain, 2015; Rometty – Sibos 2016

10. 10
THETECHNOLOGYEXPLAINEDINDETAIL
Each transaction (PDF or DOC) is
fed through a program that creates
an encrypted code known as the
hash value (digital fingerprint). The
transcribed transaction is placed in
a queue of pending transactions.
It must be verified that Alice really has
the rights to fullfil the transaction. This
check is a cryptographic puzzle derived
from the block‘s header. The
computational power for solving this
puzzle is offered by so-called miners.
In case a malicious miner tries to submit
an incorrect block to the chain, the hash
function of that block and all following
blocks would change. All nodes in the
chain would detect these changes
immediately and reject the block from
the majority chain with the most
transactions.
Miners compete among themselves to
be the first to validate the transaction
and put it into the ledger. The first miner
that successfully validates the
transaction gets a financial reward. At
least a third of all the participants in a
Blockchain network should be miners.
Miners validate and connect the two
blocks by making incremental changes to
one variable until there is a correct fit to
the previous block. The correct solution
will then be published to the network so
all the other miners can check if it is
correct. Each node adds the block to the
chain with the most blocks.
Blockchain allows secure
transactions without a governing
central authority. This is done by
advanced mathematics and
computer science in the form of
cryptographic hash functions.
The transaction from Alice to Bob forms
a block. Every block contains three
elements: a 256-bit-number (created
using an algorithm) called the hash, a
hash of the previous block, and the
actual transaction with a timestamp and
nonce.
1
5 6
2 3
7 8
4
Alice wants to conduct a transaction
with Bob (could be transfer of data,
money, contract, deed, medical
record, customer details, or any
other asset). This transaction is often
codified in a digital format (for
example, PDF or DOC).
Souces: Deloitte University Press, 2016

11. 11
ADVANTAGESOFBLOCKCHAIN
Souces: DBS Group Insights - Understanding Blockchain Technology 2015
Efficiency
Using the “if-this-then
that” logic of smart
contracts can reduce
error reduction and
increase speed.
Transparency
Get real-time insights into
trades and transactions
rather than just receiving
reports in different
formats at different times
from different institutions.
Trust
The majority of participants
in a blockchain system
need to approve the
transactions and agree
upon which data is written,
altered or removed.
Resilience
The larger the number of
blockchain participants
the more robust the data
is, as it can be seen as a
massively replicated
database.

12. TIMELINE, LIMITATIONS & APPLICATION FIELDS
12

13. 13
BLOCKCHAINTIMELINE
October 2008:
Bitcoin whitepaper by
the nom-de-plume
Satoshi Nakamoto is
published.
May 2010:
First Bitcoin purchase: BTC 10k for
a $25 pizza. Today BTC 10k is
worth $10m! Bitcoin is known as the
first use case of Blockchain
technology.
July 2014:
Ethereum Project – a
Blockchain platform with
the ability to build
decentralized applications
– is funded by a crowd
sale.
September 2015:
Major financial companies
form R3 – a consortium of
over 40 institutions
committed to exploring and
implementing Blockchain
technology.
June 2014:
LHVpank starts research
on Blockchain and its
digital security with their
app “Cuber Wallet“.
September 2016:
Over 40 financial service
institutions have invested
in a Blockchain or Bitcoin
startup since 2014.
September 2015:
Visa, Citi, Nasdaq,
Capital One and Fiserv
invest $30m in the
Blockchain startup
Chain.com.
Souces: Oliver Wyman, 2016; MissQT Fintech, 2015; GEM Mann, 2016; CoinDesk – Blockchain Breakout? Will Keep Investors on the Brink, 2017; Deloitte – banking colloquium thought paper 2015
2018:
WEC estimates that 80% of
all banks will initiate projects
concerning distributed
ledger technology – the
underlying technology
supporting Blockchain.

14. 14
LIMITATIONS OF BLOCKCHAIN TECHNOLOGY
Block size
The limited block size of 1MB
restricts the number of possible
transactions per second. A
larger block will, on the other
hand, increase the time taken
until each block is verified
before it can be added to the
Blockchain.
Scalability
More computational power
and stronger hardware is
needed to solve the
complicated mathematical
problems of every
transaction. It is expensive
to operate with larger
blocks.
Standards
To use Blockchain on an
industrial scale, there must
be certain industry
standards as well as legal
and governance
frameworks to improve
robustness, overall
performance and security of
the technology.
Diverging interest
Replacing existing financial
infrastructure will require time
and investment. With competing
interests between different
parties, it will take time to find
common ground for collective
action.
Souces: World Economic Forum- the future of financial infrastrucutre, 2016

15. 15
BLOCKCHAINAPPLICATIONFIELDSFINANCIALSERVICES
SMART CONTRACTS: A protocol specially created to
program agreements between different parties,
granting autonomous and correct execution.
Blockchain technology validates that the conditions in
the contract are met and then executes automatically
according to pre-defined criteria.
KYC: Using Blockchain technology for KYC means
helping institutions get to know their customers better
with identity management, digital citizenship and IDs,
assessing their financial counterparty risk without
further due diligence.
TRADE FINANCE & PAYMENTS: Blockchain acts as a
ledger for payments between branches and cross-border
payments. Trade Finance solution of Blockchain to
automate and speed up the mandatory letter of credit
process.
CLEARING & SETTLEMENT: Ranging from micro
transactions and insurance to cross-border
payments, Blockchain helps financial institutions to
transfer money with less costs. It will also simplify
currency exchanges.
AUTOMATED COMPLIANCE: Blockchain could
improve compliance procedures, improve
regulatory efficiency, and provide faster and
more accurate reporting that draws on
immutable data sources.
DIGITAL ASSETS: Ownership of assets
can be stored online and can transform
businesses such as custody banking.
PROGRAMMABLE MONEY: Blockchain can
automate transactions and payments only after
certain conditions are met.
DATA STORAGE: Blockchain can be used as
a decentralized database that is highly
robust, since it is not dependent on any
specific node.
Souces: World Economic Forum- the future of financial infrastrucutre, 2016

16. USES CASES
16
Smart Contracts

17. IN BRIEF:
Slock.it is a highly-innovative company producing and building
distributed contracts and decentralized companies. Rent, sell or
share anything without any middlemen involved. With Slock.it it
is possible to connect the Blockchain to the physical world.
PRODUCT/TECHNOLOGY:
USE CASE:
§ Slock.it digital padlocks help to sell or rent anything
secured by a lock.
§ Slock-powered doors can provide access to rental
apartments.
§ Rent out bikes, issue insurance and receive payment in
one single step while opening bike locks.
§ Any developer can build applications on Slock.it.
KEY FACTS:
§ Slock.it received significant publicity in 2016 around
their announcement to build the first fully-decentralized
investment fund, raising interest of $150m in funding.
§ IoT Stars Finalist 2016
§ FYFN IoT Awards Winner 2016
§ Postcapes Editor’s Choice Award Winner 2016
§ Partnership with Ubuntu, Samsung, Microsoft, Safeshare
Global, RWE, IPFS
Smart Contracts
17

18. IN BRIEF:
Tallysticks is a Blockchain-based software solution that is
private, cost-effective and secure. It facilitates invoice payments
and automates invoice reconciliation in a timely manner to
increase profitability. It is an immutable record-keeping
framework that establishes a trusted practice amongst
transaction participants and permissioned third parties. The
goal is to record when, how and if payments, invoice issuances
and reconciliations were performed.
PRODUCT/TECHNOLOGY:
USE CASE:
§ Helps to identify and avoid duplicate invoices and
double payments, reducing error-related costs.
§ Automated invoice reconciliation software and
immutable recordkeeping helps to meet regulatory
guidelines and reduces operating costs.
§ Military-grade data encryption eliminates the incentive
for hackers to steal sensitive invoice-related payment
data.
§ Prevents employees from manipulating and stealing
data.
§ Electronic invoice processing and reconciliation
software platform reduces invoice costs.
KEY FACTS:
§ Tallysticks was selected to participate in the Barclays
Accelerator powered by Techstars in London, out of a
pool of around 700 startups.
§ Voted a top 100 European FinTech startup
§ Part of the EY Startup Challenge 2016
§ Won three Blockchain Hackathons
Smart Contracts
18

19. IN BRIEF:
Everledger is a fraud detection system based on Blockchain.
Their product is a permanent ledger for any asset, which carries
a unique identifier difficult to replicate or destroy. In other
words, they offer transaction history verification of valuable
items and make it harder to trade them illegally.
PRODUCT/TECHNOLOGY:
USE CASE:
§ Diamond certification and tracking of transaction history
of the traded item. Where does the diamond come from,
who bought it, where did the money go?
§ Once the items are registered into Blockchain, the entry
can’t be changed, which provides the multiple
stakeholders in the supply chain a clear history of the
product, ensuring authentication and reducing the risk
of fraud.
§ Verification for insurance companies, owners, claimants
and law enforcement.
§ Verification for any valuable item, carrying a unique
identifier difficult to destroy or replicate.
KEY FACTS:
§ Originates from Barclays Accelerator
§ 2016 Fintech 50 list of businesses transforming financial
services in Europe
§ FT ArcelorMittal Boldness in Business Awards 2016
§ Best Blockchain Company: European Financial
Technology Awards, 2016
§ Winner of the BBVA Open Talent Competition, 2015
§ Awarded Best in Show at the Fintech Finals, Hong Kong,
2015
§ Meffy Award, 2016
Smart Contracts
19

20. PIONEERS DISCOVER OUTLOOK
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21. PIONEERS DISCOVER FUTURE
OUTLOOK
Outlook 2020
In the year 2020 an estimated 2.87 billion
people will be using a smartphone, and
therefore have a supercomputer in their pocket. No bank account
Around 2 billion people worldwide don‘t have a bank
account. These could be brought into the financial
system with the use of Blockchain technology.
Property registry
70% of all people worldwide who own land
have just a tenuous title to that land. With
Blockchain this problem could be solved
completely.
Internet of trust
Blockchain protects identities and offers a way to fulfil
transactions without any intermediaries and therefore
forms the foundation of a free society.
Car ownership & insurance
Fractional and part-time ownership of autonomous cars
will become a future Blockchain use case. Car
insurance premiums will be automatically adapted
according to drivers‘ behavior.Government
Blockchain code will be pressed into use for
citizens to cast votes via smartphone, tablet or
computer, in order to generate immediate
verifiable results. Dubai has announced a
strategic plan to see all government documents
secured on a Blockchain by 2020.
Souces: McKinsey – How blockchains could change the world 2016, Statista.com, PWC - Making sense of bitcoin, cryptocurrency and blockchain 2016
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22. FROM IDEATION TO IMPLEMENTATION
1. Ideation
Encourage an
entrepreneurial mindset
and define innovation
opportunities.
2. Intelligence
Discover startups,
technologies and trends
relevant to you.
3. Prototyping
Collaborate with startups
and create first product
prototypes.
4. Pilot
Develop a pilot and really
kick-start your innovate
project.
5. Implementation
Launch the new product
and start scaling up!
22
MAKING CORPORATIONS BLOCKCHAIN
PIONEERS
Startup-innovation
blueprint & roadmap
Potential startups and
new tech
Initial
startup-collaboration &
prototype
Established
startup-collaboration &
pilot
Established business
case & roll-out
Outcomes
Pioneers Discover developed 5 phases of innovation to help you implement Blockchain technology
into your corporation.

23. 23
PIONEERS DISCOVER: USP
4 reasons why we are the ideal partner
1. WE HAVE THE NETWORK
Our brand and community of startups, investors and
corporations are here at your advantage.
2. WE DELIVER TANGIBLE RESULTS
Our personalized services are designed to turn ideas
into real products.
3. WE PICK DIAMONDS
We guarantee the best match through digital
assessment and personal interviews.
4. WE ARE STARTUP & CORPORATE EXPERTS
Our team of consultants offer unrivalled insights and
expertise covering all industries.

24. We help corporations implement innovation through the potential of startups and their technology.
A team of corporate innovation
and startup specialists.
70+
collaboration projects on an
international scale.
A network of 13,000+ high-
potential early-stage startups.
Covering 7 major industries,
grouping them into ecosystems.
24

25. 25
Happy to help!
Feel free to contact us in case you have
questions about Blockchain technology
and how your company might benefit
from it!
Harald Federspiel
Consultant
harald.federspiel@pioneers.io
www.pioneers.io/discover

26. Technology needs visionaries to make it fly.
Be Bold. Be a Pioneer.
pioneers.io/discover
@pioneers @pioneersfestival pioneers.io