SEPTEMBER 2018
DAVID YERGER JONATHAN AZEROUAL David has built 3 businesses and held key roles in 2 startups since graduating in finance & Jonathan has worked as a quantitative analyst, fund manager and trader in France, the United entrepreneurship from Samford University. David’s interest and involvement in States and the United Kingdom since graduating with honors in Financial and Statistical cryptocurrencies began after Fliptop (predictive analytics) was acquired by LinkedIn. He Engineering. Jonathan started to notice the limitations of existing currencies while working as a was the business lead at BitGo, a cryptocurrency security company, before starting trader at various financial institutions. He began to explore digital currencies, learn the Redwood Digital Group, LLC and Redwood Fund I, LP. ecosystems, and trade them as a new digital asset class. David is a conference speaker and panelist, investor, and is a fervent advocate of the new digital infrastructure of money.
JARED SINK GEORGE FONDREN Finance and Operations Head of OTC Trading Jared graduated from UNC in 2010 studying Economics and also studied at NCSU George has spent the last thirteen years working as a trader and analyst in the structured products graduating 2013 with Master of Accounting specialization in Enterprise Risk Management. space, focusing mainly on distressed fixed income securities such as non-agency RMBS, non-agency He is a North Carolina licensed CPA and began his career with EY's Advisory practice mortgage derivatives and CDOs. Prior to his career in finance, George started and ran a specializing in Risk. This role covered risk related to finance, operations, technology, and manufacturing company and was a Special Assistant to Elaine Chao at the U.S. Department of auditing. Labor. At Redwood Digital Group he is managing business operations and finance. His expertise George received an MBA from Northwestern University's Kellogg School of Management with in operational risk and accounting are welcome additions for this team of entrepreneurs majors in analytical finance and management and strategy. and traders.
Waves of Digital Innovation
Waves of Digital Innovation – Web 2.0
Waves of Digital Innovation – Web 3.0
Web 3.0 Internet 2.0 Internet 3.0 Sending originals, not duplicates Sending copies, not originals
1)The TRUST Perspective Institutionalized Trust Digital Trust TRUST is really difficult in the digital realm. Trust is critical to our society. Particularly to commerce. Digital money is even more difficult. Some examples of institutionalized trust: ❖ Forms of government and founding documents (US Constitution) The technical term for this computer science problem of digital money is ”The Double -Spend Problem ❖ Laws and regulations ❖ Legal relationships between individuals ❖ Insurance ❖ Property title ❖ Banking ❖ Monetary systems and monetary policy
2) The ACCOUNTING/DATABASE Perspective Blockchains can also viewed slightly differently as a globally distributed triple-entry accounting system.
3) The PROTOCOL Perspective
VALoIP
Lets look at the benefits:
David’s Blockchain recipe: 1. Network 2. Ledger 3. Consensus Mechanism
Where we are – Problems of Cryptocurrency ❖ The Hype ❖ Unclear Regulatory environment ❖ Scalability Problems on base layer networks ❖ Current lack of developer tools ❖ Security/custody of crypto assets
Where we are – Markets
Where we are – Markets (Oct 2018)
Where we are – Sharpe Ratio (365 D)
Where we are – Correlations
Where we are – Developers
Where we are – Technologies Enabled (Oct 2018) ❖ Direct Digital payments – digitally native currency (cheaper, faster, secure, etc) ❖ Microtransactions and metering ❖ Smart contracts - if this then that ❖ Secure store of value – In Venezuela property and savings can be confiscated ❖ Extra monetary applications - a blockchain token can represent anything that can be digitized
THE GROWTH OF CRYPTOCURRENCIES AND THE BLOCKCHAIN
We estimate that by 2027, 10% of global GDP will be stored on blockchains The World Economic Forum
THE CRYPTOCURRENCY S-CURVE RDG should benefit during S-Curve Growth 34% 34% 13.5% 16% 2.5% Innovators Early Adopters Early Majority Late Majority Laggards
Technology Adoption (S Curves)
THE TOKENIZATION OF EVERYTHING USE CASES
Redwood Digital’s Crypto wish list: ❖ Institutional Custodians ❖ Institutional Exchanges/Tools ❖ Regulatory Clarity for cryptocurrencies and crypto assets ❖ Futures Markets for other crypto assets ❖ ETFs ❖ Securities Token Markets
Bitcoin Network Visualizer Ethereum Network Visualizer
FAQ
What are the risks of cryptocurrencies? Primary risks are: o Uncertain regulatory environment o Price volatility o Theft/Security o Protocol risk Please see the memorandum for a more detailed discussion of the material risk factors associated with an investment in cryptocurrency.
What are the most likely uses for cryptocurrencies? Typical uses are: o The rise of digital money - “Next step in internet evolution” o Deflationary asset class - known limited supply o Cross-border advantages - very low transaction fees o Bitcoin’s immutable ledger - “The One True Data Depository” o Ethereum’s smart contracts - improving executable contract technology
Are there other characteristics to know about cryptocurrencies? Other characteristics are: o Varying levels of confidentiality for cryptocurrencies o Varying consensus mechanisms o Varying levels of security o Varying networks, transaction types, value transacted, and developer communities o Varying use cases for each cryptocurrency o Varying technological implementations and rates of change
REDWOOD DIGITAL GROUP Questions? LOCATION CONTACT US info@rdg.fund 555 Fayetteville St 3rd Floor info@rdg.fund 919.522.0214 Raleigh, NC 27601 david@rdg.fund & 300 Concourse Blvd Suite 101 Ridgeland, MS 39157
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