bbva innovation edge. cryptocurrencies (english)

Delve into the world of

cryptocurrencies

VIDEO I INTERVIEW

Three internationally renowned

experts give us the key aspects

to enter the world of digital currencies.

What is blockchain technology? In what areas

can this revolutionary technology develop?

What can we expect of its near future?

innovation edge | Crypto-currencies | centrodeinnovacionbbva.com

The great novelty of these

currencies is its technological

development, the way money changes

hands: the intermediary disappears and

the customer has the ability to record,

secure and make the payment or collection.

DIGITAL CURRENCIES

A future that is present and past


Lucia is 10 years old. She still doesnt know

what a virtual currency is, but she is indeed

part of the generation that will begin to use

them massively on a daily basis in the near fu-

ture. Like millions of other children, she is famil-

iar though with fake money, with which you

can buy many things in mobile games or vir-

tual communities such as Club Penguin. It is

money thats inside the phone [device]; when

you want to pay, you send it to the cashier or

the shopkeeper, who has a special machine to

get those coins.

And how do you send it? With a mobile mes-

sage, although you have to be careful not to

show it or send it to anyone because, then,

how do you recover it? The perception of the

child of what is a virtual currency is not too

far from what an adult could explain, and it is

essential when trying to understand the key

concepts of a phenomenon that promises to

transform the economy. Currency, means of

payment and security: three pillars that sum-

marize a major economic matter, now and al-

ways.

The near future


Gold, copper, nickel or silver; virtual, digital,

cryptographic... History has seen currencies

of all colors, sizes, nationalities and all sorts

of names for more than two thousand years.

The big break happened a few centuries ago,

when the way money changes hands was

transformed with the introduction of ledgers.

In modern payment systems, payments are

made by reducing the balance in a customers

account and increasing the balance in the re-

cipients account by an equivalent amount

a process that has not changed since the 16th

century. The difference lies in the technology

employed to record the balances, explains

the Bank of England in a special bulletin

about virtual currencies. In fact, it is all an im-

aginary and virtual journey, where briefcases

only intervene in minority practices.

Over the past half-century, these entries have

passed from being registered and communi-

cated on paper to being done electronically

between two clients, with the bank as witness,

guarantor and intermediary of the deal. Thats

Money has always travelled virtually

the past and present of modern banking, now

facing a new revolution. But if virtual money al-

ready existed, why is everybody talking about

virtual currencies like Bitcoin? Whats new, really

new, is once again the technological develop-

ment, the way money changes hands. In this

new mutation, however, it seems that the inter-

mediary disappears and the client is the one

who has the ability to record, secure and make

the payment or collection. The intermediate

step, the traditional bank as we know it, disap-

pears a decentralized model, as opposed to a

centralized one.


Virtual currencies seem to be another re-

sponse to an unstoppable trend aiming to im-

prove processes and reduce costs, which in-

volves technology and globalization. They are,

in themselves, the crisis and catharsis of the

old economic model based on borders, cus-

toms, brokerage and tolls of all kinds that pop-

ulate international, national or local economies.

Like any crisis, they are also an opportunity.

The possibility of establishing a new financial

model based on software and data is more real

than ever in this 2015.

For example, today most financial assets

(stocks, funds, derivatives, deposits...) only

exist as digital records in private or central

banks. Currencies too.

A small part of the money in circulation comes

to life in the form of notes or coins, even though

the majority lies within the oceans of informa-

tion and data that live in the computers and

technology systems of banks. They are the

custodians and guardians of data.


Bitcoin, like hundreds of other currencies of its kind, brings into question this

model by proposing a currency which is a computer code, limited in supply,

saved and recorded by the user, but localized and controlled by all its users

in real time through their computers. It is therefore the entire community of

users who guarantees that this currency exists and has been transmitted

from one person to another.

Its a peer to peer (P2P) model that makes unnecessary, at least in theory, the

presence of an intermediary. Behind Bitcoin there is a technological design

that allows disintermediation, point to point transmission, data encryption

and digital signing. Their transmission in the form of instant messages, with

popular apps like Telegram (or WhatsApp), allow to guess that such applica-

tions may soon play a leading role in virtual currencies.

Technology is the question


VIRTUAL WALLETSSuch as Google Wallet, Apple Pay, etc.

VIRTUAL MONEYThey are credits in online gaming or local currencies. They remind the days of Second Life, back in 2003

MOBILE MONEYTransmitted via mobile phones

DIGITAL CURRENCIESLike bitcoins

According to the Bank of England, there are four types of recent innovations in electronic payments that are often confused with one another:

Development boom

Only the two last categories have the decentralized component that makes

virtual currencies revolutionary. However, these four branches coexist and

complement each other depending on their purpose. Its use is still scarce,

but their development is experiencing a boom of activity that involves en-

trepreneurs, startups, investors and accelerators. We are going through a

present of creative chaos, a maze of possibilities and expectations where it

is still unclear which is the dominant species, the king of the jungle who will

exercise the law of the strongest.


A sufficient critical

mass

Offer a solution to a problem and improve an activitys efficiency

A purpose for its existence

beyond financial speculation

Above all, it must be

better than what

already exists

Today there are more than 100 virtual curren-

cies, with a market value of 4 billion dollars, ac-

cording to Coinmarket . Under the shadow

of the famous Bitcoin the most popular and

used of all of them hundreds of replicas have

Anyone can create a virtual currency, but not all will survive. To succeed they must have:

emerged, with specialized features and uses

including exchange rate; loyalty programs;

granting of credit; storage; donation; alloca-

tion of the digital property, and buying time,

among others.


Bitcoin and its derivatives meet many of these features:

They solve problems such as, for example, making a loan or transfer of digital goods and recording that transaction in a reliable way

They have elite users within the technology developer community itself

They are better in the sense that they are able to reduce costs


The future

How will virtual currencies look like in five years? As almost anything in eco-

nomics, we can predict and establish a model of behavior. However, it doesnt

make much sense if we consider the recent evolution of some technologies

and digital services. WhatsApp or Instagram hardly existed in 2009, and

now they are common applications used by millions of people. Facebook,

Twitter and LinkedIn were in full global spread, but they barely had revenue;

today they obtain more than 20 billion dollars a year between the three of

them and show profits.

Did anyone bet a dime on Google in 2008 when it launched Android? May-

be even less people than on Chrome OS, the operating system that aims to

reach hundreds of millions of computers around the world starting this year

and may sweep Windows off the map. Five years ago, the fate of Microsoft

could change. Steve Ballmer, then CEO of the company, criticized Google

for having two operating systems and described its strategy as unclear. His

own employee Ray Ozzie, Chief Software Architect at Microsoft, corrected

him saying: Android is a bet of the past, based on applications; Chrome is

the operating system of the future, when everything will be in the cloud.

From todays perspective, Ozzie was totally right about the strategy of his

then rival Google (although he lasted only two more months in Microsoft).


Every day there are new predictions, but they rarely crystallize in a revolu-

tionary phenomenon. Would Apple have bet on its luxury iPhone in 2007,

for its iPad in 2010 or its Watch in 2015? The present of virtual currencies

seems to be Bitcoin, but we still dont know how it will be really used, or if a

new and improved system will be born in the coming months or years.

However, and taking into account Hollywoods historical capacity to predict

the widespread use of a device or technology service (Startreks tablets in

the 80s; autonomous cars in Demolition Man, 1995; video calls in Back to

the Future... ), we can foresee another future for virtual currencies: their use

to trade time, i.e. hours, minutes or seconds. In the movie In Time (2011), the

protagonists go to work and get paid with time. The rich manage their time

fortunes and buy luxury cars with time units. Isnt this the most valuable as-

set and the real engine that moves business transactions or relationships?

Will we see time virtual currencies?


Regulatory pressure over

banks, who are waiting for a

common regulation on this

technology, is leaving innovation

in virtual currencies in hands of

financial startups. Banks remain

vigilant, but are also getting involved

in the process with investments

and funding emerging companies.

VIRTUAL CURRENCIES

The entry of banks in the sector


Blockchain technology represents a new source

of business for banks, as the transformation

of the value chain opens up a new revenue

stream. It will affect all those services involved

in the exchange of assets. However, the con-

cept of bitcoin doesnt allow just that, but also

a new way of understanding finance through

an economy that is collaborative, participatory

and between individuals.

These technologies that underpin the creation

of bitcoins allow the unique identification of

digital goods and their transmission to another

person or company directly without interme-

diaries. And here comes a potential threat to

banks, whose business is based, among oth-

er things, on providing trust. The typical bank

margin includes charging for loans (assets or

money lent) a bit more than what they pay for

deposits (passive or money). The same goes

for service fees such as account maintenance,

credit or debit cards, etc.

WHAT IF THE BANK AS WE KNOW IT IS NO LONGER NECESSARY?That is the approach of the bitcoin technology,

and thats why some entities are stepping up

to address this disconcerting future.


It has sponsored the development of Coinffein, a Spanish

startup leaded by Alberto Gmez and Sebastin Ortega,

who claims to be the bitcoin for the identification and

transaction of financial assets such as stocks, mutual

funds, commodities, warrants, options, futures... It takes

advantage of the peer-to-peer transactions allowed by

bitcoin-style technologies, so that the user can cover the

entire financial process without having to visit a bank. It

goes from the identification of an asset to the allocation

of its ownership to a user and the ability to transmit it

(sell it) to somebody else.


The groups approach to the bitcoin world has

gone hand in hand with its investment in start-

ups through BBVA Ventures. Its investment in

the incubator 500startups, with hundreds of

startups of all kinds passing through its hub,

has allowed BBVA to follow closely some of

the most innovative projects in the sector.

This Silicon Valley accelerator has supported

Traity, for example, a company that claims to

be the reputational ID in Internet and allows to

apply techniques of social intelligence (based

on social networks) for scoring related to finan-

cial products such as credits, among others.

Coinbase is the icing on its portfolio of invest-

ments, although its links with financial startups

are many through the specialized fund Ribbit

Capital, also participated by the bank. Sumup,

a startup that develops points of sale (PoS) for

retail, is another of its noteworthy investments.

BBVA sustains that the bank of the future will

be, rather than a guardian of data, a financial

services intermediary. Francisco Gonzlez,

President and CEO of BBVA, visualizes the

bank of the future as a driver of technology

development to simplify the user experience.

The acquisitions of Madiva (real estate big

data) or Simple (mobile and personal finance)

expand their possibilities for providing tech-

nological services and keeping engaged with

the evolution of the financial ecosystem.


It has opted for an alliance with Telefnica in various

joint ventures and has launched in 2015 its first fund spe-

cialized in fintech (finance and technology). Under the

brand Innoventures it has started to invest in startups

and soon it will also enter the virtual currencies area. It

participates in projects like Monitise, Yaap and Cyano-

gen, the future rival of Android.


The British bank has launched along with Techstars an

accelerator of projects related to finance. Among these

young companies, the development of technologies

based on Bitcoin is not something unknown. Projects

like Crowdestates (mortgages), Aire (cards), Gust Pay

(payments) or the Spanish Novicap have visited Barclays

headquarters, who has invested in them and is observ-

ing whats happening in the sector and among virtual

currencies.

One of its major business areas is precisely its exchange

rate and forex broker, one of the largest in the world

alongside UBS, Deutsche Bank and JPMorgan.


In response to the Call for Information on digital cur-

rencies launched in November 2014 by the UK Treasury

in order to analyze the development of this technology,

Citi issued the report HMT Call for Information on Digi-

tal Money . In this official response, the bank pointed

out that the lack of clear regulation is creating uncer-

tainty by preventing legitimate players, such as banks,

to enter this field. In its paper, Citi urged authorities to

resolve these uncertainties in order to allow banks to

decide how to approach digital currencies.


The Swiss bank has decided to focus on in-

vesting in house, in internal projects led by its

own employees instead of outsourcing fintech

innovation to startups. Thus, UBS has created

a laboratory to investigate the potential of the

underlying technology in Bitcoin, just as BNY

Mellon and other banks have done.

In early 2015, UBS announced its intention

to explore how blockchain technology can

streamline transactions. It has run some tests

with smart-bond, a tool that uses this techno-

logy to do cryptographically what normally

would be done by the intermediary.

There are many more examples of how the

banking industry is trying to catch up with the

upcoming technological revolution, but initia-

tives are scattered.

So far, startups that have created online for-

eign exchange services are the big beneficiar-

ies in the short term of the bitcoin technology:

they are the ones who charge commissions

for every transaction that takes place on ei-

ther side of the Bitcoin, changing it to euros,

to yen or dollars.

Although the US banking industrys involve-

ment in fintech projects through investments

in startups is less visible, it is in fact quite no-

ticeable through numerous specialized funds.

There are two examples that clarify the rela-

tionship of large US banks with financial inno-

vation products such as bitcoins and others:

they are, for example, the main funders (pro-

viding capital and credit) of the largest credit

platforms between individuals and companies

(P2P) in the country, Lending Club and On-

Deck. US banks already work and have been

reaching agreements for years with financial

startups to develop the technological side of

their business.


This is the formula to combat the so-called market

makers, i.e. Google, Apple or Amazon companies

able to change in a short time the banking habits of

consumers through their tools and technologies.

WhatsApp, owned by Facebook, is already revolution-

izing telecommunications in 2015 with the massive

spread of VoIP calls, just as it did before with its chats

against SMS.

It also plans to enter the m-payments sector, although

Apple seems to be the best-positioned to extend the

massive use of electronic payments via mobile phones

with its Apple Pay service.

For now, both will use the infrastructure of traditional

operators and banks. But what about the day the devel-

opment of bitcoin or other technologies allows them to

contact consumers without going through the bank?

The competition of the market makers


To avoid letting a language die,

people have to speak and write

in it. For a currency to become

a reality, the same: it has to be

used, have a value, and be a

buy & sell tool.

GLOBAL SNAPSHOTS

(Potential) bitcoin-based

success stories


In 2015 there are hundreds of virtual currencies

Yes, hundreds. There are so many that it seems hard to believe that they all

have chances to be used and needed by people (or machines). Soon there

will be so many that they will exceed the physical currencies which they are

called to replace. Nevertheless, today they are only used by a minority, and

their consideration as currency is still being questioned.

The physical world in the 21st century has evolved into five major curren-

cies grouping more than 90% of transactions: dollar, euro, yuan, pound and

yen (in this order). There are more, but they arent relevant from a global

perspective and dont have influence beyond certain territories. But with the

Internet this approach changes, as the territory itself is global.


CURRENCIES l OTHER USES

BITCOINSIt has already become a name associated with a range of products, the

same as Kleenex to tissues; Coca-Cola to any soda with certain taste, or

Google it for searches on the Internet. But the bitcoin protocol is also the

spark behind hundreds of initiatives and startups that can become poten-

tial successes. And they will reach that stage when they become part of the

daily life of users.

innovation edge | Crypto-currencies

centrodeinnovacionbbva.com

NAMECOINOf French origin (Gerald Boily and Vince Durham are linked to its design),

this bitcoin-based currency is actually a domain registrar. It serves to gener-

ate a new set of protocols, localization and identification on the Internet of,

for example, the rightful owner of a website. Its features allow, among other

things, to speed up the tedious task of transferring a domain (without in-

termediaries), its registration, and reinvent the classic DNS (Domain Name

System) hierarchy that today configures any connected device, be it a web

or an app. Its structure and mode of operation is a clone of Bitcoin: limited

to 21 million units maximum and a progressive creation of them under the

mining mode.




DODGECOIN, LITECOINThere are countless developments and versions of bitcoin, but if we have

to mention some of them, these two should be highlighted for two reasons:

they improve the safety of other systems (through complex strings and

previous encryption) and are more used than the rest in terms of activity

and transaction. Their issuing volume (maximum of coins in circulation) and

mining (creation of money) is less limited.




RIPPLEIf bitcoin transfers money in the form of computer code, Ripple does the

same but with credit. It is therefore a P2P credit system based on the bitcoin

technology and concept. Its users transfer among themselves these virtual

credits, with the objective of eliminating the intermediary (the bank). The

system itself and its users act as banks in the form of community. They are

the ones who record the debt, ensure that it has been returned (or not) and

allow to establish lender-borrower relationships among them.




ETHEREUMIt aims to provide an alternative protocol based on blockchain to create

smart contracts. It uses an integrated turing-complete programming lan-

guage which allows to write smart contracts and decentralized applications

to create their own arbitrary rules for property, transaction formats and state

transition functions.

This protocol goes beyond the currency; it addresses decentralized file stor-

age protocols, decentralized computing, decentralized prediction market...

it also has the potential to increase the efficiency of the computer industry

and boost other peer-to-peer protocols.





COINBASEA platform of reference for the exchange of virtual currencyA currency that doesnt depend on any country... you can be your own

bank and make transactions worldwide very easily and quickly. Or whats

the same: you have the control and the reins of your own money. This

is how Brian Armstrong defines the US startup Coinbase, a leading

platform in the field of buying and selling virtual currency which was

launched in 2012 as an alternative to the current monetary system and

is regulated by an algorithm and the trust of its users. The platform has

currently 2.5 million users.

Headquartered in San Francisco, Armstrong (a former programmer at

Airbnb) founded together with Fred Ehrsam (former consultant at Gold-

man Sachs) the American platform that serves as a virtual wallet and

e-commerce mediator with bitcoins. In 2014 it was launched in 13 Euro-




Convert USD to Bitcoin and back through your bank account Coinbase keeps your

bitcoin secure

Invest

Pay Friends

Shop Online

pean countries: Spain, France, Belgium, Italy, Portugal, Holland, Austria,

Cyprus, Finland, Greece, Latvia, Slovakia and Malta. Months later it did so

in the UK - with the approval of Londons City, the British and European

financial capital - and is currently present in 26 countries.

This expansion is based on three pillars: a consumer wallet (the bitcoin

online wallet), that allows to make payments in a simple, anonymous

and safe way; a platform with APIs, so developers can build bitcoin apps

for businesses; and an exchange, where individuals and companies can

trade bitcoins against all major currencies. As Armstrong explains, we

want our exchange service to be the most liquid one, improve our API

so people can develop all kinds of applications, and expand our Bitcoin

Wallet to reach the maximum of nations.

In the United States, its exchange has conquered California and New

York, and its new service, Instant Exchange, is an insurance against vola-

tility as it allows users to send and receive payments in bitcoins eliminat-

ing the risk of exchange rates. When bitcoins are purchased or sent to

another person or company it is possible to pay for them immediately




using the local currency, and when received in the bitcoin wallet they

can be transformed directly into the local currency, avoiding future ex-

change rate variations. Licensed to operate in 25 US states, Coinbase is

transparent in all its operations against money laundering and its com-

prehensive identification model of customers prevents possible frauds.

Earlier this year, BBVA invested in the worlds largest cryptocurrencies

portfolio, which has an exchange service that allows users to buy and

sell bitcoins instantly. It did it through BBVA Ventures, the BBVA Group

venture capital project that invests in startups that are transforming the

finance industry. The 75 million dollars of the new Series C funding round

brings the total capital raised by Coinbase to 106 million dollars. The

round was led by DFJ Growth with the participation of existing inves-

tors, including Andreessen Horowitz, Union Square Ventures and Ribbit

Capital. The next target of the leading company in virtual currency ex-

change is India and to expand throughout the North American market.

Many may think Im crazy, but I believe bitcoin will surpass the dollar as

currency in the next 10, 15 years, bets Armstrong.



GEMINITwo key names in the Bitcoin ecosystem are related to this project: Tyler and

Cameron Winklevoss, the Harvard blond twins who became famous after

their appearance in the movie about Facebook as the architects behind the

social network. They are two of the biggest holders of bitcoins almost from

the beginning; that is, they were on top of the pyramid when the bitcoins

bubble and speculative fever exploded in 2013. Their fortune in bitcoins mul-

tiplied after investing several million dollars. Now they want to create a bit-

coins stock exchange to compete with other markets such as Coinbase and

provide liquidity to que currency incorporating large banks and Wall Street

hedge funds to the system. The Winklevoss have also invested in Xapo.





XAPO Behind this brand is one of the key names in the birth of online banking 15

years ago: Wenceslao Casares. He was the founder of the online bank Pa-

tagon, which failed after its millionaire acquisition by the Santander Central

Hispano of Emilio Botn, Jos Mara Amustegui and Angel Corcstegui. The

project was ahead of its time, but nevertheless it ended up being the base

of Santanders Openbank. With Xapo, Casares is at the forefront of bitcoin, as

a leader in virtual currencies storage and with its concept of safe. He has

also developed a currency and payment gateway for users and businesses.

Casares has garnered wide support, from the Winklevoss and funds such

as Benchmark, Fortress or Ribbit Capital (participated by BBVA). He is one

of the most experienced fintech entrepreneurs and achieved exits with the

sale of his previous project, the financial security app Lemon, which he sold

to the US group Lifeclock.



COINFFEINEIt is a Spanish startup owned by Bankinter and other seed venture capital

funds. Its still at a very early stage, but it has already shown its intention to

specialize in a particular area: become the bitcoin for the identification and

transaction of financial assets such as stocks, mutual funds, commodities,

warrants, options, futures... How? It remains to be seen how it does it, but the

concept of peer-to-peer transactionality enabled by bitcoin-style technolo-

gies provides a new system that, theoretically, makes unnecessary the pres-

ence of a depository or settlement agent, reducing the financial relationship

to the issuer and the investor.




KANTOX, PEERTRANSFER...They are among the most successful specialized projects in the financial

scene. Born in Barcelona and Valencia, these two startups compete with

banks in two specialized finance segments: sending money or remittances,

and currency exchange for businesses. Behind both projects we find peer-

to-peer platforms using technologies similar to what bitcoin suggests for

transactions. If they remain as they are, there is not much to add, but both

startups can very well grow with additional services and gradually become

the banks of the future.





AMAZON COINThe e-commerce giant is always in the front line when it comes to innova-

tion in retail. And if to do so it has to launch its own virtual currency, then

so be it. Amazon launched Coin in 2013 to provide discounts to users of its

digital content stores such as Kindle (books), Amazon Store (apps), Instant

Video or Music for series, films and audiovisual material. Even though it has

never provided figures regarding its use, the currency is still available for its

millions of customers in these key moments for the company.

Through its Prime program, Amazon is transcending the online world and

has become a logistics platform for its partners. Prime is a private sales club,

with users paying a subscription to receive multiple services. The latent pres-

ence of Amazon Coin can generate disruptive synergies in combination with

Prime. Dont forget that the value of a currency is in its use, the number of

users and the size of the market of goods that can be purchased. Amazon

has more than 20 million different products for sale in its pages.



THE SOCIAL COINThis Catalan startup has by-passed the mercantilist concept and conver-

ted bitcoin in a currency for chains of favors and altruistic actions. The

encryption technology based on the concept of Bitcoin allows to track

and measure the extent of a social action. The project, which is based in

Barcelona and run by a group of young people, has been financed with a

crowdfunding campaign and is about to launch its own app. Companies

like Cisco and Iberdrola have collaborated with them as a way to encour-

age their employees to volunteer.





DROPCOINAnother currency with a laudable goal: reward creators of content, at a time

when the absence of solid business models for small media prevents a

greater plurality of information. With just a click, this startup from Navarra

(Spain) offers readers of websites the possibility of making micro-donations.



DIGITAL CURRENCIES

The security dilemma

One of the main arguments raised by the creators

and supporters of virtual currencies as means

of payment is safety. Is this reputation founded? Some

of its detractors base their critics precisely in security

flaws and the cyberattacks they have suffered.


It is almost a mantra among experts when

pointing out the greatest cybersecurity threat

to a system: its you! Yes, it is the user who, at

some point, will expose the vulnerabilities of a

system, whether it is an employee, a customer,

a supplier, or a manager of a small or big com-

pany, a bank or a high level institution. In col-

loquial terms, it turns out to be something like:

You can put a thousand firewalls and the best

protection, but there will always be a user on

your network that compromises the system

accessing it from the wrong place or clicking

on the wrong link. Malware, apps, websites...

they are all potential threats.

Given this starting point, Bitcoin and other

virtual currencies would be far from being

immune and infallible.

P2P, strength and weakness


The transmission of information is

public (though just for advanced

users), opening the door to vulne-

rabilities that can only be solved by

specific tools, such as the digital wa-

llets.

The transmission of these curren-

cies between users is not encryp-

ted and can be tracked by others. It

is a clear communication, without

encryption. This means that anony-

mity is only limited to the users

identity and the transactions traffic

(incoming and outgoing) can be

monitored and spied.

It is unalterable and has a unique ID,

allowing to catalogue it also as a cu-

rrency, although it is not.

The most famous cryptocurrency

is a computer code that cant be

changed, or at least in theory it

seems impossible. This feature is the

foundation of potential uses based

in bitcoin, such as the identification

of digital property.

There is no authority guaranteeing

issuance, payments, the value of the

currency or its property; it is the sys-

tem formed by the community or

network of users who guarantees

who owns what in real time.

Among pairs or individuals, so its

great strength is at the same time

its greatest weakness.

THERE IS NO CENTRAL AUTHORITY:

TRANSMISSION:

COMPUTER CODE:

VULNERABILITY:

IDENTIFICATION OF THE DIGITAL PROPERTY:

THEY ARE P2P SYSTEMS:


The myth of anonymity

Bitcoin as such is anonymous, because it

doesnt require identification to be used. But

this myth falls down at the drop of a hat with

the above mentioned possibility of building

tracking tools. Since the amount of bitcoins

kept in any location is public information, the

money owned by a specific person whose

identity has been compromised can be de-

ducted, and also where the money came from

and which was its destination. Undoubtedly,

this would be a serious danger to the privacy

(and even the integrity) of people if Bitcoin is

adopted en masse, warns the security agency

Incibe in a report.

That anonymity was in question after the ac-

tions against Silkroad, an online market for il-

legal goods such as drugs or weapons which

were traded with bitcoins. It was only a matter

of time that the authorities (in this case the FBI)

established a map of relationships connecting

dealers, buyers and the creators of Silkroad.

Even today the real origin of Bitcoin remains

unknown. The real identity of its creators and

pioneers is masked behind the pseudonym

Satoshi Nakamoto. This can mean a weak-

ness for the system in the future, since it may

have encouraged the creation of some back

doors in order to create vulnerabilities, al-

though this seems unlikely as it is open source

technology. However, this anonymity can also

be its strength, as it has allowed to focus the

debate on the development and opportunities

of the currency, regardless of who created it

and why.



Theft rate, is the myth of a super-currency crumbling down?

Therefore, the degree of vulnerability or secu-

rity is linked to the complementary actions

adopted by the user, such as the digital wal-

let used for bitcoin transactions like transfers,

payments or simple storage. In turn, these

additional measures (wallets, platforms...) open

new paths tor vulnerability.

90% of the thefts of bitcoins since 2009 took

place in Mt.Gox, which was the largest ex-

change for trading these cryptocurrencies. It

went bankrupt in 2013, after a hacker attack

and unable to meet the reimbursements of

its clients. That insecurity, inherent to any plat-

form, reveals that virtual currencies are not

safer than current banknotes.

Until 2014 it is estimated that around 1 mil-

lion bitcoins have been stolen, with an added

value of about 800 million dollars (based on

its exchange rate a given time), according to

information published in forums like Bitcoin-

talks. This figure would represent a fraud rate

of only 0.3% compared to the volume of ac-

tivity of bitcoin (over 54 million dollars a day).

However, this ratio would be four times the

credit card fraud rate (0.09%), a sector which

moves more than $ 15 trillion in transactions

and records $ 13 billion in thefts, according to

estimates of the banking sector.

Fraud rate of 0,3%(the credit card fraud rate is 0,09%)$ 54 million

Daily volume of activity 1 millon

bitcoins were stolen in 2014


The explanation is simple: time. Technologies such as

bitcoin are less than five years old, while more traditional

payment systems like credit cards have been circulating

for over half a century and are still evolving in terms of

security and anti-fraud measures.

Absolute numbers suggest a greater insecurity, although

in theory it is much more difficult for cybercriminals to

attack a distributed network with millions of users than

just one hub with a great stock of currency. Wallets and

retailers are the ones taking the highest risk.

The need for a new generation of digital banks or the

transformation of those which already exist is therefore

more than evident, as well as the creation of a regula-

tion providing security to the users of cryptocurrencies.

Why is it considered a safe currency when data indicate otherwise?


CHRONOLOGY

Bitcoin from its origins

The development of what we know today

as bitcoin started between 2007 and 2009.

Its birth is surrounded by mystery, contributing

to make this technology even more attractive.

Its origins lead us to a pseudonym, Satoshi

Nakamoto, somebody who no one knows

or has ever seen


2008

November The first public appearance of Bitcoin was in the mailing list cryptography2, where a user with the pseudonym Satoshi Nakamoto announced that he had been working on a new system of electronic money.

The bitcoin chronology

Sources:

Bitcoin milestones

Bitcoin historical quotations: profits from mining


February A profile created in the P2P Foundation website under the name Satoshi Nakamoto posted the message Bitcoin open source implementation of P2P currency, which opened the door to participate in the network.

2009

January The first version of Bitcoin sees the light. Mining starts and a few days later the first transfer of bitcoins is done.

September The domain Bitcoin.org is registered.

October The first currency exchange rate is set: 1 dollar equals 1.3 bitcoins.


May The first commercial Bitcoin payment is accepted. That same month, a user pays for a 25 dollars pizza with 10,000 bitcoins. That will be the most famous transaction of the currency when in 2013 its price escalates to over 1,000 dollars per bitcoin.

2010

FebruaryMt. Gox and Bitstamp are launched, becoming the largest exchange markets for bitcoins and protagonists of its most famous speculative episode. Platforms to buy and sell virtual currencies start to spread.


2011

February Launch of Silkroad, an online market of illegal products which are traded in bitcoins.

June Wikileaks comienza a aceptar Wikileaks starts accepting payments in bitcoins. The virtual currency becomes famous; it is now a global issue and an object of concern to several governments.

November The first major international conference on Bitcoin is held in Prague.


2012

February Tradehill, the first major bitcoin exchange platform, closes due to regulatory problems and a dispute among its users.

March The web hosting platform Linode is hacked, suffering the greatest theft so far of bitcoins to a group of users (at that time valued in more than $ 200,000).

Summer Coinbase, Peercoin and Ripple, three of the most important startups of the virtual currency ecosystem are founded. In this fruitful summer, Bitinstant suggests creating bitcoin debit cards. There is a boom of projects based on Bitcoin, focused on the uses of the technology rather than on its financial component.

September There is a conference in London on the virtual currency. The Bitcoin Foundation is created, acting as a reference for the ecosystem during the following years. WordPress, the most used platform to create websites in the world, begins to accept payments in bitcoins.


2013

February The price of bitcoins begins to heat up: $ 31 per unit are paid in Mt. Gox.

AprilThe bubble starts to grow. For the first time, Bitcoin goes over $ 100, and in a matter of days it exceeds $ 250. The financial industry, starting with its most aggressive investors, sets its eyes on Bitcoin as its value starts to surge.

OctoberSilkroad closes after an FBI operation related to drug dealing and money laundering. It is the first seizure of bitcoins by authorities, and therefore there is a transfer of bitcoins to a government account.

DecemberMore than 5 million dollars in revenue are registered through bitcoin mining in a single day. This record triggers the participation in the ecosystem and attracts new users. That same day, bitcoin marks a record of $ 1,151 per unit.

End of 2013The Central Bank of China prohibits the use of bitcoin in its financial system. Other countries such as Thailand joined the ban, while other governments (Canada, Australia, Japan...) opt for pragmatism: they allow their activity and tax the bitcoin like any other financial asset. International agencies specialized in money laundering put the focus on the bitcoin system.


2014

January The founder of Bitinstant and president of the Bitcoin Foundation, Charlie Shrem, is accused of money laundering in the US.

February Mt.Gox, the largest exchange market for bitcoins, shuts down. It unleashes a wave of panic in the price of Bitcoin, which falls to 500 dollars, 50% less than a month before.

SummerSome of the most important startups in the bitcoin ecosystem raise important rounds of financing for their development. The ecosystem starts to become professionalized.


2015

June The Superintendent of the New York State Department of Financial Services (NYDFS), Benjamin Lawsky, unveils the final version of the BitLicense , aimed at companies that operate with Bitcoin and other cryptocurrencies in this state. Thus, to operate in New York, companies holding client funds or exchanging virtual money for dollars or other currencies will have to obtain a license. The new regulation establishes specific conditions to maintain the license, related to consumer protection and compliance of money laundering laws, capital requirements, changes of ownership and cybersecurity.

The bitcoin is stabilized between 230 and 280 dollars per unit. Already 14 million units of bitcoin have been created, more than half of the 21 million expected in 2030.


How to use digital currencies?

VIDEOGRAPHIC

In this videographic we will

show you, step by step, how digital

currencies are to be used, what do you need

to be able to use it, where you can use it and

what transactions you can carry out with

your digital money. Dont miss this tutorial

and learn the simple, fun way how

to keep up with cryptocurrencies.


In depthA list of links to other useful tools and resources that you may find useful as a supplement to the information offered on the Crypto-currencies report.

On theweb


Web

Internet of Finance: unleashing the potencial of blockchain technology Institute of International Finance, Abril 2015.

A Next-Generation Smart Contract and Decentralized Application Platform.

Hitos de bitcoin.

Ingresos por minera.

Citi response to the HMT Call for Information on Digital Money. Diciembre 2014.

PwC. Los medios de pago, un paisaje en movimiento, Junio 2015.

Accenture response: Digital currencies: Call for Information, Diciembre 2014.

Finance Magnates.

CoinDesk.


1 Trending issues Summaries of the most relevant news of selected topics that have been published over the course of the period based on its relevance to the Banking industry. The summaries were prepared by the editorial board. Further information is made available for each given topic.

2 Technology trendsIn the following section, we outline the upcoming technologies that will chan-ge everything, with predic-tions on what may come of them in financial industry.

3 InnovacinHighlighted in this section some of the actions in which BBVA Innovation Center takes part, on innovation and entrepreneurship. Through this section we also provide direct access to the BBVA Innovation Center events.

alsoin thisissue


In this section, readers will find summaries of the most relevant news of selected topics that have been published over the course of the month based on its relevance to the Banking industry. The summaries were prepared by the editorial board. Further information is made available for each given topic.

Trending issues

Core Banking Platform

New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology

New Banking Concepts

Big Data

Future of Work

DIY

80% of banks will replace their core systems within five years According to the Invigorating Banking report, sponsored by Five Degrees and done by Finextra Research, there is strong support for core system replacement and renovation. 83% of respondents believe that their banks technology can no longer support their needs, and another 89% think it is inevitable that banks quickly modernize technological processes to avoid losing market share.

Thus, four out of five banks believe they will have to replace their core banking system within the next three to five years. In addition, nearly 90% are in favor of including SaaS or cloud-based services as part of the infrastructure, according to this survey among bank executives.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

New challenges and opportunities for banks New technologies have already been the engine of transformation of business models in different industries, and therefore the vast majority of banks are trying to deal with the inexorable trend towards the digital market, which is changing the behavior of users and leading to the emergence of new disruptive competitors and new business models.

According to a publication of the Unacc, this new group of companies is challenging the established system reinventing different parts of the ecosystem of financial services: from Square, as a disruptive payments services company for points of sale, to ZestFinance, which uses Big Data technology for credit rating operations, or Simple, rethinking the user experience in retail banking.




Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Millennials prefer mobile banking According to research conducted by Gemalto, 92% of the young millennials have a mobile phone, 42% have a tablet and 38% have both devices. In addition, seven out of 10 connect to the Internet more than two hours a day, and almost four of every 10 millennials spend more than five hours.

Beyond these data about daily habits, the study analyzes the behavior of these young people regarding financial services. Nearly three out of 10 respondents say they have never visited a bank branch. Research shows that this generation is characterized by opting for online services: 62% of them say they use mobile banking at least once a month, accessing bank services through a smartphone or tablet.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Social business a profitable enterprise The concept of social business developed by Professor Muhammad Yunus, founder of Grameen Bank and Nobel Peace Prize, refers to a self-sufficient company in financial terms, which aims to achieve a social objective, whether related to the protection of environment, the promotion of science or arts, etc.

One of the characteristics of this type of companies is that they reinvest their profits in the development of the business. It is true that earnings do not increase, but they dont register losses either. Currently, these companies are enjoying a very favorable economic, social and political context, because the crisis has increased the need to fight against exclusion and poverty.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Barack Obama orders the use of Chip&Pin cards This measure recently approved in the US will favor the mobile payment sector and European providers. It should be noted that in the United States the majority of cards still use magnetic strips, a format much less secure than the Chip&Pin, widely established in Europe.

The executive order signed by the US president forces the federal government to issue EMV debit and credit cards with chip. EMV (Europay, MasterCard and Visa) is a global security standard that uses a computer chip to authenticate transactions.

This is a great opportunity for companies (and particularly SMEs) developing EMV-compatible mobile payment systems.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

The Iceberg Theory applied to customer experience The Iceberg Theory, based on the minimalist writing style of Ernest Hemingway, sustains that the heart of a story has to lie below the surface, and shine through. This theory is behind the premise that a good customer experience requires a lot of work: if the strategy is really well designed, the client wont see all the effort.

That is: you have to address all the problems and find solutions before the user detects them, or at least before he perceives there is something wrong. The challenge is to make invisible all your work in order to truly put the customer at the center of the corporate strategy.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Loyalty to a brand in Twitter Why do you follow a brand on Twitter? This is one of the questions that many social networking strategists of brands make in order to increase their number of followers. SimplyMeasured analyzed the followers of the 10 most popular brands on Twitter to investigate what they have in common and try to understand the behavior of consumers when they click on More. The results show that Internet users follow more than one brand, and in many cases several brands of the same market niche (i.e. competitors) at the same time.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Discover the crowdfunding ecosystem Entrepreneurs are one of the big beneficiaries of the rise of the P2P financial ecosystem, as it responds to their needs and demand for project funding in the initial stages. It is at this point when investors come into scene, becoming a peer-to-peer alternative to the traditional financial market. In fact, in these early stages of funding these investors are often called Friends & Family, as they are part of the core group who believes in the entrepreneurial project.

But beyond these figures we find professional investors: business angels, crowdlending platforms and even donors or prospective clients who buy in advance the product or service. Hence, to give coherence to this new model are emerging P2P technology platforms in different versions: crowdfunding, crowdlending, equity crowdfunding, donations or rewards, etc.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Fansino, the winning app of the Mobile Premier AwardsDespite being in its beta phase, Fansino has been the winning application at this years Mobile World Congress. It is a music-related app that helps connect artists with their fans.

Artists can tell when a fan is listening to their music and therefore assess the impact of their songs, while fans can chat with them. This app connects to Facebook and checks the artists social networks, so users can see the latest news published by music stars.

The apps GPSGAY and SATS Mobile Triage were the other nominees for these awards.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Apple Watch is in storesAustralia, Canada, China, Spain, France, Germany, Hong Kong, Japan, United Kingdom and United States are among the first countries to sell Apples new device, its smartwatch, a high precision gadget offering groundbreaking features for health and sports. The Watch is available online or by reservation at Apple Stores and Apple Authorized Resellers in China and Japan.

Apple Watch begins a new chapter in the way we relate to technology and we think our customers are going to love it, said Tim Cook, Apples CEO, when presenting the device. It allows users to send messages, read emails and answer incoming calls on their iPhone directly from the wrist. It offers up to 18 hours of autonomy and comes with a unique charging solution that combines Apples MagSafe technology with inductive charging to connect quickly and easily.




Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Social banking, a new banking experience Branches, online banking, mobile banking... these are concepts that are more or less common among bank customers. However, the so-called social banking is increasingly gaining strength as a new experience in the interaction between customers and banks. If until now banks used social networks to monitor and analyze the behavior of their users, services, customer care and, above all, strategies of brand marketing, now they are beginning to design and develop financial services designed for social networks. An example: the Indian bank Kotak Mahindra has launched Jifi, a service which integrates social networks to attract new users. Its the fusion of Twitter and Facebook with traditional banking.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

The Data springMadrid was this spring the city of Big Data, bringing together various organizations and initiatives: the Inno-vaChallenge Data Week, the Big Bang Data exhibition and the cycle Vivir en un mar de datos (Living in a sea of data), among others. It was an intense program of activities which involved a large number of organiza-tions and initiatives to explore and reflect on the crea-tive, social and political practices that arise around this culture of data.

Exhibitions, lectures, workshops, debates, datathons and guided tours contributed to explore subjects as diverse as: techniques and methodologies related to data visualization and data mining, data journalism, collective cartography, crowdsourcing, access policies and reuse of information (Open Data, Open Science), institutional and government transparency practices, economy of data, and online safety and privacy.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

Stress in the office can cause panic attacks across the company As the world economy continues its transformation, it is important to maintain a level of balance within the workplace. The challenge is to promote an environment free of stress in the office in order to achieve balance, engagement and productivity.

According to various studies, 40% of US workers have job stress and nearly a quarter say work is the main source of anxiety in their daily lives.



Trending issues


New Formats

Mobile Banking

Social Business

Mobile Payments

Customer-Centricity

Brands & Branding

Crowd Finance

App Ecosystem

Gadgetology


Big Data

Future of Work

DIY

The TechShop movement: how to learn electronics, welding or carpentry TechShop was founded in 2006 by Jim Newton and Ridge McGhee, a professor of robotics and a science adviser who were inspired by the lack of access of their students to the tools and equipment required for robotics. The challenge was to give people access to machinery and technology normally only open to specialists.

Anyone can join this movement and have access to multiple tools: computing machines, industrial sewing machines, oscilloscopes, laser cutters, 3D printers and all kinds of welding equipment, etc. These groups offer training on the use of each tool, but the key of the learning process is that once you have mastered the basics everything really depends on you: Do It Yourself.


Core Banking PlatformsHere you will find articles related to basic IT infrastructure which supports main banking processes, including technologies such as SOA, WOA, digital platforms, etc.

New FormatsBased on design principles focused on customer insights, New formats offers retail banking customers more channels which are more granular and highly functional; a consistent, simple, and collaborative universal user interface; real-time intelligent processes; highly personalized solutions; and is open to social networks and the web. Examples of these new formats are provided here.

Mobile BankingRelevant news about mobile banking platforms (which enable customers to access financial services, such as transfers, bill payments, balance information and investment options) can be found here.

Social BusinessSocial Business is the integration and use of social technologies by an organization, which includes social media/work media, crowd listening, crowd intelligence, crowd working, etc. Stay tuned to see how this space will evolve.

Mobile PaymentsThe process of using a hand-held device to pay for a product or service, either remotely or at a point-of-sale. Up to date information is provided.

Customer-CentricityCustomer-centricity is the organizations understanding of customers at a granular level and the capability to create, deliver, and capture different kinds of value propositions to different groups of customers, based on customer understanding.

Brands & BrandingMarketing in the modern world have many channels to reach consumers at their disposal: (smart)phones, tablets, PCs and (smart)TVs and different ways to communicate their brands, such as traditional ads, banner ads, SMS/MMS, etc.

Crowd FinanceA process where small amounts are money raised for a definite purpose, Crowd finance sources funds collectively from individuals. In other words, the money comes from a wide range of individuals and not from a single entity. Read more about it here.

App EcosystemThere are 5 main components in the current Apps Ecosystem: connectivity, devices, OS platforms, app platforms, and apps; along with related products and services providers (MEAPs, Mobility as a Service providers etc.).

GadgetologyGadgets are everywhere and it seems that there are more and more each passing day. We are moving towards a contextual computing environment and, as a result, the number and functions of gadgets are poised to grow (thanks in part to the internet of things). In this section, we share a word or two about gadgets.

New Banking ConceptsBanks around the world continuously explore new approaches to strengthen customer relationships, both in the virtual and the physical worlds; including Virtual assistants, natural language search tools, new marketing tools, different segmentation (children, gen Y,) etc. This section will cover news along these lines.

Big DataIt been said, what gets measured, gets managed. The Big Data trend offers organizations an opportunity to manage just about everything. Here well share stories about Big Data capture, curation, storage, sharing, analysis, and visualization.

Future of WorkWork, increasingly, is not about where you do, but what you do. The future of work is more flexible and collaborative; and values are going to play an important role, especially corporate values. The way we work is changing fast stay tuned.

DIYDo It Yourself (DIY) refers to a trend of people doing projects to either be creative/recreational and/or cost-saving activity. This trend becomes really interesting as new technologies enable new functionalities such as 3D printing, health/wellness, etc, which help empowers individuals; this may even change the we think about businesses in the future.

EACH SECTION EXPLAINED


Smartwatches: a new way to make apps For all of its technological marvel, the Apple Watch is still a

smartwatch, and its not clear that anyones yet figured out what

smartwatches are actually for. This phrase from Nilay Patel, a journalist from The Verge , pretty much sums up the current state of wearable technology. Its hot, fashionable, everyone talks

about it, but we still dont know exactly what do we need it for.

The Watch has just been launched with prices ranging from 350 to

15,000 dollars. Its still too early to know whether it will start a

revolution just as the iPod, iPhone and iPad, but many large

technology companies were waiting for Apple to present its new

gadget to start experimenting with such devices.

Its the case of Citymapper, an application that recommends users

different routes to move around the city on foot, by bike, taxi or

public transport. Citymapper has been one of the first apps adapted

to the Apple Watch.

The following section outlines the upcoming technologies that will change everything, with predictions on what may come of them in financial industry.

Technology trends


In an article published in Medium , the creators of this app explained how they conceived its smartwatch version: Weve

learned on mobile that users turn the app on and off multiple times

during use, they said. This is the nature of transit information when

you move across the city. You need snippets of information.

Different things at different times, depending on where you are

along the way.

With this in mind, they have created an application that offers quick

information about the state of public transport, which with a simple

tap on your wrist notifies you when you have to get off the train and

gives you the departure times of buses and trains without having to

take the phone out of the pocket. Furthermore, they claim that using

a wearable app may also be safer because city dwellers are

generally walking too fast, crossing streets, using stairs, jostling

through crowds.

The testimony of Citymapper shows us the smartwatch through

the eyes of a developer. Smartwatches are not yet

computers attached to our arms; they are, rather, a

second screen for our mobile phone (in fact, many

of them are not even autonomous devices and

need to be connected to a smartphone). For now,

these watches are here to save us the gesture of

taking the phone out of the pocket to check emails

and monitor our physical activity, but they are still

not ready to steal the throne to phones.


The language of watchesApples first iPhone was a breakthrough product for many rea-

sons. One of them is that it invented an entirely new language.

The finger gestures on the smartphones touch screen com-

pletely changed the way we use technology. The movements

we make with the thumb and index fingers to turn pages, zoom,

drag objects or type a message are part now of our daily life and

have been incorporated in all kinds of products.

Smartwatches have new features that require the user to com-

municate with them in a whole new way: the screen is small, it

is intended to take quick glances, the device is attached to the

wrist and can only be controlled with one hand, and there is little

space for buttons inside or outside the screen.

In the case of Apple Watch, we should high-light features like the taptic engine, a technol-ogy that taps the users wrist for notifications

and alerts, and the crown, a button that can

function like a computer mouse. In the com-

ing months we will discover what developers

come up with, and what users demand: In what

language will we interact with our watches?

Will voice control prevail? Will there be new

touch gestures? Will there be more watches

with crown?


Jorge Piera, Head of Mobile Development at

the Spanish company 8fit , is working on

a version for Watch of his fitness application.

Piera explains that the possibilities, for now,

are quite limited. With an iPhone you can grab

the tool palette and do whatever you want, he

says, but with Watch there are elements you

can change very little. We feel very constrained,

but we believe the result will be pretty good. In

these early versions of the watch, Apple wants

to stay in control and leaves little room for ex-

perimentation.

For Jorge Gutirrez, CEO of the Spanish com-

pany Tecnilgica , the difference between

developing for mobiles and developing for

smartwatches is as big as it was at the time

between computers and smartphones. If ges-

tural and voice interfaces improve in the near

future, watches will become independent de-

vices, other uses will appear and some of the

differences may disappear, he says. Rita Ma-

dariaga, lead of mobile development at Tec-

nilgica, adds that we are in the first versions

of these devices and there is still plenty to ex-

plore. She also believes that these gadgets

will unleash their full potential when they have

more autonomy.

Pedro Piera sees the watch not as an appli-

cation, but as a complement. Hence, train-

ing sessions are started with the mobile and

are controlled with the smartwatch. 8fit will

use Apple Watch notifications to provide us-

ers information about their diet, while the rest

of the app will focus on giving them informa-

tion about exercises without having to take

the phone out of the pocket.



Many of us stopped looking at the time on the wrist long ago; we now look at it on the phonesays Jorge Gutirrez

And while we are on it we read a notification, we check Twitter... We have got

used to it, and we assume this as something natural; we dont consider it a

lack of attention if we are with another person. Smartwatches, says Gutir-

rez, could turn around this process and allow us to check all these notifica-

tions faster.


Piera says that the size of the screen forces you to select very well what

information you have to show, and display it so that the user can see every-

thing at a glance. However, he doesnt think there is much room to invent

new touch gestures. You have the same as on the iPhone, but in such a

small screen you cant introduce a multitouch, he explains. Pressing the

screen opens a new menu, and they have tried to introduce new gestures

with the crown, but I dont think there is room for many more, he concludes.

Jorge Gutirrez also believes that there is no room for many gestures on

smartwatches, but he considers the crown one of the great features of Watch.

A finger on a smartwatch covers around 60 or 70 percent of the screen,

and 80 or 90 percent of the information, he says. I believe that all the in-

teraction you can move from the screen to the crown will be a success, and

I would be surprised if other manufacturers dont begin to incorporate this

type of control.

So, will we all end up wearing technology? Pedro Piera says its a mystery.

The iPad was criticized when it was launched, but Apple makes good qual-

ity products. It is possible that iPhone users also want this device, he says.

Jorge Gutirrez believes they will become usual devices, but he doesnt

think they will be as ubiquitous as smartphones. In their current form they

are going to be targeting high income customers, and wont have as much

penetration.


BUSINESS

Digital bank seeks long-term, stable relationship with startup. Offers engagement and support. Qualified partner will possess commitment, talent and eagerness to conquer the world.

bbvaopentalent.com

After the close of registration, this year will be

remembered by the global character of its en-

tries, as more than 650 startups from over 60

countries from all around the world have en-

tered BBVA Open Talent.

The surge in entries from the USA is notewor-

thy, having become the country with the high-

est number of participants, ahead of Spain,

Colombia, Mexico and the United Kingdom.

Spain 143

Colombia 57

UK 48

Mexico 47

USA 166

View all data in this

infographic


We suggest we go hand in hand, because as

the african proverb says:

If you want to go fast, walk alone, but if you want to go far, walk together

The 7th edition of this competition

is already underway:



This is the 7th edition of BBVA Open Talent,

BBVAs most ambitious competition so far,

and the most mature. We are looking for in-

novative fintech projects, but also related ide-

as that contribute to the industrys evolution

and transformation, such as Big Data, security,

e-commerce and others. We are interested in

finding projects and entrepreneurs to become

our fellow travel companions.

At BBVA, we are committed to innovation. We

have been partnering with entrepreneurs for

over seven years now. We have a passion for

discovering and promoting talent from whom

we can learn and share knowledge.

Show us your ideas that will disrupt our indus-

try in e-commerce, security, mobile payments,

data and others, and we will provide you with

support that will increase your chances of suc-

cess. We win when you succeed.

The final events, in which the 60 finalists will

have to compete before the jury and in public

to become one of the six winners, will be held

in September. After these, two champions will

arise from each of the three regions: Europe,

Latin America and USA & Rest of the world.

Each winner will receive 30,000 euros to

develop a project in collaboration with BBVA.

In total, more than 180,000 euros will be dis-

tributed among the six winners.

We dont just want a photo or a teambuilding

trip with you. We want to give you more. We

want you to give us more. Thats why we are

preparing an immersion and interaction pro-

gram that will be implemented over two non-

consecutive weeks.


In these two weeks, youll meet people from

some of the best companies in the finance

and technology industry and have the oppor-

tunity to use BBVAs contacts to the benefit of

your business. Through this project, well work

together, get to know each other, and find out

what you need - all while working together to

disrupt the financial ecosystem.

In addition, BBVA offers the winners of Open

Talent 2015 the opportunity to enjoy a unique

experience with the Roca brothers in the heart

of their restaurant El Celler de Can Roca

and in La Masa, their innovation center.

Also, BBVA create the Special Award for Fi-

nancial Inclusion . BBVA looks for startups

with digital financial solutions for low income

customers or small business that provide

products and services for low-income custom-

ers and digital financial solutions that enable

the bank gather and process information. he

winner will travel to Maputo, Mozambique, to

pitch his project in the Global Policy Forum in

September 2015.


INNOVAQUOTES

More than a year ago, BBVA Innovation Center began to share via social

media all sorts of inspiring content in the form of quotes. The motivating

nature of the content secured Twitter and Facebook users interaction.

After a long time sharing them, and given the positive reviews of these in-

spiring quotes, at BBVA Innovation Center we wondered: why not create an

app that helps you find the perfect quote for the right moment?

Discover #InnovaQuotes, your personalized quotes generator. Its an app from BBVA Innovation Centers

Facebook page that has been awarded on this years Digital Awards with the recognition of Best Campaign on

the Social Networks. In this app you can find hundreds of quotes that will grant you the necessary inspiration for

innovation and entrepreneurship.

InnovaQuotes, an

bbva innovation edge. cryptocurrencies (english)

Documents