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Cryptocon Presentation July 2014

“Bitcoin represents something fundamental and powerful” – Fred Wilson, Union Square Ventures

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The World is changing

Email and Web – 20 years ago – life without it?

Bank fees – we all hate them

Why Crypto currencies will change financial services

Future Capital Bitcoin fund

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My Background

Running technology business since 1993

Launched Australia’s first digital MP3 music website in 1999

Listed first company onto ASX in 2000

Launched Australia’s largest Bitcoin fund ($30m)

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What VCs are saying about Bitcoin

Fred Wilson Union Square Ventures

•  “We believe that bitcoin represents something fundamental and powerful, an open and distributed peer to peer protocol for transferring purchasing power. “

Tim Draper Draper Fisher Jurvetson

•  “Bitcoin has the potential to transform the world the way the Internet did … All finance / commerce can be transformed by Bitcoin.”

Mark Andressen Andreesen Horowitz

•  “Personal computers in 1975, the Internet in 1993, and – I believe – Bitcoin in 2014.”

Chris Dixon Andressen Horowitz

•  “Bitcoin is the first plausible proposal for an economic protocol for the Internet.”

Jim Breyer Accel Partners

•  “I’m confident you’ll see major worldwide retailers adopting …Bitcoin.”

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…and they are putting their money in…

High profile Bitcoin

investments from past 18

months

$160M: Total VC funding reported in more than 30 Bitcoin deals $50M: Amount invested by Andreessen Horowitz into Bitcoin startups $40M: Investment in Xapo - The largest total investment into a Bitcoin

company $30M: Investment in Bitpay – A Richard Branson backed Bitcoin company $25M: Funding of Coinbase – A Sillicon Valley backed Bitcoin company $15M: Liberty City Ventures own “Digital Currency Fund” $11M: Winklevoss Capital investment directly into Bitcoin $2M: Peter Thiel (Paypal) personal contribution to a Bitcoin fund

60 Number of investors in “BitAngels”, a Bitcoin angel investment network

Bitcoin startups present a high potential investment option

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…and accelerating

$40M Series B July 2014

$30M Series B

March 2014

2014 run rate of US$284m, 3x the 2013 total investment of $87.7m

Q1 $64.5m

2013 Total

$99.5m

Note: *Includes first sequence venture deals but excludes late-stage 1995 internet investments ($257.6m). For additional disclosure on methodology see http://www.coindesk.com/following-money-trends-bitcoin-venture-capital-investment/

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Financial Institutions are watching Type Activity

Investment Bank Report

Investment Bank Report

Investment Bank Report

Investment Bank Report

Ratings Agency Report

Asset Management Investment

Consultancy Report

“We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to

traditional money transfer options.”

David Wood Bank of America/Merrill Lynch

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…and thought leaders are seeing promise

“I’m a big fan of Bitcoin …

Regulation of money supply needs to be

depoliticized”

Al Gore Former US Vice President

“Bitcoin may hold long-term promise”

Ben Bernanke Former US Fed Reserve

Chairman

“Bitcoin is a technological tour

de force”

Bill Gates Microsoft Co-founder

“We have elected to put our money

and faith in a mathematical

framework that is free of politics

and human error”

Tyler Winklevoss Entrepreneur

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Opportunity Areas Bitcoin Aiming to Disrupt $457bn+ Total Market Cap

Payment Processors:

e.g. Visa, Amex,

Mastercard $381BN

Payment Hardware: e.g. NCR,

Micros, Verifone $25BN

Money Transfer /

ATM Outsourcin

g: e.g. Western Union, Money

Gram $14BN

Bank Software: e.g. Fidelity,

Fiserv $37BN

Total $457BN

+

Source: CoinDesk, Wedbush Securities – As at 8 April 2014

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Offering large potential transaction cost savings of $200billion Potential annual net savings with Bitcoin based on 2013 volumes

2013 Market Size ($bn) Retail Ecommerce Remittances

$ volume by market 10,383 609 549

Prevailing average pricing 2.5% 2.9% 8.9%

Bitcoin pricing 1.0% 1.0% 1.0%

Prevailing transaction fees 259.6 17.8 48.9

Bitcoin transaction fees 103.8 6.1 5.5

Potential Savings with Bitcoin ($bn) 155.7 11.8 43.4

Source: Goldman Sachs Global Investment Research

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Opportunity Areas Bitcoin Companies can be grouped into 6 categories

Payment processors

Mining hardware

Financial services

Exchange

Wallets

Universal

Exchange

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As a “currency”, the price has recovered

Source: CoinDesk Bitcoin Price Index daily closing price (taken at 00:00 UTC)

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… opinions vary on where it could be

Sound economic models developed

by senior bank officials…

“Our current view implies a maximum

fair value of bitcoin = US$1,300”

David Wood Bank of America/Merrill Lynch

…To those that are “true believers”

“We believe Bitcoin could reach $US

$10,000”

Tyler Winklevoss High profile Bitcoin advocate/

Facebook

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While Bitcoin as money is small

2,705

255 8 7

0

500

1,000

1,500

2,000

2,500

3,000

US Australia Guatemala Bitcoin

M1

Mon

ey S

uppl

y (U

S$B

N)

Rank Country Money Supply ($BN)

90 Bitcoin 6.15 91 Afghanistan 5.92 92 Sudan 5.85 93 Macau 5.84 94 Uzbekistan 5.84 95 Serbia 5.79 96 Ghana 5.77 97 Uruguay 5.32 98 Papua New Guinea 5.30 99 Malta 5.27 100 Yemen 5.14

Bitcoin is small compared to US, Australian currencies

… but there are 100 countries that have a smaller currency supply than Bitcoin

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Its use in commerce is growing

Region Businesses

North America 1,563

Europe 1,478

South Asia / Australia 227

South America 167

India 94

Africa 24

Approx. 60,000 merchants accept Bitcoin ... mostly online Physical businesses accepting Bitcoin

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Bitcoin advancing on other networks

Bitcoin Western Discover Paypal Discover Amex Union Pay Master Card Visa Aver

age

Dai

ly T

rans

actio

n Vo

lum

e (U

S$)

(Pulse)

$100M

$1BN

$10BN

$20BN

$41M

$216M $299M $397M $438M

$2.4BN

$7.5BN $9.8BN

$16.5BN

Source: Coinometrics.com, 30 April 2014

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Bitcoin access by merchants and customers is becoming easier

Point of Sale By Internet By Mobile Bitcoin ATMs

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Next Steps Participate in the global Bitcoin phenomenon

Contact: Domenic Carosa

dom@futurecapital.com.au +61 411 19 69 79

Holger Arians holger@futurecapital.com.a

u +61 439 716 110

www.futurecapital.com.au/bitcoinfund