NASDAQ S BLOCKCHAIN AND THE ENABLEMENT OF COMPETITIVE ADVANTAGE APAC BLOCKCHAIN CONFERENCE Peter Jessup, SVP of Global Technology, Nasdaq March 7, 2017
WHO WE ARE Over the past decade, Nasdaq has transformed its business from a U.S.-based equities exchange to a diversified global FinTech company. Today, the company is firmly established as a leading provider of trading, exchange technology, information and public company services across 6 continents. Applied Technology Innovation Growth Resiliency Total Shareholder Return 2
WHAT WE DO We provide the infrastructure, tools and strategic insight to help our customers navigate the complexity of global capital markets and realize their capital ambitions. The four pillars of our business are: Trade Tech Intel List 3
TECHNOLOGY TRENDS SHAPING FINANCIAL SERVICES? Innovations Advancing The FinTech Landscape CLOUD SERVICES SMARTPHONE ECOSYSTEM BLOCKCHAIN INTERNET OF THINGS INTELLIGENT/ PERSONAL VIRTUAL ASSISTANT MACHINE INTELLIGENCE CRYPTOGRAPHY QUANTUM COMPUTING BIG DATA MICROSERVICES AUGMENTED REALITY / VIRTUAL REALITY DIGITAL MONEY 4
WHAT IS THE BLOCKCHAIN? SECURITY. INTEGRITY. CONSENSUS. FOUNDATIONAL. GROWTH. INNOVATION. SECURE DATA STORE Only parties who should access it, can access it. FOUNDATIONAL TECHNOLOGY It is not a financial asset, it is not a business. STABILITY THROUGH DECENTRALIZED CONSENSUS Input is guaranteed / validated through decentralized consensus. GROWTH Potential enabler for cost savings but also for growth, new business models and market structures. CRYPTOGRAPHY ENSURES INTEGRITY Data remains consistent, once written it cannot be modified. INNOVATION Part of Nasdaq s larger tech innovation portfolio. 5
COMPLEX WEB OF THIRD PARTY INTERMEDIATION Investor Broker Dealer / Clearing Member Marketplace Broker Dealer Investor CCP Clearing Member Global Custodian Global Custodian Sub- Custodian CSD Sub- Custodian Government Corporation Central Bank 6
CAPITAL MARKETS ON BLOCKCHAIN Investor Marketplace Investor Asset and Cash ledger(s) Government Corporation Central Bank 7
BLOCKCHAIN SERVICE PART OF THE NEW NASDAQ FINANCIAL FRAMEWORK NASDAQ CORE CORE SERVICES BUSINESS APPLICATIONS CORE Open, deterministic, high speed communication, operations and resiliency layer Shared services to be leveraged by business applications Agile business extensibility building upon a strong foundation GUIDING PRINCIPLES FOR DEVELOPMENT: BUILT FOR CHANGE INTEGRATION ROBUSTNESS INNOVATION
NFF BLOCKCHAIN SERVICE LEDGER AGNOSTIC Multiple Integrations Native Language Bindings Flexible Connectivity Options DEFINED PARADIGM Strong Architectural Separation Defined design constructs Flexible Data Model DESIGN FEATURES Bare Metal and Cloud Support Stand-alone or Integrated Service HSM Integration COMMON API Asset Definition Asset Issuance Account Creation Asset Transfer Account Query 9
3 BLOCKCHAIN USE CASES evoting NEW MARKETS LINQ 10
ESTONIA VOTING APPLICATION VOTING APPLICATION Created to manage the voting life-cycle for the Estonia Proxy Voting Proof of Concept. Built using the Voting and Blockchain Services and supports: Creation of Voter and Administration Accounts Issuance/Transfer/Rescinding of Voting Rights Creation of Voting Token(s) Registration To Vote/Cast Vote Viewing Voting Results BLOCKCHAIN Ballot Record of Truth VOTING SERVICE Created to provide a uniform method of developing secure voting applications. First generation powered by Chain Smart Contract Scripts developed jointly by Nasdaq and Chain. Second generation powered by Trusted Oracles developed by Nasdaq. 11
VOTING SERVICE TOKEN STATE DIAGRAM 12
VOTING SERVICE TOKEN STATE DIAGRAM
APPENDIX 14
BLOCKCHAIN SERVICE MODEL Issuer Application Issuer Application NFF Blockchain Node NFF Account Manager Application NFF Blockchain Node Transactions Confirmed Blocks Blockchain Node Generator Transactions Confirmed Blocks Blockchain Node Account Manager Application NFF Auditor Application Trading Application NFF Blockchain Node Blockchain Node NFF
NFF BLOCKCHAIN SERVICE Abstracts and provides access to blockchain platforms. Presents a uniform and consistent method to access a blockchain. Allows for the definition and issuance of digital assets, creation of digital wallets and transference of assets. Provides a common interface to supported blockchain stacks.