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Scotiabank Digital Banking Lab


Guest Opinion Piece: The Future of Bitcoin Mining: POW vs POS?—?what’s the natural way to mine?

By Mauricio Di Bartolomeo
March 29, 2018

Bitcoin mining is a high-stakes game with asymmetric returns built into it. The network protocol pays rewards to participants (aka miners) in exchange for the computer power they contribute to it. Every day, roughly 1,800 Bitcoins are issued to miners as rewards for their work. A miner’s rewards can be ball-parked by dividing the hashrate it contributes to the network by the total network’s hashrate. All mining computers are not created equal — some are faster, and more profitable than others. It’s an arms race between miners to develop more powerful and efficient equipment, and to operate in the lowest cost structures globally.

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Ivey FinTech Club Publication: The Perspectives

By the Ivey FinTech Club, Ivey Business School
Spring 2018 issue

Sponsored by the Scotiabank Digital Banking Lab, The Perspectives was conceived, created, designed and written entirely by Ivey and Western students. Its mission is to drive thought leadership on the future of financial services innovation, digital disruption, and everything tech. The inaugural issue certainly meets this ambitious goal, with feature articles on blockchain, AI, peer-to-peer lending, cryptocurrencies, open banking, and mobile wallets. It also features an interview with Eero Traagel, Associate Partner with IBM Global Business Services.

One of the Ivey Fintech Club’s goals is to engage students in learning about the digital transformation of banking and financial services. The Perspectives provides an opportunity for students to voice their opinions in this dynamic space.

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A PDF version of the publication is available for download here


The Real Value of Bitcoin

By Thomas Watson, Ivey Business School
March/April 2018 edition of the Ivey Business Journal

According to bitcoin lore, the world’s first cryptocurrency transaction was made on May 22, 2010, when 10,000 BTC were exchanged for two pizzas. Bitcoin has been relatively well known in techie circles ever since. But Joe and Jane Average pretty much remained clueless about digital alternatives to fiat money until last year.

When did bitcoin officially go public with a bang? The exact date is debatable, but late last November is a good guess. After all, that’s when it had a starring role on the television sitcom The Big Bang Theory.

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Canada is woefully unprepared for the FinTech tsunami

By Prof. Michael R. King, co-Director of the Scotiabank Digital Banking Lab at Ivey Business School
February 4, 2018

The buzz word FinTech covers a range of financial technologies that enable consumers to access financial services over their mobile phone or the internet. Through the many FinTech innovations introduced over the past five years, retail customers can take out a loan, make a payment, transfer money overseas, or invest their savings electronically. Customers enjoy a better experience at a lower cost by transacting via a simple interface that is easier to navigate than traditional brick-and-mortar businesses. And for many of these services, customers bypass traditional financial intermediaries who have profited from this activity, such as banks, mutual fund dealers, and money transfer companies.

While the FinTech wave arguably started decades ago before the term FinTech was coined, the global financial crisis turned this swell into a tsunami, as many consumers lost trust in traditional financial intermediaries. Technology, the loss of trust, and the arrival of mobile-first millennials are driving this paradigm shift in financial services.

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Published February 4, 2018, in The Financial Post at:


Popping the Bitcoin Bubble Releases Ethereum

By Prof. Michael R. King, co-Director, Scotiabank Digital Banking Lab at Ivey Business School, Western University
January 31, 2018

Cryptocurrency skeptics will be rejoicing at the popping of the Bitcoin bubble, with the electronic money dropping from US$20,000 per bitcoin (BTC) in mid-December to around half this amount by mid-January. Despite being caught up in the sell-off, I believe the second largest cryptocurrency, Ethereum, will rise out of the ashes because it offers something socially valuable and potentially game-changing.

Ethereum is the brainchild of Russian-Canadian programmer Vitalik Buterin, who dropped out of University of Waterloo in mid-2013 to focus full-time on Bitcoin. Later that year, this 19-year old came up with the idea for Ethereum, which he saw as an evolution that addressed the shortcomings of Bitcoin. In 2014, Buterin received the means to pursue his vision when he was chosen for a Thiel fellowship – a $100,000 two-year award offered by PayPal founder and tech billionaire, Peter Thiel. Buterin relocated to Zug, Switzerland, an area known as Crypto Valley due to its ecosystem of blockchain and cryptographic start-ups. Buterin then raised US$15 million in crowdfunding to hire coders and fund development, with core developers Gavin Wood and Jeffrey Wilcke.

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Interview with a Bitcoin Miner

By Prof. Michael R. King, co-Director of Scotiabank Digital Banking Lab, Ivey Business School
December 22, 2017

With Bitcoin reaching close to US$20,000 in 2017, many people are wondering what it takes to be a Bitcoin miner – the name given to participants in the Bitcoin network who verify transactions, maintain the blockchain ledger, and are rewarded randomly with new Bitcoin through the proof-of-work algorithm. To find out more, I attended a cryptocurrency MeetUp in Victoria, BC, where I spent a fascinating evening among Bitcoin enthusiasts. Among them, I met a genuine Bitcoin miner who explained how he got into mining. This individual – who prefers to remain (pseudo)anonymous of course – talked about his mining career and the advances in technology over a four year period from 2011 to 2015. By that point, he got out of the game before his monthly electricity bill surpassed the value of Bitcoins he was receiving. While mining may have become a big business run by pools of individuals or even corporations, learning about mining provides insights into the mindset and resources of this intriguing digital money.

King: When did you first get interested in mining Bitcoin (“BTC”)?

Miner: I first learned about Bitcoin while listening to a CBC radio story at work in July of 2011. I went home to research this new idea and stumbled across a webminer – basically a website that ran mining software on your computer. That site was going nowhere fast. In the meantime I downloaded the only Bitcoin wallet available at the time called Bitcoin, which is now called Bitcoin Core. This wallet included mining capabilities, which I explored, and I started solo mining using the Core client. After a few more weeks of research, I realized that the competition was already too fierce for solo mining and that pool mining was the only way forward. Pools were less than a year old at the time and I tried a few of them, but eventually settled on Slush, the world’s first Bitcoin mining pool founded in December 2010 by Marek Palatinus.[1] In this pool you needed to download the mining software, which I found through online searches of different Bitcoin forums. The pool mining software used my computer’s processing power and gave me around 35 million hashes per second (MH/s). As my share of the pool I started earning around one BTC every three to four days, or USD 5 to 15...

To read the rest of the interview, please download the article in PDF format.

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Enhancing Fintech With Diversity

By Brenda Trenowden
November/December 2017 edition of the Ivey Business Journal

Today’s challenges for financial services firms are many, ranging from an increasingly complex regulatory environment to a growing threat from cybercrime and increasing competition from technology firms. To solve these problems and be competitive, companies need to be innovative and nimble.

Many financial services companies have faced these challenges by embracing digital innovation. Members of their boards and executive committees have made the pilgrimage to Silicon Valley to meet with industry leaders and learn how to become more digitally savvy. Some companies have created “innovation spaces” with brightly coloured soft furniture and large electronic whiteboards. Others have introduced “jam sessions” of thinkers and experts across sectors and marathon coding competitions, and created incubation centres and separate tech hubs. Some are partnering with or acquiring fintech companies.

These strategies on their own, however, are not enough. After all, as the banking sector embraces the digital age, it risks becoming even more male dominated.

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Growing the GTA’s Fintech Ecosystem

By Robert Vokes and Janet Ecker
November/December 2017 edition of the Ivey Business Journal

Strengthening the fintech ecosystem in the Toronto region must be an imperative for the entire Canadian financial services sector and governments, in order to maintain and grow our international market position as a financial services hub.

This is the key finding of a 2017 report from the Toronto Financial Services Alliance (TFSA), researched and written by Accenture (NYSE: ACN) and McMillan LLP. Titled “Seizing the Opportunity: Building the Toronto Region into a Global Fintech Leader,” the report is based on primary and secondary research, including a survey and interviews with executives in the government, financial services, and fintech sectors.

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The Reality of Artificial Intelligence

By Eric Lee
November/December 2017 edition of the Ivey Business Journal

Open up any newspaper or social media feed these days and it’s easy to spot the tidal wave of hype that artificial intelligence (AI) has unleashed. Within this hype lies a lot of opportunity, but without the right knowledge and tools, it can be hard to identify the real breakthroughs. Spun by journalists driven by sensationalist agendas, AI news can make it easy to believe that super-intelligent robots are just around the corner. That reality is a long way off, but it doesn’t mean there isn’t a lot of value to be extracted from AI in its current iteration.

To date, real-world applications for AI have primarily emerged from today’s tech giants: Apple’s Siri, Google’s machine learning-powered search bar, and Netflix’s recommendation algorithms, to name a few examples. In today’s enterprises, the application of machine learning has been much more limited. It’s time to recognize that there are many more applications for AI in enterprises than just chatbots. With diverse applications already identified and many more to be discovered, today’s enterprise leaders have a rare opportunity to define what AI for industry will look like. But with all of the hype, it’s hard to know where to get started.

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Being a Good Fintech Partner

By Roy Kao
November/December 2017 edition of the Ivey Business Journal

Over its long history, Canada’s banking industry has absorbed a range of adjacent players in the sprawling world of financial services: trust companies, investment dealers, property and casualty insurers, and wealth advisors. Many of these structural mergers involved both extensive regulatory reform as well as significant cultural shifts within the industry. Yet as Canada’s banks consolidated and expanded into these other verticals, they tended to impose their cautious ways rather than adopt the more free-wheeling ethic of the smaller players they had raced to acquire.

The fintech revolution, however, will demand a complete re-boot of this well-established dynamic. As these ambitious start-ups evolve from giant-killing disrupters into innovation-minded partners for the banking sector, both sides are struggling to figure out how to live with one another.

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Guest Opinion Piece: SEC & Ethereum – Short-term Pain for Long-term Gains

By Mauricio Di Bartolomeo
August 1, 2017

If you have been exposed to capital markets and/or the Initial Coin Offering (ICO) phenomenon, you probably agree that there needs to be some basic degree of regulation or “ground rules” to protect retail investors from fraud. The Securities and Exchange Commission (SEC) published a bulletin on ICOs on July 25th, 2017, suggesting that some may be deemed securities. The price of Ether has been down since the announcement, but as the fast money runs for cover, regulation paves the way for bigger and better participants.

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Who should be Canada’s FinTech champion?

Prof. Michael R. King, co-Director, Scotiabank Digital Banking Lab at Ivey Business School, Western University
May 13, 2017

Most commentators agree Canada has many of the elements required to support a vibrant FinTech sector, notably a stable and secure financial system, a high-concentration of financial institutions, access to a large pool of talented employees, and expertise in the underlying ABCDs: artificial intelligence, blockchain, cryptography, and data science.

But a key shortcoming is the absence of a clearly defined FinTech strategy championed by the federal government.

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Published May 14, 2017, in the Globe & Mail at: 

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