BBVA Innovation Edge. Cryptocurrencies (English)

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?
VIDEO I INTERVIEW
Delve into
the world of
cryptocurrencies
innovation edge | Crypto-currencies | centrodeinnovacionbbva.com

DIGITAL CURRENCIES
A future that
is present
and past
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.

The near future
Lucia is 10 years old. She still doesn’t 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 that’s 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.

Money has always
travelled virtually
Gold, copper, nickel or silver; virtual, digital, the past and present of modern banking, now
cryptographic... History has seen currencies facing a new revolution. But if virtual money al-
of all colors, sizes, nationalities and all sorts ready existed, why is everybody talking about
of names for more than two thousand years. virtual currencies like Bitcoin? What’s new, really
The big break happened a few centuries ago, new, is once again the technological develop-
when the way money changes hands was ment, the way money changes hands. In this
transformed with the introduction of ledgers. new mutation, however, it seems that the inter-
“In modern payment systems, payments are mediary disappears and the client is the one
made by reducing the balance in a customer’s who has the ability to record, secure and make
account and increasing the balance in the re- the payment or collection. The intermediate
cipient’s account by an equivalent amount — step, the traditional bank as we know it, disap-
a process that has not changed since the 16th pears – a decentralized model, as opposed to a
century. The difference lies in the technology centralized one.
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. That’s

Virtual currencies seem to be another re- For example, today most financial assets
sponse to an unstoppable trend aiming to im- (stocks, funds, derivatives, deposits...) only
prove processes and reduce costs, which in- exist as digital records in private or central
volves technology and globalization. They are, banks. Currencies too.
in themselves, the crisis and catharsis of the
old economic model based on borders, cus- A small part of the money in circulation comes
toms, brokerage and tolls of all kinds that pop- to life in the form of notes or coins, even though
ulate international, national or local economies. the majority lies within the oceans of informa-
Like any crisis, they are also an opportunity. tion and data that live in the computers and
The possibility of establishing a new financial technology systems of banks. They are the
model based on software and data is more real custodians and guardians of data.
than ever in this 2015.

Technology is the question
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.
It’s 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.

Development boom
According to the Bank of England, there are four types
of recent innovations in electronic payments that are
often confused with one another:
VIRTUAL WALLETS
Such as Google Wallet, Apple Pay, etc.
VIRTUAL MONEY
They are credits in online gaming or
local currencies. They remind the days
of Second Life, back in 2003
MOBILE MONEY
Transmitted via mobile phones
DIGITAL CURRENCIES
Like bitcoins
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.

Today there are more than 100 virtual curren- emerged, with specialized features and uses
cies, with a market value of 4 billion dollars, ac- including exchange rate; loyalty programs;
cording to Coinmarket . Under the shadow granting of credit; storage; donation; alloca-
of the famous Bitcoin – the most popular and tion of the digital property, and buying time,
used of all of them – hundreds of replicas have among others.
Anyone can create a virtual currency, but not

all will survive.
To succeed they must have:
Offer a solution to
a problem and improve
an activity’s efficiency
A purpose for
Above all, its existence
it must be beyond financial
speculation A sufficient
better critical
than what mass
already
exists

Bitcoin and its derivatives meet
many of these features:
They are better in

the sense that they are
able to reduce costs
They have elite users

within the technology
developer community itself
They solve problems such

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

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 doesn’t
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 today’s 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 don’t 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 Hollywood’s historical capacity to predict

the widespread use of a device or technology service (Startrek’s 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. Isn’t this the most valuable as-
set and the real engine that moves business transactions or relationships?
Will we see time virtual currencies?

VIRTUAL CURRENCIES
The entry
of banks in
the sector
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.

Blockchain technology represents a new source deposits (passive or money). The same goes
of business for banks, as the transformation for service fees such as account maintenance,
of the value chain opens up a new revenue credit or debit cards, etc.
stream. It will affect all those services involved
in the exchange of assets. However, the con-
cept of bitcoin doesn’t allow just that, but also WHAT IF THE BANK AS WE KNOW
a new way of understanding finance through IT IS NO LONGER NECESSARY?
an economy that is collaborative, participatory That is the approach of the bitcoin technology,
and between individuals. and that’s why some entities are stepping up
to address this disconcerting future.
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

It has sponsored the development of Coinffein, a Spanish
startup leaded by Alberto Gómez and Sebastián 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 group’s approach to the bitcoin world has are many through the specialized fund Ribbit
gone hand in hand with its investment in start- Capital, also participated by the bank. Sumup,
ups through BBVA Ventures. Its investment in a startup that develops points of sale (PoS) for
the incubator 500startups, with hundreds of retail, is another of its noteworthy investments.
startups of all kinds passing through its hub,
has allowed BBVA to follow closely some of BBVA sustains that the bank of the future will
the most innovative projects in the sector. be, rather than a guardian of data, a financial
services intermediary. Francisco González,
This Silicon Valley accelerator has supported President and CEO of BBVA, visualizes the
Traity, for example, a company that claims to bank of the future as a driver of technology
be the reputational ID in Internet and allows to development to simplify the user experience.
apply techniques of social intelligence (based
on social networks) for scoring related to finan- The acquisitions of Madiva (real estate big
cial products such as credits, among others. data) or Simple (mobile and personal finance)
expand their possibilities for providing tech-
Coinbase is the icing on its portfolio of invest- nological services and keeping engaged with
ments, although its links with financial startups the evolution of the financial ecosystem.

It has opted for an alliance with Telefónica 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 what’s 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- ies in the short term of the bitcoin technology:
vesting ‘in house’, in internal projects led by its they are the ones who charge commissions
own employees instead of outsourcing fintech for every transaction that takes place on ei-
innovation to startups. Thus, UBS has created ther side of the Bitcoin, changing it to euros,
a laboratory to investigate the potential of the to yen or dollars.
underlying technology in Bitcoin, just as BNY
Mellon and other banks have done. Although the US banking industry’s involve-
ment in fintech projects through investments
In early 2015, UBS announced its intention in startups is less visible, it is in fact quite no-
to explore how blockchain technology can ticeable through numerous specialized funds.
streamline transactions. It has run some tests There are two examples that clarify the rela-
with smart-bond, a tool that uses this techno tionship of large US banks with financial inno-
logy to do cryptographically what normally vation products such as bitcoins and others:
would be done by the intermediary. they are, for example, the main funders (pro-
viding capital and credit) of the largest credit
There are many more examples of how the platforms between individuals and companies
banking industry is trying to catch up with the (P2P) in the country, Lending Club and On-
upcoming technological revolution, but initia- Deck. US banks already work and have been
tives are scattered. reaching agreements for years with financial
startups to develop the technological side of
So far, startups that have created online for- their business.
eign exchange services are the big beneficiar-

The competition
of the market makers
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?

GLOBAL SNAPSHOTS
(Potential)
bitcoin-based
success stories
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.

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 aren’t relevant from a global
perspective and don’t have influence beyond certain territories. But with the
Internet this approach changes, as the ‘territory’ itself is global.

CURRENCIES l OTHER USES
BITCOINS
It 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

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NAMECOIN
Of 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, LITECOIN
There 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.

RIPPLE
If 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.

ETHEREUM
It 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.

COINBASE
A platform of reference for the exchange of virtual currency
“A currency that doesn’t depend on any country... you can be your own
bank and make transactions worldwide very easily and quickly. Or what’s
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-

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 London’s 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
Invest
Pay Friends
Convert USD to Bitcoin
and back through
your bank account Coinbase keeps your
bitcoin secure
Shop Online

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 world’s 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 I’m crazy, but I believe bitcoin will surpass the dollar as
currency in the next 10, 15 years,” bets Armstrong.

GEMINI
Two 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 Botín, José María Amusátegui and Angel Corcóstegui. The
project was ahead of its time, but nevertheless it ended up being the base
of Santander’s 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.

COINFFEINE
It is a Spanish startup owned by Bankinter and other seed venture capital
funds. It’s 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 COIN
The 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. Don’t 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 COIN

This 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.

DROPCOIN
Another 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 loquial terms, it turns out to be something like:
pointing out the greatest cybersecurity threat “You can put a thousand firewalls and the best
to a system: it’s you! Yes, it is the user who, at protection, but there will always be a user on
some point, will expose the vulnerabilities of a your network that compromises the system
system, whether it is an employee, a customer, accessing it from the wrong place or clicking
a supplier, or a manager of a small or big com- on the wrong link”. Malware, apps, websites...
pany, a bank or a high level institution. In col- they are all potential threats.
P2P, strength
and weakness
Given this starting point, Bitcoin and other
virtual currencies would be far from being
immune and infallible.

THERE IS NO CENTRAL
TRANSMISSION:
AUTHORITY:
There is no authority guaranteeing The transmission of these curren-

issuance, payments, the value of the cies between users is not encryp-
currency or its property; it is the sys- ted and can be tracked by others. It
tem formed by the community or is a ‘clear’ communication, without
network of users who guarantees encryption. This means that anony
who owns what in real time. mity is only limited to the user’s
identity and the transactions traffic
(incoming and outgoing) can be
monitored and spied.
COMPUTER CODE:
The most famous cryptocurrency VULNERABILITY:

is a computer code that can’t be
changed, or at least in theory it
seems impossible. This feature is the The transmission of information is
foundation of potential uses based public (though just for advanced
in bitcoin, such as the identification users), opening the door to vulne-
of digital property. rabilities that can only be solved by
specific tools, such as the digital wa-
llets.
IDENTIFICATION OF
THE DIGITAL PROPERTY:
THEY ARE P2P SYSTEMS:
It is unalterable and has a unique ID,
allowing to catalogue it also as a cu-
rrency, although it is not. Among pairs or individuals, so its
great strength is at the same time
its greatest weakness.

The myth of anonymity
Bitcoin as such is anonymous, because it Even today the real origin of Bitcoin remains
doesn’t require identification to be used. But unknown. The real identity of its creators and
this myth falls down at the drop of a hat with pioneers is masked behind the pseudonym
the above mentioned possibility of building Satoshi Nakamoto. This can mean a weak-
tracking tools. “Since the amount of bitcoins ness for the system in the future, since it may
kept in any location is public information, the have encouraged the creation of some back
money owned by a specific person whose doors in order to create vulnerabilities, al-
identity has been compromised can be de- though this seems unlikely as it is open source
ducted, and also where the money came from technology. However, this anonymity can also
and which was its destination. Undoubtedly, be its strength, as it has allowed to focus the
this would be a serious danger to the privacy debate on the development and opportunities
(and even the integrity) of people if Bitcoin is of the currency, regardless of who created it
adopted en masse,” warns the security agency and why.
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.

Daily volume
of activity
Fraud 1 millon
rate of 0,3% bitcoins were
$ 54 million (the credit card fraud rate is 0,09%) stolen in 2014
Theft rate, is the myth

of a super-currency crumbling down?
Therefore, the degree of vulnerability or secu- Until 2014 it is estimated that around 1 mil-
rity is linked to the complementary actions lion bitcoins have been stolen, with an added
adopted by the user, such as the digital wal- value of about 800 million dollars (based on
let used for bitcoin transactions like transfers, its exchange rate a given time), according to
payments or simple storage. In turn, these information published in forums like Bitcoin-
additional measures (wallets, platforms...) open talks. This figure would represent a fraud rate
new paths tor vulnerability. of only 0.3% compared to the volume of ac-
tivity of bitcoin (over 54 million dollars a day).
90% of the thefts of bitcoins since 2009 took However, this ratio would be four times the
place in Mt.Gox, which was the largest ex- credit card fraud rate (0.09%), a sector which
change for trading these cryptocurrencies. It moves more than $ 15 trillion in transactions
went bankrupt in 2013, after a hacker attack and records $ 13 billion in thefts, according to
and unable to meet the reimbursements of estimates of the banking sector.
its clients. That insecurity, inherent to any plat-
form, reveals that virtual currencies are not
safer than current banknotes.

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

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…

The bitcoin chronology
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.
Sources:
Bitcoin milestones
Bitcoin historical quotations: profits from mining

January
The first version of Bitcoin sees
the light. Mining starts and a few
days later the first transfer of
bitcoins is done.
2009
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.
September
The domain Bitcoin.org
is registered.
October
The first currency
exchange rate is set:
1 dollar equals 1.3
bitcoins.

February
Mt. 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.
2010
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.

February
Launch of Silkroad, an
online market of illegal
products which are
traded in bitcoins.
2011
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.

February
Tradehill, the first major bitcoin
exchange platform, closes due
to regulatory problems and a
dispute among its users.
2012
March
The web hosting
platform Linode is
Summer hacked, suffering the
Coinbase, Peercoin and Ripple, three greatest theft so far
of the most important startups of of bitcoins to a group
the virtual currency ecosystem are of users (at that time
founded. In this fruitful summer, valued in more than
Bitinstant suggests creating bitcoin $ 200,000).
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.

February
The price of bitcoins begins to heat
up: $ 31 per unit are paid in Mt. Gox.
2013
April
The bubble starts to grow. For
the first time, Bitcoin goes over
$ 100, and in a matter of days
October it exceeds $ 250. The financial
Silkroad closes after an industry, starting with its most
FBI operation related to aggressive investors, sets its
drug dealing and money eyes on Bitcoin as its value
laundering. It is the first starts to surge.
seizure of bitcoins by
authorities, and therefore
there is a transfer of bitcoins
to a government account.
End of 2013
The Central Bank of China
prohibits the use of bitcoin
in its financial system. Other
countries such as Thailand
joined the ban, while other
December governments (Canada, Australia,
More than 5 million dollars in Japan...) opt for pragmatism:
revenue are registered through they allow their activity and
bitcoin mining in a single day. This tax the bitcoin like any other
record triggers the participation in financial asset. International
the ecosystem and attracts new agencies specialized in money
users. That same day, bitcoin marks laundering put the focus on the
a record of $ 1,151 per unit. bitcoin system.

January
The founder of Bitinstant
and president of the Bitcoin
Foundation, Charlie Shrem, is
accused of money laundering in
the US.
2014
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.
Summer
Some of the most important
startups in the bitcoin
ecosystem raise important
rounds of financing for
their development. The
ecosystem starts to become
professionalized.

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.
2015
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.

VIDEOGRAPHIC
How to use digital

currencies?
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. Don’t miss this tutorial
and learn the simple, fun way how
to keep up with cryptocurrencies.

On the
web
In depth
A 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.

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 minería.
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
also
Summaries of the most relevant news
of selected topics that have been
in this
published over the course of the period
based on its relevance to the Banking
issue
industry. The summaries were prepared
by the editorial board. Further
information is made available for
each given topic.
2 Technology trends
In 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 Innovación
Highlighted 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.

Trending issues
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.
Core Banking
Platform 80% of banks will replace
their core systems
New Formats
within five years
Mobile Banking According to the Invigorating Banking report,
sponsored by Five Degrees and done by Finextra
Research, there is strong support for core system
Social Business replacement and renovation. 83% of respondents
believe that their bank’s technology can no longer
Mobile Payments support their needs, and another 89% think it is
inevitable that banks quickly modernize technological
processes to avoid losing market share.
Customer-
Thus, four out of five banks believe they will have to
Centricity replace their core banking system within the next three to
five years. In addition, nearly 90% are in favor of including
Brands & SaaS or cloud-based services as part of the infrastructure,
Branding according to this survey among bank executives.
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform New challenges and
opportunities for banks
New Formats
New technologies have already been the engine
of transformation of business models in different
Mobile Banking industries, and therefore the vast majority of banks
are trying to deal with “the inexorable trend towards
Social Business the digital market, which is changing the behavior
of users and leading to the emergence of new
disruptive competitors and new business models.”
Mobile Payments
According to a publication of the Unacc, this
new group of companies is challenging the
Customer- established system reinventing different parts of
Centricity the ecosystem of financial services: from Square,
as a disruptive payments services company for
Brands & points of sale, to ZestFinance, which uses Big Data
technology for credit rating operations, or Simple,
Branding rethinking the user experience in retail banking.
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY innovation edge | Crypto-currencies

Trending issues
given topic.
Core Banking
Platform Millennials prefer
mobile banking
New Formats
According to research conducted by Gemalto, 92% of the
young millennials have a mobile phone, 42% have a tablet
Mobile Banking and 38% have both devices. In addition, seven out of 10
connect to the Internet more than two hours a day, and almost
Social Business four of every 10 millennials spend more than five hours.
Beyond these data about daily habits, the study analyzes

Mobile Payments 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
Customer- generation is characterized by opting for online services: 62%
Centricity of them say they use mobile banking at least once a month,
accessing bank services through a smartphone or tablet.
Brands &
Branding
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform Social business… a
profitable enterprise
New Formats
The concept of ‘social business’ developed by
Professor Muhammad Yunus, founder of Grameen
Mobile Banking Bank and Nobel Peace Prize, refers to a self-sufficient
company in financial terms, which aims to achieve a
Social Business social objective, whether related to the protection of
environment, the promotion of science or arts, etc.
Mobile Payments 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
Customer- earnings do not increase, but they don’t register
Centricity losses either. Currently, these companies are
enjoying a “very favorable” economic, social and
Brands & political context, because the crisis has increased
the need to fight against exclusion and poverty.
Branding
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform Barack Obama orders
the use of Chip&Pin
New Formats
cards
Mobile Banking This measure recently approved in the US will
favor the mobile payment sector and European
providers. It should be noted that in the United
Social Business States the majority of cards still use magnetic
strips, a format much less secure than the
Mobile Payments Chip&Pin, widely established in Europe.
The executive order signed by the US

Customer- president forces the federal government
Centricity to issue EMV debit and credit cards with
chip. EMV (Europay, MasterCard and Visa)
is a global security standard that uses a
Brands & computer chip to authenticate transactions.
Branding
This is a great opportunity for companies
(and particularly SMEs) developing EMV-
Crowd Finance compatible mobile payment systems.
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform The Iceberg Theory applied
New Formats
to customer experience
The Iceberg Theory, based on the minimalist
writing style of Ernest Hemingway, sustains
Mobile Banking that the heart of a story has to lie below the
surface, and shine through. This theory is behind
Social Business the premise that a good customer experience
requires a lot of work: if the strategy is really well
designed, the client won’t see all the effort.
Mobile Payments That is: you have to address all the problems and
find solutions before the user detects them, or
Customer- at least before he perceives there is something
Centricity wrong. The challenge is to make invisible all
your work in order to truly put the customer
at the center of the corporate strategy.
Brands &
Branding
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking Loyalty to a brand

Platform in Twitter
New Formats 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
Mobile Banking number of followers. SimplyMeasured analyzed
the followers of the 10 most popular brands on
Social Business Twitter to investigate what they have in common
and try to understand the behavior of consumers
when they click on ‘More’. The results show
Mobile Payments that Internet users follow more than one brand,
and in many cases several brands of the same
Customer- market niche (i.e. competitors) at the same time.
Centricity
Brands &
Branding
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform Discover the
crowdfunding
New Formats
ecosystem
Mobile Banking Entrepreneurs are one of the big beneficiaries
of the rise of the P2P financial ecosystem,
as it responds to their needs and demand
Social Business for project funding in the initial stages. It
is at this point when investors come into
Mobile Payments scene, becoming a peer-to-peer alternative
to the traditional financial market. In fact,
in these early stages of funding these
Customer- investors are often called Friends & Family,
Centricity as they are part of the core group who
believes in the entrepreneurial project.
Brands & But beyond these figures we find
Branding professional investors: business angels,
crowdlending platforms and even donors
Crowd Finance or prospective clients who buy in advance
the product or service. Hence, to give
coherence to this new model are emerging
App Ecosystem P2P technology platforms in different
versions: crowdfunding, crowdlending,
equity crowdfunding, donations
Gadgetology or rewards, etc.
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform Fansino, the winning
app of the Mobile
New Formats
Premier Awards
Mobile Banking Despite being in its beta phase, Fansino has
been the winning application at this year’s
Mobile World Congress. It is a music-related
Social Business app that helps connect artists with their fans.
Artists can tell when a fan is listening to their

Mobile Payments music and therefore assess the impact of
their songs, while fans can chat with them.
Customer- This app connects to Facebook and checks
Centricity the artists’ social networks, so users can see
the latest news published by music stars.
Brands & The apps GPSGAY and SATS Mobile Triage

Branding were the other nominees for these awards.
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform Apple Watch is in stores
Australia, Canada, China, Spain, France, Germany,
New Formats Hong Kong, Japan, United Kingdom and United
States are among the first countries to sell Apple’s
Mobile Banking new device, its smartwatch, a high precision
gadget offering ‘groundbreaking’ features for
health and sports. The Watch is available online
Social Business or by reservation at Apple Stores and Apple
Authorized Resellers in China and Japan.
Mobile Payments
“Apple Watch begins a new chapter in the way we
relate to technology and we think our customers
Customer- are going to love it,” said Tim Cook, Apple’s CEO,
Centricity when presenting the device. It allows users to
send messages, read emails and answer incoming
calls on their iPhone directly from the wrist. It
Brands & offers up to 18 hours of autonomy and comes
Branding with a unique charging solution that combines
Apple’s MagSafe technology with inductive
Crowd Finance charging to connect quickly and easily.
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY innovation edge | Crypto-currencies

Trending issues
given topic.
Core Banking
Platform
New Formats
Mobile Banking
Social Business
Mobile Payments
‘Social banking’, a new
Customer-
Centricity banking experience
Branches, online banking, mobile banking... these
Brands & are concepts that are more or less common
among bank customers. However, the so-called
Branding social banking is increasingly gaining strength
as a new experience in the interaction between
Crowd Finance customers and banks. If until now banks used
social networks to monitor and analyze the
behavior of their users, services, customer care
App Ecosystem and, above all, strategies of brand marketing,
now they are beginning to design and develop
Gadgetology financial services designed for social networks.
An example: the Indian bank Kotak Mahindra has
launched Jifi, a service which integrates social
New Banking networks to attract new users. It’s the fusion of
Concepts Twitter and Facebook with traditional banking.
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform The Data spring
Madrid was this spring the city of Big Data, bringing
New Formats together various organizations and initiatives: the Inno-
vaChallenge Data Week, the Big Bang Data exhibition
Mobile Banking 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-
Social Business tions and initiatives to explore and reflect on the crea-
tive, social and political practices that arise around this
Mobile Payments culture of data.
Exhibitions, lectures, workshops, debates, datathons

Customer- and guided tours contributed to explore subjects as
diverse as: techniques and methodologies related to
Centricity data visualization and data mining, data journalism,
collective cartography, crowdsourcing, access policies
Brands & and reuse of information (Open Data, Open Science),
Branding institutional and government transparency practices,
economy of data, and online safety and privacy.
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform Stress in the office can
cause panic attacks
New Formats
across the company
Mobile Banking As the world economy continues its
transformation, it is important to maintain a
level of balance within the workplace. The
Social Business challenge is to promote an environment
free of stress in the office in order to achieve
Mobile Payments balance, engagement and productivity.
According to various studies, 40% of US workers

Customer- have job stress and nearly a quarter say work is
Centricity the main source of anxiety in their daily lives.
Brands &
Branding
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
Trending issues
given topic.
Core Banking
Platform The TechShop movement:
how to learn electronics,
New Formats
welding or carpentry
Mobile Banking TechShop was founded in 2006 by Jim Newton
and Ridge McGhee, a professor of robotics and
a science adviser who were inspired by the
Social Business lack of access of their students to the tools and
equipment required for robotics. The challenge
Mobile Payments was to give people access to machinery and
technology normally only open to specialists.
Customer- Anyone can join this movement and have access to
Centricity multiple tools: computing machines, industrial sewing
machines, oscilloscopes, laser cutters, 3D printers and
all kinds of welding equipment, etc. These groups offer
Brands & training on the use of each tool, but the key of the
Branding learning process is that once you have mastered the
basics everything really depends on you: Do It Yourself.
Crowd Finance
App Ecosystem
Gadgetology
New Banking
Concepts
Big Data
Future of Work
DIY
EACH SECTION EXPLAINED
Core Banking Platforms App Ecosystem

Here you will find articles related to basic IT infrastructure There are 5 main components in the current Apps
which supports main banking processes, including Ecosystem: connectivity, devices, OS platforms, app
technologies such as SOA, WOA, digital platforms, etc. platforms, and apps; along with related products and
services providers (MEAPs, Mobility as a Service providers
New Formats etc.).
Based on design principles focused on customer insights,
New formats offers retail banking customers more channels Gadgetology
which are more granular and highly functional; a consistent, Gadgets are everywhere and it seems that there are more
simple, and collaborative universal user interface; real-time and more each passing day. We are moving towards a
intelligent processes; highly personalized solutions; and is contextual computing environment and, as a result, the
open to social networks and the web. Examples of these number and functions of gadgets are poised to grow
new formats are provided here. (thanks in part to the internet of things). In this section, we
share a word or two about gadgets.
Mobile Banking
Relevant news about mobile banking platforms (which New Banking Concepts
enable customers to access financial services, such as Banks around the world continuously explore new
transfers, bill payments, balance information and investment approaches to strengthen customer relationships, both
options) can be found here. in the virtual and the physical worlds; including Virtual
assistants, natural language search tools, new marketing
Social Business tools, different segmentation (children, gen Y,…) etc. This
Social Business is the integration and use of social section will cover news along these lines.
technologies by an organization, which includes social
media/work media, crowd listening, crowd intelligence, Big Data
crowd working, etc. Stay tuned to see how this space will It been said, “what gets measured, gets managed.” The Big
evolve. Data trend offers organizations an opportunity to manage
just about everything. Here we’ll share stories about Big
Mobile Payments Data capture, curation, storage, sharing, analysis, and
The process of using a hand-held device to pay for a visualization.
product or service, either remotely or at a point-of-sale. Up to
date information is provided. Future of Work
Work, increasingly, is not about where you do, but
Customer-Centricity what you do. The future of work is more flexible and
Customer-centricity is the organization’s understanding of collaborative; and values are going to play an important
customers at a granular level and the capability to create, role, especially corporate values. The way we work is
deliver, and capture different kinds of value propositions changing fast … stay tuned.
to different groups of customers, based on customer
understanding. DIY
Do It Yourself (DIY) refers to a trend of people doing
Brands & Branding “projects” to either be creative/recreational and/or cost-
Marketing in the modern world have many channels to saving activity. This trend becomes really interesting
reach consumers at their disposal: (smart)phones, tablets, as new technologies enable new functionalities such as
PCs and (smart)TVs and different ways to communicate 3D printing, health/wellness, etc, which help empowers
their brands, such as traditional ads, banner ads, SMS/MMS, individuals; this may even change the we think about
etc. businesses in the future.
Crowd Finance
A 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.

Technology trends
The following section outlines the upcoming technologies that will change
everything, with predictions on what may come of them in financial industry.
Smartwatches:
a new way to make apps
“For all of its technological marvel, the Apple Watch is still a
smartwatch, and it’s not clear that anyone’s 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. It’s hot, fashionable, everyone talks
about it, but we still don’t know exactly what do we need it for.
The Watch has just been launched with prices ranging from 350 to
15,000 dollars. It’s 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.
It’s 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.

In an article published in Medium , the creators of this app
explained how they conceived its smartwatch version: “We’ve
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 watches
Apple’s 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 smartphone’s 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 user’s 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 Piñera, Head of Mobile Development at future, watches will become independent de-
the Spanish company 8fit , is working on vices, other uses will appear and some of the
a version for Watch of his fitness application. differences may disappear,” he says. Rita Ma-
Piñera explains that the possibilities, for now, dariaga, lead of mobile development at Tec-
are quite limited. “With an iPhone you can grab nilógica, adds that “we are in the first versions
the tool palette and do whatever you want,” he of these devices and there is still plenty to ex-
says, “but with Watch there are elements you plore”. She also believes that these gadgets
can change very little. We feel very constrained, will unleash their full potential when they have
but we believe the result will be pretty good.” In more autonomy.
these early versions of the watch, Apple wants
to stay in control and leaves little room for ex- Pedro Piñera sees the watch “not as an appli-
perimentation. cation, but as a complement.” Hence, train-
ing sessions “are started with the mobile and
For Jorge Gutiérrez, CEO of the Spanish com- are controlled with the smartwatch.” 8fit will
pany Tecnilógica , the difference between use Apple Watch notifications to provide us-
developing for mobiles and developing for ers information about their diet, while the rest
smartwatches is as big as it was at the time of the app will focus on giving them informa-
between computers and smartphones. “If ges- tion about exercises without having to take
tural and voice interfaces improve in the near 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 phone
says Jorge Gutiérrez
“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 don’t consider it a
lack of attention if we are with another person”. Smartwatches, says Gutiér-
rez, could turn around this process and allow us to check all these notifica-
tions faster.

Piñera 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 doesn’t 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 can’t 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 don’t think there is room for many more,” he concludes.
Jorge Gutiérrez 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 don’t begin to incorporate this
type of control.”
So, will we all end up wearing technology? Pedro Piñera says “it’s 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 Gutiérrez believes they will become “usual” devices, but he doesn’t
think they will be “as ubiquitous” as smartphones. “In their current form they
are going to be targeting high income customers, and won’t 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. View all data
in this
infographic
USA UK 48
166 Spain 143
Mexico 47
Colombia 57

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,
BBVA’s 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 industry’s 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. Each winner will receive 30,000 euros to
develop a project in collaboration with BBVA.
The final events, in which the 60 finalists will In total, more than 180,000 euros will be dis-
have to compete before the jury and in public tributed among the six winners.
to become one of the six winners, will be held
in September. After these, two champions will We don’t just want a photo or a teambuilding
arise from each of the three regions: Europe, trip with you. We want to give you more. We
Latin America and USA & Rest of the world. want you to give us more. That’s why we are
preparing an immersion and interaction pro-
gram that will be implemented over two non-
consecutive weeks.

In these two weeks, you’ll meet people from
some of the best companies in the finance
and technology industry and have the oppor-
tunity to use BBVA’s contacts to the benefit of
your business. Through this project, we’ll 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 Masía, 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
InnovaQuotes,
an app to inspire you
Discover #InnovaQuotes, your personalized quotes
generator. It’s an app from BBVA Innovation Center’s
Facebook page that has been awarded on this year’s
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.
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?

INNOVAQUOTES
And so InnovaQuotes was born, a simple web and Facebook-integrated

application that delivers -to any user that might need it- a personalized
quote after answering only five short questions.
A responsive app accessible either from the BBVA Innovation Center

site or from the BBVA Innovation Center Facebook page .
On June 24th this app was awarded the Best Campaign on the So-
cial Networks award on the 2015 edition of the Digital Awards. These
awards, organized by OMExpo and eCOMExpo, recognize the best digi-
tal marketing and e-commerce solutions of the year.
WEB

Download
Mobile banking
The transformation towards digital banking generates
new business models. It is the era of mobile banking.
Innovation startups innovadoras as Simple, Moven,
GoBank, Fidor Bank are leading the way to mobile
banking, financial institutions without branches that are
causing a digital transformation in banking.

Download
Cloud services
Many business services are already cloud-
based, but do you know how to make the
most out of them? The average citizen
is not much aware of the existence of
cloud-based services, but businesses
are increasingly choosing them over
the traditional ones. Cloud computing
is progressing at increasing speed. It
seems unstoppable, and its influence will
be perceivable on every aspect of our
everyday lives.

Download
Virtual Reality
Total immersion in a world increasingly within your
reach. Virtual reality has outgrown its sci-fi dream status
to become an innovative trend on which companies are
increasingly betting on. “It helps the decision-making
process in a world that doesn’t exist yet.” This is one
of the core values of virtual reality, the trend that has
seen many companies accross different sectors, from
architecture to communications, place a bet on it. It is
no longer a matter of videogames.

Millennials
The youth between 18 and 30 years old, the
so-called millennials, are under the spotlight
all around the world. They are every brand’s
desire and pretty much every market-
disruptive trend is targeted at them. They are
expected to account for 50% of the planet’s
consumerism by 2017.
Download

Open4U
You might The best alternatives to Arduino:

from the Do it Yourself to the Internet
also find this of Things

Smart textiles, drones, robots, computers,
interesting homemade wearables, the Internet of Things...

Since Chris Anderson coined the term Do
from BBVA It Yourself (DIY) in 2010 in his article ‘In the

next industrial revolution atoms are the new
Open4U bits’ , published in Wired magazine, many

projects have been launched by open hard-
ware, open source and crowdsourcing enthu-
siasts. Anderson described it then as the new
industrial revolution; now, almost four years
later, that definition doesn’t seem poetic mad-
ness.
Raspberry Pi, BeagleBone, Sharks Cove, Min-

nowboard MAX, Nanode, Waspmote or Little-
Bits are some of the most interesting alterna-
tives to Arduino, the open source hardware.
Read more

Open4U
Get the maximum benefit from data

with these four tutorials
Mapping data, visualizing them in geospa-
tial apps and applying automatic learning.
We put our knowledge into practice with the
help of these video tutorials:
A ranking of the best predictive

analytics solutions for companies
Predictive analytics is “a business
game changer”. That would be the
perfect summary of the latest Forrester
Research report with its annual classifi-
cation of the best predictive analytics
solutions for companies .
There are no more excuses. All the com-

panies in the world have such advanced
and easy to use data analytics solutions
available that not knowing what will hap-
pen within six months is a mortal sin.
Read more Read more

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Three internationally renowned

experts give us the key aspects

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

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Over the past half-century, these entries have

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Anyone can create a virtual currency, but not

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They are better in

They have elite users

They solve problems such

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However, and taking into account Hollywood’s historical capacity to predict

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Regulatory pressure over

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One of its major business areas is precisely its exchange

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WhatsApp, owned by Facebook, is already revolution-

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

For now, both will use the infrastructure of traditional

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To avoid letting a language die,

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Headquartered in San Francisco, Armstrong (a former programmer at

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

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

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Earlier this year, BBVA invested in the world’s largest cryptocurrencies

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THE SOCIAL COIN

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One of the main arguments raised by the creators

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There is no authority guaranteeing The transmission of these curren-

The most famous cryptocurrency VULNERABILITY:

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That anonymity was in question after the ac-