Blockchain landscape 2017
Corporations and their venture arms, especially those in financial services , have entered the fray in large numbers, looking to blockchain and distributed ledger solutions to address pain points that include data reconciliation, clearance, and settlement, among other issues.
Major global banks and financial intermediaries are working closely with blockchain companies using the new technology to revamp legacy systems and infrastructure. Our market map includes both bitcoin and blockchain startups. Bitcoin companies offer products or services related to the trading, storing, or usage of bitcoin, while blockchain-based companies develop solutions that apply blockchain technology across sectors and verticals. Please note companies often straddle multiple categories.
We categorize each company based on its primary use case or most apparent line of business. Bitcoin and blockchain consortia are not included on this market map.
Download this report for a full explainer. Pleas e click on the map to enlarge. The map is not meant to be exhaustive of companies in the space.
Money services companies primarily operate cryptocurrency remittance or money transfer platforms. Often, wallet companies double as money services companies by providing platforms for the purchasing, sending, and receiving of cryptocurrencies.
Exchanges and Cryptocurrency Trading refers to companies that build cryptocurrency exchanges or cryptocurrency trading platforms, where consumers, businesses, and professionals can exchange cryptocurrencies for traditional fiat currencies or other stores of value.
Of note, exchanges and cryptocurrency trading platforms differ in terms of their respective target audiences; exchanges generally target consumers, while trading platforms target professional investors and investment funds transacting in larger volume. P2P marketplaces primarily operate blockchain-based, peer-to-peer marketplace platforms, where users can exchange goods directly and without the use of an intermediary. P2P lending refers to companies that develop blockchain-based, peer-to-peer lending platforms which allow users to engage in lending transactions with peers, as opposed to traditional financial institutions.
Merchant services refers to companies that primarily develop cryptocurrency and blockchain solutions for merchants and sellers. There are certainly many projects that fall into the gray area and could fit into multiple categories. For the most part, these projects were created with the intention of building a better currency for various use cases and represent either a store of value, medium of exchange, or a unit of account.
Projects within this category are primarily used by developers as the building blocks for decentralized applications. In order to allow users to directly interact with protocols through application interfaces for use cases other than financial ones , many of the current designs that lie here need to be proven out at scale. Protocol designs around scaling and interoperability are active areas of research that will be important parts of the Web3 development stack.
In my opinion, this is one of the more interesting categories at the moment from both an intellectual curiosity and an investment standpoint. For example, building a decentralized data marketplace could require a a number of Developer Tools subcategories such as Ethereum for smart contracts, Truebit for faster computation, NuCypher for proxy re-encryption, ZeppelinOS for security, and Mattereum for legal contract execution to ensure protection in the case of a dispute.
Because these are protocols and not centralized data silos, they can talk to one another, and this interoperability enables new use cases to emerge through the sharing of data and functionality from multiple protocols in a single application. Preethi Kasireddy does a great job of explaining this dynamic here. This category is fairly straightforward.
Many projects are already starting to integrate the 0x protocol and I anticipate this trend to continue in the near future. Both the Lending and Insurance subcategories benefit from economies of scale through risk aggregation. By opening up these markets and allowing people to now be priced in larger pools or on a differentiated, individual basis depending on their risk profile , costs can decrease and therefore consumers should in theory win.
As the team at Blockstack describes in their white paper: These centralized services are a prime target for hackers and frequently get hacked. Sovereignty is another area that I find most interesting at the moment. A key design of the Bitcoin protocol is the ability to have trust amongst several different parties, despite there being no relationship or trust between those parties outside of the blockchain. Transactions can be created and data shared by various parties in an immutable fashion.
Through blockchains and cryptoeconomics, the time and complexity of developing trust is abstracted away, which allows a large number people to collaborate and share in the profits of such collaboration without a hierarchical structure of a traditional firm.